About three years ago I turned to my Uncle Patrick and said that Google is trying to get into the general advertising game. I didn’t think much of the claim until I started seeing countless articles and posts on Google Radio, Google Print, and Google TV, Google Gadgets, and Google Disply (or banner ads) over the last year or two (culminating a recent NY Times article). And then I kind of mentally slapped myself and realized, yeah, they’re trying to be an old school advertising firm (see Mad Men!) ; maybe minus the creative design part! But, why would Google want to get old school and move away from Paid Search or Search Engine Marketing? The answer is easy and it’s driven by two factors:
- $$$ (or money) and,
- Data (or what users do)
Google continues to get rich by playing in every media channel (not just paid search or keyword advertising) and provides value to advertisers by capturing user behavior data on their brand.
The Google business model is also traditional and has been followed by countless brands (think Mercedes-Benz going from S-Class expensive sedan to C-Class entry level sedan or Giorgio Armani going from exclusive clothing to Emporio Armani “every day” clothing line).
In other words, the first part of the Google business model centers on introducing a fabulous and exclusive consumer product (a luxurious sedan, an exquisite suit with fine material, and a super accurate search engine backed by targeted keywords on the results page). The secondary part of the model is to broaden the product lineup by introducing a spin off product (in most cases at a lower price point and of somewhat lower quality). Google moved into banner and radio advertising, for example, and the end product wasn’t as impactful as their traditional keyword offering (results are less measurable and don’t provide the advertiser with the same ROI).
So, what does the future have in store for Google? Well, predicting the future is tough stuff but I’ll bet on Google trying to deliver on the next killer app and at the same time supporting the business with targeted marketing program offerings. Now, is the model as lucrative as Microsoft or IBM’s business? No, in the humble opinion of this blogger, but there is valaue in innovation and hard work and Google is winning on that front.