Google vs. Apple: In the War for Advertising, Madison Avenue Loses Either Way

Last Updated Apr 12, 2010 6:03 PM EDT

In the debate over whether Google (GOOG) or Apple (AAPL) will win their war over control of digital advertising, there's been little talk about the potential losers. If Google is Godzilla and Apple is Ghidorah the Three-Headed Monster, then ad agencies and their media buying arms are Tokyo -- getting trampled underfoot.

The two companies have different strategies for attracting audiences and advertisers. Apple's "walled garden" of iPhone and iPad apps, and the iAd platform, promise a simple, fun, bug-free universe for users and advertisers. Google, by contrast, simply wants to serve ads wherever the user might be, regardless of the device they're using.

Both strategies put the squeeze on the incumbent media agencies, who for decades have controlled where ads appear and who gets paid for supplying ad space.

Consider: In Adweek's thoughtful coverage of where Google is at right now, one agency exec says this about Google's activity in the provision of online display ads:

"I'm shocked at how arrogant they've become," says an agency source. "I find it really scary. They have every intention of relegating agencies to just a strategy function."
That didn't sound too alarming -- agency types complain about everything! -- until I read this column on Business Insider, detailing one Google executive's critiques of the way Apple's iAd platform will be offered to advertisers:
Since this is a close[d] ad network run by Apple I guess you'll just have to trust them that they're giving you a media plan that meets your objectives. "I want to reach young men who are interested in sports" --> how does this get translated into a media plan? If Apple does all the work, then how does an agency add any value to the process?
Still to come, "addressable TV," a technology that would allow advertisers to target TV ads the way web advertisers target Internet users. Google has a nascent effort in that space. And surely the iPad is Steve Jobs' vision of where you'll be watching tomorrow?

Note that under both Google and Apple, the role of agencies as media buyers is diminished at best and non-existent at worst.

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Image from the movie Ghidorah the Three-Headed Monster, 1964.