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Case Study: Marketing Excellence Google

In 1998, two Stanford University PhD students, Larry Page and Sergey Brin, founded a

search engine company and named it Google. The name plays on the number googol

1 followed by 100 zeroesand refers to the massive quantity of data available online

that the company helps users find. Googles corporate mission is To organize the

worlds information and make it universally accessible and useful. From the beginning,

Google has strived to be one of the good guys in the corporate world, supporting a

touchy-feely work environment, strong ethics, and a famous founding credo: Dont be

evil.

The company has become the market leader for search engines through its business

focus and constant innovation. As Google grew into a primary destination for Web users

searching for information online, it attracted a host of online advertisers. These

advertisers drove Googles revenue by buying search ads, little text-based boxes

shown alongside search results that advertisers pay for only when users click on them.

Googles search ad program, called AdWords, sells space on its search pages to ads

linked with specific keywords. Google auctions off the keyword ads, with prime

keywords and page locations going to the highest bidder. Google recently added a

program called AdSense, which allows any Web site to display targeted Google ads

related to the content of its site. Web site publishers earn money every time visitors click

on these ads.

In addition to offering prime online real estate for advertisers, Google adds value by

providing tools to better target their ads and better understand the effectiveness of their

marketing. Google Analytics, free to Googles advertisers, provides a custom report, or

dashboard, detailing how Internet users found the site, what ads they saw and/or

clicked on, how they behaved while there, and how much traffic was generated. Google

client Discount Tire was able to identify where visitors encountered problems that led

them to abandon a purchase midstream. After modifying its site and updating its

keyword search campaign, Discount Tire measured a 14 percent increase in sales

within a week.

With its ability to deploy data that enable up-to-theminute improvements in a Web

marketing program, Google supports a style of marketing in which the advertising

resources and budget can be constantly monitored and optimized. Google calls this

approach marketing asset management, implying that advertising should be managed

like assets in a portfolio depending on the market conditions. Rather than following a

marketing plan developed months in advance, companies use the real-time data

collected on their campaigns to optimize the campaigns effectiveness and be more

responsive to the market.

Over the past decade, Google has expanded far beyond its search capabilities with

numerous other services, applications, and tools. It creates and distributes its products

for free, which in turn provide new opportunities for the firm to sell additional targeted

advertising space. Since 97percent of Googles revenues come from online advertising,

new advertising space is critical to the companys growth.

Googles wide range of products and services fall into five categories: desktop products,

mobile products, Web products, hardware products, and other products. Desktop

products include both stand-alone applications such as Google Earth (a virtual globe

that uses satellite imagery and aerial photography), Google Chrome (a Web browser),

and Google Video/YouTube (Google acquired the video hosting site YouTube in 2006

for $1.65 billion), or desktop extensions such as Google Toolbar (a browser toolbar).

Mobile products include all Google products available for mobile devices. Web products

are broken down into the following subsetsadvertising (e.g., AdWorks, DoubleClick,

Clickto-Call), communications and publishing (e.g., Google Docs, Google Calendar,

Google Gadgets, Wave), development (e.g., Android, Google Code), mapping (e.g.,

Google Sky, Google Maps), Search (e.g., Google Dictionary, Google Alerts, Google

Scholar), and statistics (e.g., Google Trends, Google Analytics).

Googles stage of development starts within Google Labs, which lists new products

available for testing. It next moves to beta status, where invited users test early

prototypes. Once the product is fully tested and ready to be released to the general

public, it moves into the gold stage as a core Google product. Google Voice, for

example, is in the beta stage. It provides consumers with one Google phone number,

which then connects to the users home, office, and cell numbers. The user decides

which phones ring, based on who calls. Due to Google Voices complexity and

popularity, users can sign up only by invitation.

Google has not spent a lot of money on traditional advertising. Recent efforts have

targeted Microsoft consumers with appeals to use Googles cloud computing

applications instead of Microsoft Office or Windows. By Going Google, a user can

access all of his or her documents and applications via a Web browser instead of

owning the physical infrastructure and software. In addition, in 2009 Google launched its

first-ever television commercial for Google Chrome, an alternative to Microsofts Internet

Explorer Web browser.

Google is also betting big in the mobile category. With its 2008 launch of Android, a

mobile operating system, Google went head-to-head with Apples iPhone. Although

many still prefer Apples platform, even critics have praised Androids benefits. Most

importantly, Android is free, open sourced, and backed by a multimillion-dollar

investment. That means

Google wants its partners to help build and design Android over the years. In addition,

the iPhone is available only through AT&T in the United States, while most of AT&Ts

competitors support Android phones. If Google influences millions of new consumers to

use smart phones, it could make billions in mobile advertising. One analyst stated that

Google is trying to get ahead of the curve with these initiatives so when [mobile

advertising] becomes mainstream, Google will be one of the major players, and display

is a key growth area for Google.

Googles goal is to reach as many people as possible on the Webwhether by PC or

by phone. The more users on the Web, the more advertising Google can sell. Googles

new products also accomplish this goal and make the Web a more personalized

experience. One program allows users to mark their current position on Google Maps,

click the local tab, and receive information about local restaurants, bars, and

entertainment venues.

Google has enjoyed great success as a company and a brand since its launch. When it

experienced an hour-long outage in 2009, worldwide Internet traffic decreased by

5percent. In 2009, Google held a 65 percent market share in search in the United

States, significantly greater than second place Yahoo!s 20 percent market share.

Globally, Google held a more dominant lead with 89 percent market share versus

Yahoo!s 5 percent and MSNs 3 percent. Googles revenues topped $21 billion in 2008,

and the company was ranked the most powerful brand in the world with a brand value of

$86 billion.

Questions

1. With a portfolio as diverse as Googles, what are the companys core brand values?

2. Whats next for Google? Is it doing the right thing taking on Microsoft