At 8 a.m. on a brisk Saturday morning in March, a surprise guest arrived at Walmart’s monthly corporate meeting at its Bentonville, Ark. headquarters: Google’s chief of business, Philipp Schindler.
For Walmart employees, seeing a Google executive grace the stage at its meeting would be like seeing Taylor Swift singing a duet at a Kanye West concert. Walmart and Google have had a contentious relationship since 2015 over data sharing. In order to show ads for searchers that would include inventory from local Walmart stores, the search giant had been asking for access to in-store inventory and pricing data, which Walmart didn’t want to share, and things had gotten heated.
But Schindler, who had become Google’s head of strategy, sales and operations in July 2015, was there to make peace. The day before the meeting, he visited a number of Walmart’s flagship stores and sat in on business meetings with CEO Doug McMillon. He listened to what was on Walmart executives’ minds. And on Saturday he was interviewed by McMillon in front of hundreds of staffers.
“Philipp has immersed himself in our business to understand how we work, our culture and our approach to serving our customers,” an admiring McMillon told Fortune. And Schindler’s reaction: “It was incredible. I even got to learn the Walmart cheer.” (Give me a W! Give me an A! Give me an L! Give me a Squiggly! and so forth.)
That Schindler even visited, and had made the initial outreach to Walmart, stands in stark contrast to some previous holders of his position–a sign that Google’s sometimes hard-charging sales team could be getting kinder and gentler. Schindler’s best-known predecessor, Nikesh Arora, was an aggressive dealmaker, who helped Google Europe grow to reap billions of dollars in advertising revenue before becoming chief business officer for the whole company. While Arora helped many brands move into the world of online advertising, he also made enemies–or at least “frenemies”– among advertising agencies. As Fortune has reported, Arora advocated ending Google’s practice of paying commissions to agencies that worked with some of the Fortune 100 brands that advertised on Google–creating tensions that led some agencies to question the value of working with the search giant, and left some advertisers feeling like Google was dictating terms to them.
That doesn’t appear to be Schindler’s style. Schindler became chief business officer in July 2015, and since then, colleagues and business partners have been describing him as “goofy,” “optimistic” and filled with “boyish wonder.” And he may soon be the (smiling) public face of some significant changes in Google’s advertising technology. According to sources familiar with the matter, Schindler and Google will soon debut a range of mobile advertising tools for agencies and brands that will improve measurement and impact of ads across different devices and platforms, including a new measurement tool for television advertising.
For Google, which is now a subsidiary of the new corporate umbrella Alphabet, Schindler’s softer and more friendly approach isn’t accidental. The company made 95% of its $75 billion in revenue in 2015 from online advertising. The biggest chunk of ad revenue still comes from search advertising, which presents ads, based on what consumers are searching for, that appear against trillions of yearly Google searches. Google also collects revenue from selling display advertising on non-Google websites. There’s also revenue coming from ads displayed in YouTube videos and within mobile apps.
It’s Schindler’s job to keep this revenue flowing, and find new ways to make money. But keeping the revenue growing won’t be easy. For example, with with its billion-plus users, social network Facebook is quickly gaining, especially on mobile and in video, where the social network is battling YouTube for views and advertiser spending.
“While the ad business is a great cash cow for Google, it is unstable,” explains Andrew Frank, analyst with market research group Gartner. “One of Google’s biggest threats for display advertising and YouTube ad dollars is the growth of Facebook.” (It’s worth noting that Facebook is under fire for overestimating video view times by between 60% and 80% to ad agencies, according to The Wall Street Journal. Facebook apologized for the miscalculation on Friday.) Kleiner Perkins partner and early Google investor John Doerr, who has worked with Schindler since 2013, highlighted Schindler’s challenge: “Google has extraordinary opportunity and vigorous competition in video and mobile markets,” Doerr said.
A Shift In Tone
The company’s shift in relationship with advertisers and agencies under Schindler hasn’t gone unnoticed. “I’ve known and worked with almost every person who has had Schindler’s role from [now AOL CEO] Tim Armstrong onwards. Philipp is by far the most engaged,” said Jonathan Nelson, CEO of advertising agency Omnicom Digital.
Schindler, who is now 45, grew up in Dusseldorf, Germany where he grew up being “obsessed with computers. His first computer was a Commodore 64. “I fell in love with it,” Schindler professed. By 15, he said he had written millions of lines of computer code and built software programs in his spare time. “It was all I could think of and do.”
But instead of becoming an engineer, Schindler was drawn to the business world after college. He began his career at online pioneers AOL and CompuServe, eventually rising to head marketing and sales for AOL Germany. In 2005, he was recruited by Google to serve as managing director for Google’s ad business in Germany, Switzerland, Austria and the Nordic countries, reporting to Arora. Schindler was named as president of all of European sales in 2009, and three years later was promoted to vice president of sales and business operations globally.
It was clear to many around him that Schindler was not your average sales guy. Alan Eustace, who was one of Google’s most senior engineers at the time, recalls Schindler’s “computer-like mind” and being surprised that he was a “numbers” person. Doerr says that compared to his predecessors, Schindler has “a 360-degree view of consumers, partners, clients and strategy” and “closely collaborates with the product and engineering teams. ” Nelson says he was also surprised that one of Google’s top sales guys also spoke like an engineer. “He’s not the guy writing code but you can tell right away that he knows and understands the technology behind these ad services at a deeper level,” said Nelson.
