There is no doubt about it—everyone was pleasantly surprised when Google Philippines was launched last month. Google’s official announcement that it will be deepening its presence in the country is definitely the biggest tech news to happen in the Philippines in recent memory.
The world’s search engine giant and one of the top technology companies in the world has set up an office in Makati, the country’s main business and financial district. What does it ultimately mean for the country and for the local digital industry?
According to Google Southeast Asia Managing Director Julian Persaud, “The Philippines is a key country in Southeast Asia in terms of its digital economy and techy-savvy population. This new office will allow Google to better engage with local users, partners and advertisers.”
Persaud has revealed that the company is going to engage in the development of more products and services that will exclusively cater to the unique demands and of the Philippine market. This could probably mean that a big chunk of international Google products – if not all of them – will get localizations and country specific versions that will target the Philippine market. Localization will be of particular importance to the millions of Filipinos users of different Google products. From Google Docs to Google Maps – localization will bring a completely new level of interactivity and familiarity to local users.
Increased presence in RP
Google is promising a lot of things with the announcement of its increased presence in the Philippines. But as we eagerly anticipate what the product of this engagement will be, there is a big question that looms over the local digital industry – what will this mean for the local tech sector? And will it be a good thing or bad thing?
The general consensus has been, as expected, very positive.
Ed Geronia, former editor-in-chief of T3 Magazine and current COO of digital startup Sari Solutions, thinks that Google’s increased presence in the Philippines is a clear sign that the country has significantly grown as a market for the company’s paid services. For example, Google offers corporate cloud services, a service that is gaining more and more fans in the corporate world because it can significantly increase productivity at a relatively small cost. Geronia also said that Google may have seen the sales of growth of consumer products, specifically apps, in the Google Play Store, which is again another encouraging development. He said that these are developments that mark the Philippine market’s maturity when it comes to digital services.
The numbers do support Geronia’s views of a robust local market. In 2008, a joint study by Yahoo! and Nielsen showed that online ad spending in the Southeast Asian region was posting consistent growth but the Philippines was seen as lagging behind other countries in terms of total online ad spend. But the study noted that even though display advertising occupies the bulk of online ad spending, the growth of search advertising has grown substantially. This trend may be one of the factors for Google to finally cast its eyes on the Philippines.
In a 2011 study conducted by Nielsen showed that total ad spending in the Philippines and across Asia has increased significantly. In fact, the Philippines has posted the second fastest expansion for ad budget in the region. Indonesia is at number one and Singapore trails the Philippines at third place. The increased budget allocation for advertising will inevitably affect the budget allocation for online advertising and this is one of the avenues where Google can potentially earn money.
David Drilon, managing director of diversified digital agency K2 Interactive (Asia), Inc., agrees with the general consensus that Google’s increased presence in the Philippines is a positive one. He said that Google is not going to threaten any of the local digital businesses.
“They [Google] don’t compete directly with digital agencies like ours as far as creative communications is concerned.”
However, Drilon said that what Google will likely compete with are the media agencies, especially when it comes to servicing certain market segments. “As far impressions are concerned, Google is an effective and budget-friendly alternative to tri-media.”
In a way, Google Philippines may likely hasten the rate at which corporations embrace digital marketing and lessen its focus on traditional forms of advertising. This is, of course, good news for the digital marketing agencies in the country that are still facing a challenge in terms of acceptance of their services in particular, and the concept of digital marketing, in general.
Google-spurred development
The entry of a high profile tech company like Google can also result in a catalytic effect in the development of various forms of technology in the country. For example, Google’s increased demand for better internet speeds and faster access to data could spur the local telecommunications industry to further improve its services. This is a scenario that is not far-fetched. This is actually happening now with the BPO industry, which is spurring the development and growth of businesses that are driven by the needs of the industry.
Faster access to information can further encourage the country’s level of connection to important content (like education) that will then benefit other Filipinos.
Of course, one of Google’s significant contributions will be on employment. Google Philippines is already looking for qualified people to fill up various key positions in the company. Interest in working for Google is quite high for a number of reasons. First, there is prestige in working for a company as globally popular as Google. Second, the Google corporate culture is one that has been envied by many people and is seen as an extremely ideal working environment.
Aside from generating employment, there is also going to be a knowledge transfer that will happen as these new personnel will be trained under Google’s exacting standards. This is invaluable knowledge that these personnel can bring with them when they leave Google and work for other companies or set up their own.
Employment opportunities are not limited to Google’s offices. As previously mentioned, Google’s needs will spur the creation of other business and employment opportunities. For example, app developers will very likely become more in demand in the near future as localized app development becomes more and more popular.
The presence of Google Philippines is very encouraging for the country because it is symbolic of the country’s remarkable growth over the last few years. Our economic future is so promising that a huge global brand as Google has set its eyes on our shores. More than any other effect on the economy, it’s the optimism about the country’s future that may be Google’s biggest contribution yet.
