Google's Tim Armstrong Cites the Wisdom of Crowds

It's another exciting day surrounded by more than 1100 of the world's travel business leaders. Tim Armstrong, Google's head of advertising joked that if something disastrous happened in this room, "it would take out 10 percent of the world's economy." It's true--I am gathered here with the leaders of the world's largest business, tourism, and as we listened to the head of advertising for the world's most successful company, it dawned on me that this is a stellar place to be.

Armstrong explained in his talk about how Google approaches their business looking at the wisdom of crowds. Their secret is letting individuals and the crowd shape their business. You're missing a major piece if you don't have this, he said. If you allow consumer preferences to dominate your decision making, you'll capture this wisdom of crowds, and ultimately this works the best. Instead of thinking about revenue, think about reaction, think about how it will affect people. This is forward thinking.

Armstong talked about how consumers get information....first the morning newspaper, then drive time radio, then they check on line weather, send text messages, look at photos, read destination reviews, watch prime time TV. You have got to be everywhere, he said.

In his personal household, people are on line for an hour before work. He thinks that drive time is going to change. Mobile devices are really important for travel. People will be migrating to mobile platforms more than just the computer. How do you connect to these consumers?

Good creative is half, connecting with consumers is the second part. He cited a huge Google success story: New Zealand tourism. They have done a good job using YouTube to get people to view videos and they have seen 40 million impressions and 600,000 people have visited their website. They have integrated their message throughout hundreds of websites and other media, and by offering the videos on YouTube have captured a huge piece of new tourism revenue.

Armstrong contrasted sight based vs instrument based navigation. Sometimes people navigate their advertising by what they can see. That's what you're comfortable with. But there are hundreds of other sites and mediums you can't see, and to be really successful you've gotta be there as wel as where just where you're comfortable and familiar.

Sometimes You Need a Geek, not a Deal Maker

Fred Vogelstein writes in the current issue of Wired about how Yahoo is losing (or lost) the war with Google over search advertising. It's brutal.

"When Terry Semel became co-CEO of Warner Bros. in the early 1980s, he was steeped in the marketing and distribution plumbing of Hollywood. So it's no surprise, in retrospect, that his legacy is as one of Hollywood's biggest innovators and risk takers. He grew Warner's revenue to nearly $11 billion when he left in 2001.

But now, despite Semel's achievements in Hollywood and early success at Yahoo, Silicon Valley is buzzing with a familiar refrain: Wouldn't an executive with a little more technology savvy be a better fit? Semel has been Yahoo's CEO for nearly six years, yet he has never acquired an intuitive sense of the company's plumbing.

He understands how to do deals and partnerships, he gets how to market Yahoo's brand, and he knows how to tap Yahoo's giant user base to sell brand advertising to corporations. But the challenges of integrating two giant computer systems or redesigning a database or redoing a user interface?

Many who have met with him at Yahoo say he still doesn't know the right questions to ask about technology. "Terry could never pound the table and say, 'This is where we need to go, guys,'" one former Yahoo executive says. "On those subjects, he always had to have someone next to him explaining why it was important."

One could have made a convincing argument two years ago that such deep technical knowledge didn't matter much. But now we have empirical evidence: At Yahoo, the marketers rule, and at Google the engineers rule. And for that, Yahoo is finally paying the price."