In recent months, Google's bid to measure media itself, and initiatives such as its partnership with Publicis Groupe to target digital opportunities, has sparked agency concern. Sir Martin Sorrell earlier this year famously labelled Google a "frenemy".
Speaking at an investment bank conference in the US, Armstrong, Google president, advertising and commerce, said "we have agencies who have been working with us for a long time, and those guys aren't calling us 'frenemies'."
He added that once Google solved its issues with agencies, "agencies will still have a lot to do. The people who make that [frenemy] complaint, are the people who came to the game late."
He added: "The amount of work that it takes to run campaigns today will probably only get greater. If we look into a crystal ball and ask will agencies get bigger or smaller, I believe they'll get bigger."
Armstrong also conceded that Google had not yet found the best way to generate ad revenues around YouTube. Asked whether Google has solved the problem of having ads effectively on YouTube in the right place, he said that "both social networking and YouTube have this problem with advertising. As an advertiser you want to be associated with the end consumer. As an advertiser, you want to make sure that you don't over-correct based on your previous 20 years' experience. The audience is tremendous, and as an advertiser, you need to approach these things with an open mind."
But, said Armstrong, "we're stronger" at selling ads on YouTube - "within five years, because of the work we've done over the last six months, we're in a position to scale that business."
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