9. CRM: Marketers and agencies working on their behalf spend large sums of money to create and maintain an accurate customer database that helps paint a picture of their customers’ behaviors, likes & dislikes, demographics etc. It’s not unusual for a marketer to spend millions each year just keeping their database up to date with basic information such as addresses. Meanwhile, Google’s customers do much of the maintenance work themselves as their cookies capture every web search, links you clicked on and when you did it. One area that Yahoo & MSN have a clear advantage over Google is a much larger database of demographic information via their email/IM users (certainly one of the drivers for Google launching Gmail to much fanfare). Combine the demographic information with the surfing and searching behavior, and there isn’t an agency in the world who wouldn’t die to get their hands on that rich picture of their clients’ customers.

Conclusion
Is Google explicitly out to get the agencies’ business? Unlikely. It just so happens that when you look at the natural progression of their activities, it ends up dramatically impacting the agency business. The ironic thing is that they are probably spending significant sales & marketing resources cultivating agency relationships with complete sincerity. Like many other successful businesses, over time they will have more and more channel conflict where parties who were previously 100% complementary start to step on each others’ toes. In the end, Google won’t look like an ad agency anymore than eBay or Craigslist look like a newspaper classifieds business, but they will capture money from the same customers as the business that they are pilfering. It’s the agency leaders that should ask themselves what facets of Google’s business do they need to develop or co-opt. Agency leaders would be wise to ensure they don’t have blinders on regarding their current business and their partners, or they are liable to be victims of an inevitable force.