Google takes steps towards a fully-subscribed search service, to the detriment of advertisers
Actions speak louder than words. At a time when “big data” analysis is driving intelligence into customer behaviour and beginning to underpin strategy marketers are clamouring to gain all the relevant insight they can get to stay ahead of the pack. Advertisers are required to sift and make sense of customer data coming in from dozens more channels than they ever were before. Social and mobile usage has quickly begun to play a huge role in changing advertisers’ landscape, and the marketer’s day job.
We know from working with global ecommerce advertisers that Google is the dominant analytics player. According to research carried out by Econsultancy in 2013, 90% of advertisers use Google Analytics (GA), with 86% using the service to analyse site traffic and conversion KPIs; and 75% relying on it to track online campaigns. Paid search is an important part of the equation for advertisers without doubt – with 61% percent reporting that they use GA for pay-per click optimisation, and here is where Google can capitalise profitably on the control they have over the analytics marketplace.
This month Google showed its hand by taking action that should have rung alarm bells loudly within the advertising community when it switched off sharing organic search keywords referral data. The very marketers who have worked their way out of the “blind SEO” optimisation days have now been sent right back to square one with the introduction of secure organic search. Allegedly done for privacy reasons, the move will conveniently render increased investment in paid search as the obvious next course of action (where the privacy reasons don’t apply).
In a similar move earlier this year Google stopped ‘device level’ keyword targeting, meaning that advertisers had to buy mobile search words if they wanted to buy desktop search. This means the advertiser has to invest more in search if they want to maintain their desktop search activity. In doing so Google has effectively handicapped marketers and will have pushed more brands towards a fully paid-up subscription model. This quarter, we saw Google’s revenue figures leap 12% on last year’s figures, with consolidated revenues for Q3 at $14.89 billion at the end of September.
Google is the only player in the digital space with the power to raise its revenues as rapidly as it has done in the past quarter. These strong arm tactics ensure that its stock soars; to a record high of nearly $1,000 per share. As other media owners such as the New York Times have struggled to keep ad revenues at a steady rate, the search giant has made it clear to all advertisers that it values paid search much more highly than organic search.
Looking from my vantage point of 16 years worth of digital media and technology experience, it’s clear to see that Google’s revenue is boosted by their global dominance in advertising analytics. For advertisers, the challenge will be to gain true, unbiased information about which channels work best to reach users online. Right now, I’m left still searching for an advertiser who saw a Google Analytics report extolling the virtues of Facebook ads and Yahoo! keywords.
Jon Baron is CEO of TagMan.