Google is scary.
I have a business strategy class right now, and one of the defining principles of remarkable companies is their laser-like focus on their primary business. For Google – it is advertising. We all know that.
99% of their revenue is derived from advertising combined with search. It doesn’t take a rocket scientist to figure that one out. But their new initiatives… Now those are impressive.
First of all, take a look at what Google has bought in the past few months. AdScape, the in-game advertising service. And YouTube – as well documented as that is. Now, there is talks of them being in bidding wars with Microsoft for Doubleclick, the popular image serving ad presence. This all combines into a very powerful advertising punch, which I believe solely targets small businesses (ie. freelancers, startups, mom and pop shops, web presences, etc.)
With current reports of Google partnering with EchoStar, the satellite TV network, and their push of Google Apps
through their referral programs, it seems as though they are aligning themselves brilliantly in their space. To the likes of, “The most superior advertising conglomerate ever created.”
Make no mistake, they know what the hell they are doing. Think of it this way – The Walmart of advertising.
Walmart is a phenomenon. I hate them for several reasons, all community related, but that is besides the point. At Walmart, you walk in and are confronted with about a million different advertising messages. All catered to the customer in such a way that you don’t have any reason to leave. There is a bank, a Subway, a photo center, an electronics department, a travel center (as in booking reservations) and the list goes on and on. What person in their right mind would shop anywhere else?
What we are witnessing from Google is the same phenomenon. Google is aligning their services in such a way that no one will want to shop for advertising anywhere else. Incorporate some form of metrics and demographics system into the whole package, and a advertiser is a fool to go anywhere else.
I see the next version of Adwords (if it isn’t renamed to AdNetwork or AdMart or even AdAnywhere) to be a place for an advertiser to sign in, pick their target audience, choose their medium and term (such as a newspaper and television spot for 30 days), upload their banner, and click send. It automatically gets deducted right out of their checking account.
Combine this technology with some sort of a matrix to see how effective the advertising (and maybe offer alternative placements, ie. intelligent agents or prediction systems) and you have the Walmart of Advertising.
People often say that Walmart is the greatest store of all time, but it is often coupled with a growing fear of monopoly. In truth, Walmart dominates every niche, and no niche at all. Where do you go to look them up in the phone book? The grocery section? Maybe the automotive department? Certainly they would be in the toy section? They have larger competitors in every niche, but each of those competitors specializes in one area. Walmart specializes in them all.
So where can we place Google in the future? In my opinion, sitting right next to Walmart at the top of the industry, dominating every large niche that matters.
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