Google's Ad Man
Photograph by Visko Hatfield
(page 1 of 2)
As newlyweds, Tim and Nancy Armstrong lived in a cozy apartment on West 86th Street and Columbus Avenue in Manhattan. Tim had just signed on with an Internet start-up, and Nancy was working for a high-octane public relations firm.
The first-floor apartment was, at best, 900 square feet. Though technically a one-bedroom, the flat was really just a couple of small rooms. It had a fireplace, which was nice, but one could hardly enter the bedroom without banging the door against the bed.
In short, it was about what most young up-and-comers could expect to find in the city. “No dishwasher,” Tim Armstrong recalls, leaning back in a chair in his office, twenty-one stories above the hubbub of Broadway. “Sort of a mini sink. Cramped bathroom. It was the American Dream.”
He, of course, is being facetious. Yet in his kidding, Armstrong has bumped up against a certain verity. His Upper West Side apartment in itself may not have been nirvana. But it was a jumping-off point for one of the bigger American Dreams come true in recent memory. His abode, you see, doubled as the New York office of the then-fledgling Google, Inc.
At the time, five and a half years ago, the Mountain View, California–based company brought in Armstrong, who was already battle-tested in various Internet ventures, to help establish a solid source of revenue for its innovative new search engine. “Google hired me basically to turbocharge the ad effort,” says Armstrong, who with his wife and their three children has since found more spacious accommodations in Riverside. “They wanted to test if we could actually make a business out of advertising.”
Back then, Internet advertisements largely revolved around gimmicks like pop-ups, takeovers, flashing banners and animated frogs and monkeys with whom users were expected to interact in one way or another. Armstrong’s mission was to recruit the troops and lead a different kind of charge, selling subdued text advertisements to appear alongside related search results. And though search-based advertising had seen moderate success elsewhere, Google would take it to dizzying new heights.
“Google in seven short years has gone from an idea to a company today that is worth 120 billion dollars,” says David A. Vise, a Washington Post reporter and co-author of The Google Story. “That’s more than the combined value of Amazon, Disney, General Motors, the Washington Post Company, the New York Times Company and Dow Jones. Nobody in the history of American capitalism has ever created so much value so quickly.”
Welcome to the American Dream, size XXL. As you might expect, Armstrong’s employer has become a source of awe, envy and dread to its media counterparts. Google’s stock opened at $85 a share when it went public in August 2004 and closed out this past year at more than $400. As many traditional media properties — newspapers, magazines and television — struggle, Google rolls on. Last year the company was expected to reap more than $6 billion in advertising sales. That number could reach nearly $10 billion in 2006.
“The theory at Google has always been to collect all the world’s information and then present it in a useful way to users,” says Armstrong, who at age thirty-five is vice president, advertising sales, at the company. “Obviously, if you can be at the intersection of information technology and commerce, some kind of business will grow out of that. It happened to be that the advertising business so far has been Google’s main driver.”
The company has so many new advertising vehicles that have emerged or are in the offing that observers can hardly keep track. As much as half of Google’s profits come from ads the company sells on non–Google websites, including those of media outfits that stand to be victimized by the company’s success. And while Google continues to refine its search-related ads, the company is going beyond them into everything from e-mail to classifieds to buying ad space for its customers in magazines. Securing its place at the top of the heap, the company recently agreed to pay Time Warner $1 billion for a 5 percent stake in America Online, beating back an offensive by Bill Gates’s Microsoft and extending Google’s dominion.
These developments are having a big impact on the advertising industry, says Stuart Elliott, advertising columnist for the New York Times. “It’s absolutely clear that the advertisers, particularly major advertisers, are much more willing to spend money online now. And that’s having a profound effect on all the traditional media.
“They’re working very hard to either get their own online operations beefed up, or in certain cases they’re buying websites so that they can take part in this online advertising boom. It’s quite a bit different from the last dotcom boom, because at that time it was all basically smoke and mirrors. Now the major offline companies of the world — Procter & Gamble and General Motors and companies like that — are spending money online and are willing to work with companies like Google.
“Google has been very aggressive in courting Madison Avenue,” Elliott observes, “and obviously Tim is a big part of that.”
All this has kept Armstrong hopping, often from coast to coast, and invigorated. It was the entrepreneurial philosophy of founders Sergey Brin and Larry Page that won him over in the first place, despite job offers that would have paid better, not to mention given him an actual office to go to every day. “Larry and Sergey have built a culture that says it’s better to try things out than think about them,” says Armstrong, who now has an official, though humble, corporate office and as many as 500 employees under his command. “So there’s a lot of innovation that happens at Google. For me personally, it happened to be the perfect blend of entrepreneurship and structure.”
Tim Armstrong has a rangy build and an angularity to his features that would suit a toy action figure. Speak to him and he listens, confirming each point with a staccato “Right.” He himself is well spoken but, in his enthusiasm, tends to shift quickly from one thought to another, as if the search engine in his brain is still churning out results.
“The amazing thing about Google, and advertising in general, is that when done correctly it can be a driver of the whole economy and it can be a driver for companies,” he says. “And getting the right information to the right customers at the right time is potentially a powerful thing for our partners and our advertisers.”
Tim Armstrong grew up in Littleton, Massachusetts, west of Boston, the second of three sons. His father Donald, who served as a town selectman, was in product development for IBM and later got involved in some computer start-ups. Tim’s mother Patricia has worked to this day in human resources for a business-to-business publisher.
The Armstrongs took out loans and otherwise stretched their resources to send the boys up the road to Lawrence Academy in Groton, where they were day students.
Tim’s passions were sports and assorted moneymaking enterprises. His parents put a premium on work, and from the time Tim was twelve or thirteen he always had a job, be it construction work or something else. In middle school, he and a buddy sold hockey equipment out of his basement. In high school he obtained his real estate license. One venture involved taking over some property a bank was foreclosing on, cultivating strawberries on it and selling them.
At Connecticut College, Armstrong majored in economics and sociology. He also rowed crew and played defense for the lacrosse team, of which he was a captain. “The good thing about Tim was that he led by example,” says Fran Shields, his lacrosse coach and the school’s current athletic director. “When Tim said, ‘Hey guys, suck it up, come on, let’s go,’ it wasn’t coming from a whiner. It was coming from a guy who was out there doing it.”
After graduating in 1993, Armstrong moved to Boston, where he joined an investment firm. He came to hate the job, however, and quit after three months. He and Mike Dressler, a friend from high school, then started a career and lifestyle newspaper for twenty-somethings, financed with their savings and credit cards.