Within Google, Schindler works particularly closely with Google’s ad engineers, including its top ad engineering and product head, Sridhar Ramaswamy (who also accompanied Schindler to the Walmart meeting). Advertising partners compliment him for his affable personality and lack of pretentiousness. In meetings, Schindler ingratiates himself by sharing stories about his wife and three kids and his love for skiing. A favorite recent splurge that comes up a lot: the Airstream trailer he bought for weekend family camping trips.
A big role at Alphabet
When Google co-founder and CEO Larry Page, and fellow co-founder Sergey Brin announced the Alphabet restructuring last July, Schindler was promoted to chief business officer of Google. The role is different and bigger in some ways than it was under his predecessors. Schindler not only heads up the search-related advertising business, but is responsible for sales involving a range of other business units, including Alphabet’s mobile Android platform. Overall, he oversees sales and operations teams of 13,000 employees worldwide.
Schindler also has a role to play in turning Google’s “moonshots,” such as artificial intelligence or virtual reality, into businesses. That’s a bigger priority because Google is now in a new era of financial discipline, spearheaded by former Wall Street exec and current Alphabet and Google chief financial officer Ruth Porat (read more about her influence on the company here).
Prioritizing his time among all these businesses could be a challenge. But Schindler seems clear on where he should be focusing his efforts. “Ads is still the largest piece and there is a lot of growth there so I’m deeply involved in those areas,” he says. He adds that for some of the more nascent moonshots within Google, he believes that it may be too early to worry about monetization.
“When Google was small, ad growth wasn’t as a big of deal,” said Eustace,”Now that it’s in the billions, he’s been entrusted with something very successful.”
Google’s ad business is still growing. In the most recent quarter, Google posted $21.5 billion in revenue, up 25% from the year-earlier quarter. Advertisers continue to flock to the company’s consumer-facing services to place their ad spend because it’s where users are, says Collin Collburn, analyst with Forrester Research. Google Search, YouTube, Google Maps, Google’s mobile app store Play, and Google Android all each have at least 1 billion users, according to the company.
But there are some weaker areas and challenges to Google’s ad business. More consumers are searching Google on mobile phones instead of desktop computers. But mobile search is still not a great experience. Many mobile ads lead to landing pages that are not formatted for mobile phones; that, in turn lowers users’ clicks, so Google doesn’t make as much money on click-throughs. “It’s a huge problem,” says Collburn.
Schindler acknowledges that many mobile sites are “not good enough.” He has created a team of 40 employees whose specific goal is to ensure that website owners and advertisers create mobile-friendly sites. As for the competition from the likes of Facebook in the mobile ad world, Schindler said he is “deeply aware” of the competition but is focused right now on how to solve problems for advertising partners.
Nelson says that Schindler’s attention is actually encouraging Omnicom Digital to increase its spending. “Our spend with Google is going though the roof, and part of that is because of Philipp,” Nelson said. “He’s selling us on products that give us more data around ads, but he’s making them easier to understand.” While Nelson declined to specifically state how much Omnicom’s spend is with Google, he said “it starts with a ‘B’ and it’s plural.”
Schindler has been making an effort to connect personally with the company’s thousands of salespeople. Schindler uses an internal question and answer service called Dory where anyone can ask him a question, and he tries to respond to these questions weekly. Every Friday, Schindler and the heads of advertising product and engineering hold a three-hour session for engineers and sales leaders where they review all the weekly developments for ad services. Schindler started the meeting series when he headed global sales. “These meetings are where I get my energy,” he said. “I love my team.”
Schindler also tries to infuse these relationships with a dose of goofiness, warmth and compassion. As Lexi Reese, formerly the vice president of programmatic advertising at Google, remembers, Schindler approached her a few years ago about a promotion. He wanted her to take on a global role that would require travel. Reese was newly pregnant at the time, and told Schindler that she didn’t feel comfortable taking the role since she knew she would be taking a five-month maternity leave. Schindler responded first with a big bear hug and congratulations, and then said, that her leave and pregnancy had nothing to do with her ability to take on the senior role, and that he found many new parents to be some of the best leaders. “Let me know how I can help you,” Schindler told Reese at the time. “I was completely shocked at his reaction,” she said.
Schindler says work-life balance is one of the topics that employees most often question him about. He says that when he’s not traveling, he refuses to start any phone calls or meetings before 8:31 am Pacific Time, so he can drop off his three children at school. He loves his Airstream because camping trips with his kids often takes him to places where he doesn’t get an internet connection and thus his focus is completely on his family. Reese, who is now the chief operating officer of payroll startup Gusto, recalls a recent offsite trip where Schindler took his entire Mountain View-based team to a beach in Half Moon Bay, Calif. He spoke briefly about the ad business but had a large box next to him. The box was filled with kids beach toys. “We literally just rolled up our pants and ran around the beach playing for hours,” she said. “It was the best off site I’ve ever been to.”