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Google's Ads Boss: We Are Not a Retailer and Don't Intend to Be One

In an interview, Google's Sridhar Ramaswamy talks mobile, payments and the future of Google commerce.

Shutterstock / turtix

Google has a new catchphrase: “Micro-moments.” It’s the chosen term for the search results and ads that strike users when they’re pondering a purchase, and Google’s pitch to advertisers with money to spend on mobile.

Sridhar Ramaswamy, the executive who oversees Google’s gargantuan ads business and nascent commerce one, deployed the phrase frequently this morning during his keynote address at the ad:tech San Francisco conference. He was there to introduce Google’s latest ad product, shopping ads within YouTube.

But he also spent considerable time addressing mobile, beginning his talk with the recent news that mobile searches on Google now outpace desktop ones.

“The center of gravity is firmly shifting toward mobile,” he said onstage. Google is emphasizing the power of people’s intentions — basically, what consumers reveal when they type in the search bar. Ramaswamy took a silent swipe at Facebook to underscore the point. “It’s far more important for a brand to know this than my age or the fact that I went to Brown years ago,” he said.

After his talk, Re/code caught up with the executive and Google ad veteran, who shed a bit more light on his mobile strategy, the steady rollout of comparative services and the search giant’s future in commerce. He only teased Google’s next steps in payments. Next week, at its developers conference, Google will unveil the nuts and bolts of Android Pay, its new mobile payments backbone. Ramaswamy did, however, hint at the priority the Play store has in the company’s payments plan. And he defended Shopping Express, the same-day delivery service that recently lost its chief.

The interview has been edited for clarity and brevity.

Re/code: Your strategy on mobile — in search and ads — is starting to look very different from desktop. What’s your long-term game plan for mobile? And how does it differ from desktop?

Sridhar Ramaswamy: In my mind, what’s different about mobile, especially for a company like Google that has had desktop businesses, are the key differentiating factors — like local and how much video is being consumed. A lot of how we think about search advertisers, at a first level, is ‘How do we make sure that it works just as well for e-commerce.’ In my mind, that’s kind of table stakes. That kind of work involves helping our biggest advertisers develop great mobile sites, and playing to both the app and mobile Web ecosystems — treating them very equally.

Playing a much bigger role in app promotion. It’s something that we’ve not done as well, let’s face it. This is why the Play announcement is very important (Google began testing sponsored results in its app store in February). It brings the same kind of intent and utility that has driven search now onto Play. I actually think it will be great in democratizing things like app installs and app usage.

Onstage, you mentioned that a goal with search intent is delivering “just what a user wants.” Some companies that run comparison services, like Yelp, see this as unfairly venturing into their terrain. They are some of your more frequent advertisers. How do you balance the search products with these concerns?

We work very closely with our advertisers. We clearly see them as partners in this overall journey. When we made the shopping transition, over two years ago, we went to great lengths to talk to our partners.

Sridhar Ramaswamy, SVP Ads and Commerce, Google
Sridhar Ramaswamy, SVP Ads and Commerce, Google

Google’s not a retailer, and doesn’t want to be or pretend to be. But that doesn’t mean we keep the product stagnant. That doesn’t mean that the text ad format from 2003 is the end-all, be-all format for the next 20 years. I go and have this conversation for a lot of our biggest advertisers and tell them, “Yes, we are introducing change. And sometimes this change is surprising, because you have to go through a bunch of work to deal with the change. But really, what drives us is what our consumers want. And we will continue to be great partners to you.”

This conversation tends to go really well with our advertisers. I think of these changes being driven by much more of what users want — they want those results now — rather than being against something.

A couple years ago, you told my colleague that you don’t see Google as a marketplace either. Has that changed?

Yes, we’re not a marketplace. Those are much different models and they also come with a lot of emotional baggage right now. I think of our role as facilitating commerce. If that means bringing on a great set of consumers that are payment-enabled on the phone, so that establishing that relationship between that consumer and that merchant is easier, then absolutely. We think of ourselves as a connector at various levels.

Okay. In that same interview, you mentioned that a time “will come” when Google Wallet, your payment product, will aid the ads business. Has it?

It’s a work in progress.

Play certainly is seeing a tremendous amount of momentum that is naturally driving the number of customers that have payment credentials across the globe — not just in the U.S. Play is in dozens and dozens of countries and accepts dozens of other things. We’re doing other things, like making mobile commerce have a little less friction. We have a very nice product that we’ve announced called Chrome auto-fill that essentially takes your Google Wallet credentials and lets you do form-fill on your mobile phone. I don’t know if you’ve played with it, but it’s super cool.

Just Wallet users?

These are just with Google Wallet customers, but it works on any site. That is an example of the work that we are doing with Wallet that pays off for our users. And yes, better conversions on mobile.

Do you plan to bring that product beyond Wallet users?

This becomes a little bit of a definitional issue, in the sense that you could think of people with payment credentials as Wallet users, but really you should be thinking of them as Google users with payment credentials stored. Wallet is just a name.

So Wallet means two different things — we’re actually clarifying this next week. Wallet could mean your payment credentials with Google; Wallet could mean the app that is sitting on your phone. Those two are not the same.

This morning’s announcement was the first integration of shopping ads with YouTube. What does the future of shopping ads on video look like?

This really comes from our observation that people love consuming product content on YouTube. There are more than a million product channels. There’s a lot of that activity. It’s very much also a generational shift — there’s a set of people that will go there first to learn about a product. And really, the announcement today was about, “How do you bring shopping intent in a much more direct way into all this.”

The thing that’s been really, really cool about YouTube is that it’s a very democratic mechanism about people monetizing. The more product videos there are, the more down the road, we can do things like figure out what that product is about, and show those info cards. And still do revenue share. We think of this as another mechanism for facilitating.

The ad product was in the works a couple years ago. Why the delay?

It’s just timing. Shopping now, overall, has an amazing amount of momentum on Google.com. We also have a syndication product (AdSense for Shopping, a syndication of Google’s Product Listing Ads or PLAs). It has lots of consumers.

How many?

We have to see what we can share. PLAs are a very important part and have an important momentum. You can think of this as a natural extension of syndicating PLAs.

We have a new swipe UI. You see a strip of images for a product. You swipe them, it actually grows. The unit grows as you’re swiping it. Things like that are what we have to do on mobile, because it’s such a tightly constrained space. You’ll see things like that come to shopping, also. The best way to think about TrueView for Shopping is to think of it as shopping syndication, realizing the value of all the products that are there on YouTube.

What’s your strategy for Google Compare? Onstage, you mentioned the mortgage comparison product that’s coming soon.

We’re a facilitator there. We don’t provide insurance. We’re trying to make a streamlined UI to make it easier for people to compare. I think of this very much in the line of us as facilitator.

That service, too, was tried before — four years ago — and shuttered.

There have been a series of products in this space. In some cases, they work really well. In other cases, we have to iterate. We have to try a lot of different things. Some of them won’t work; we’ll go back and try other things.

Is that what’s happening with Shopping Express? What’s the status with that?

Shopping Express — we are committed to it. It’s one of the most loved products that we’ve ever done.

Loved by?

Loved by our consumers. The amount of adulation — there’s no other word for it — that we get from our consumers is just amazing. It’s a tough space, in terms of how much effort it takes to build a great product and have great economics. It has good momentum. But we also have to be — you know, I’m the same person who goes and talks to our big investors — so we have to be thoughtful about how we think of investments and how we expand.

We are committed to the product. We think it represents an important frontier in what shopping could be. But we have to be thoughtful of how we expand.

This article originally appeared on Recode.net.

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