Azog never appears in the Hobbit novel, but he is certainly a character that was created by Tolkien. In the original back-story for Thorin Oakenshield, it was his father who had fought with the Pale Orc and not himself, having decapitated Azog as revenge for the orc's prior murder of Thorin's grandfather. In Jackson's films, Azog wants revenge on Thorin for slicing off his arm in the War Of The Dwarves and Orcs that took place many years prior to the events of The Hobbit. It's one of the biggest changes Jackson made to the back-story for the Hobbit films, but it was one that was necessary. Azog being present creates an essential sense of urgency for Bilbo and the dwarves that would otherwise have been absent had he not been. Azog's son, Bolg (the relation isn't mentioned in the films), could arguably have filled the revenge role in the films, but that would have required completely re-writing Bolg's background entirely.