Google’s Gargantuan Footprint
by Gord Hotchkiss, Thursday, April 5, 2007

A RECENT blog post by Anil Batra, formerly from Revenue Science, speculates that Google will soon be getting into behavioral targeting. Another post by A-list blogger Robert Scoble indicates that Google may be dialing down the presentation of sponsored ads for certain queries. Combine this with a few conversations I’ve had recently with Googlers, and it seems the company is already setting its sights beyond the search results page when it comes to revenue generation. One starts to get a sense of the footprint that Google is planning to put down on the future online landscape.
Getting Personal, One User at a Time
To me, the glue that holds all this together is Google’s move towards personalization. If the company can get that piece of the puzzle right, everything else falls into place behind it. And personalization moves Google beyond search into a lot of other applicable areas: the Google homepage, G-mail, Google News, desktop gadgets, to name just a few.
One of the issues I have with Google’s move towards personalization is that it stops short of really providing additional value to the average user. If personalization works well, it significantly enhances our search experience by providing relevancy unique to us. The signals that Google is watching to power the personalization algorithm are very much the same ones it would need to watch to introduce behavioral targeting of advertising messages. It’s all about the sites that people visit, the search results that they click on and the path they take online. If Google can use all these signals to help enhance the search results, it’s not that big a leap to be able to target messaging through its AdSense network on the sites you visit.
Google Everywhere You Turn
The key to all this for Google is ubiquity online. It need to be everywhere and it’s rapidly approaching that goal. While the pick-up on things like Gmail may not have been the runaway success that everyone was expecting, Google is beginning to offer enough online touch points to provide continuous interaction opportunities for any given individual prospect. Consider the touch points Google already controls. First, three out of every five searches that are launched online, anywhere, happen on Google, according to Hitwise. That’s 60% of hundreds of millions of searches daily, and that alone gives Google a virtual vice grip on the traffic channels of the Internet.
Next is Google’s AdSense network. Although it has not publicly disclosed how many sites are in this network, it’s estimated to be in the hundreds of thousands.
And then there’s Google’s toolbar. In a recent survey we found that about 42% of the participants we interviewed had the Google toolbar installed. In its full implementation, it tracks every single site you visit and streams this information back to Google servers somewhere.
Add to this the various other Google properties and tools you may interact with. This could include Gmail or a Google personal homepage, Google gadgets installed on your desktop, Google Checkout, Google Blog Reader, to name just a few. And that list keeps growing.
Finally, there’s Google analytics. One of the smartest moves that Google has done is introduce Google Analytics as a backend tool, free to Webmasters. The question is, why would Google offer a fairly robust analytics package free? The answer is that it gives the company a tremendous amount of data on the backend to supplement what it’s already collecting on the front end through click stream tracking. This closes the loop, giving Google two views of a massive dataset and allowing extrapolation from those two views.
BT High on Advertisers’ Wish List
When you add all these touch points together, you have the capability of driving the largest consumer-centric behavioral network in existence. And there’s an appetite for this ability to pinpoint precisely. In the last SEMPO market survey, advertisers indicated that behavioral targeting was their preferred option, with 78% of them willing to pay a premium for it. If you could offer advertisers the ability to present progressive messaging, tied to consumers’ movement through the buying cycle, with the ability to intercept them not just at the search results page but at various information sites where they would be gathering more information, you would have an extremely effective net in which to capture prospects.
The challenge for Google is to present behaviorally targeted advertising in a way that doesn’t impact the user experience. And this is likely the only sticking point standing between the search engine and the more aggressive rollout of behavioral targeting for advertisers. My suspicion is that work is currently underway on the technologies that would allow Google to always present the right message at the right time to the right person. There is a distinct danger in trying to push that too soon. It’s one of those things you have to get at least 70% right out of the gate. But if Google can do this, it’s a distinct win both for advertisers and consumers. We don’t mind advertising when it’s relevant to our needs. We only hate the stuff that gets in our way and keeps us from doing what it is we want to do.
Why Google Can Afford to Dial Back Search Ads
And this brings us to why Google can afford to experiment with dialing back the presentation of sponsored ads on the search results page. A few conversations with different Googlers seem to indicate that its future focus is definitely on the advertising network, rather than the search results page. If it can get the right message/right place/right time/right person equation nailed down, it can monetize traffic much more efficiently and further improve the user experience.
The key for Google, at least on the search results page, is keeping that top-of-page real estate highly relevant. The fact is, over 50% of all the clicks on the page are going to happen on the first three or four listings, whether they’re sponsored or organic. Another fact is that we don’t mind a mix of highly relevant sponsored and organic links at the top of the page, but we do mind having nothing but sponsored ads in the top four Golden Triangle locations. Our tolerance for this advertising drops like a rock with the lessening of relevance in the ads presented. If personalization and behavioral targeting would allow Google to further tweak the relevance of these ads and get it right more often, the monetization naturally jumps dramatically.
In our last eye tracking study we found that Google was the most efficient at monetizing traffic to the search results page in the long term. Although Microsoft and Yahoo were more aggressive in presenting ads in the top real estate, Google managed to maintain its click-through rates on both first time and subsequent visits to the same page of results.
Given the possible paths that Google could pursue (and the huge revenue-producing opportunities that lie down those paths) perhaps its mission statement should change from organizing the world’s information to always presenting prospects with the right marketing message at the right time. This certainly aligns better with its recent moves into every marketing channel imaginable.