Google puts $1B toward sprawling new NYC campus

Dive Brief:

Google announced in a blog post that it is investing $1 billion in a sprawling new New York City campus. Called Google Hudson Square, the space covers 1.7 million square-feet and is the result of lease agreements at 315 and 345 Hudson Street and a signed letter of intent at 550 Washington Street.
Google Hudson Square will serve as the central hub for Google's Global Business Organization, it sales team, in New York. The development builds on recent moves the Alphabet-owned entity has made in the city, including its purchase of Chelsea Market for $2.4 billion earlier this year and the leasing of more space at a Pier 57 location.
New York was the first city Google expanded to outside of its headquarters in California and now employs 7,000 staff across the company's search, advertising and YouTube divisions, among others. Google plans to move into the two Hudson square locations by 2020 and the Washington Street building by 2022, according to the blog post.

Dive Insight:

Google's Hudson Square campus will mark a significant expansion for the company on the East Coast and in the hub of the marketing, advertising and media businesses in the U.S. It also arrives at the same time that Amazon is plotting a massive new corporate foothold, commonly dubbed HQ2, in the Long Island City neighborhood of Queens starting next year.

While Amazon and Google have not historically been direct rivals, that's starting to change as the former looks to capitalize on the momentum of its advertising sales — currently part of the company's fastest-growing business category — and the latter continues to hone its online shopping offerings amid a potential slowdown in growth for search. Part of Google's pressures with search advertising can be attributed to newer competitors like Amazon, which appear to have snagged a greater share of the market. The shift is happening as advertisers in sectors like packaged goods look to link their ad placements closer to the point of sale on places like Amazon's e-commerce platform.

Marketers might welcome two advertising powerhouses vying more competitively for their dollars on the same turf. For Amazon and Google, they're just a short commute away from the center of U.S. operations for major companies like Unilever or Church & Dwight.

But the scale of Google and Amazon's expansions will also likely present obstacles for marketers when it comes to hiring around increasingly important fields like data analytics, as talent might find the younger tech giants more appealing to work for compared to old guard businesses. In the blog post, Google CFO Ruth Porat said that the new Hudson Square campus has the capacity to double the number of employees in New York over the next decade. Amazon for its part is looking to hire 25,000 staff to support its Long Island City operations.

For Madison Avenue agencies, the growing footprint of companies like Google and Amazon is a bit of a double-edged sword as well, in terms of hiring and elsewhere. Agencies have seen success developing specialized teams and solutions for sites like Amazon, as clients try to navigate what are often complex online ecosystems. At the same time, Amazon is more frequently working directly with brands, eschewing third-party agencies altogether.