Manage the Brand: Google!

The latest Economist has the headline “Who’s Afraid of Google?” In this first article, apparently everyone is afraid of Google and all its information it has on “us”. I thought this article was a little harsh ending by calling Google’s slogan, “Don’t be Evil”, “trite”.

But, actually it wasn’t the first article that I wanted to talk about it was the second article, “Inside the Googleplex” because it touches on the corner stone of Google’s power and dominance. Which, is (a) its ability to garner huge amounts of traffic, while (b) providing perceived relevance to both consumer (web user) and advertiser. “Linking” these two up is what Google does best!

First, Google’s share of web searches must remain stable. Thanks to its brand, this looks manageable. Google’s share has steadily increased over the years. It was about 64% in America in July, according to Hitwise. That is almost three times the volume of its nearest rival, Yahoo!. In parts of Europe, India and Latin America, Google’s share is even higher. Only in South Korea, Japan, China, Russia and the Czech Republic does it trail local incumbents.

Brand! Maintaining brand is the most important part – loss of perceived relevance of searches or any other level of trust would definitely have a negative impact on Google, both amongst consumers and advertisers. If Google misuses information that it gathers from search, email, document applications etc, it will hurt – and hurt bad! The depth of the pain will depend on what excatly happens, how it happens and when.

One could compare an information leak at Google to the theft of personal credit information. How many people experience credit card fraud each year? Or the theft of personal information from any number of sources? Yet, we continue to use credit cards on an increasing regularity. Yes, Google gets lots of “personal” information – like what we think, say and are interested in. But, never forget when you purchase something with your credit card there is a clear trail all the way back to you. And, well, we purchase lots of personal things.

In this way I think Google may be a permanent fixture like Visa and Mastercard!

The second part of Google’s power is its ability to “connect the dots” between consumer and advertiser.

Second, Google must maintain or improve the efficiency with which it puts ads next to searches. And here its dominance is most impressive. In a recent analysis by Alan Rimm-Kaufman, a marketing consultant, it took a whopping 73% of the budgets of companies that advertise on search engines (versus 21% and 6%, respectively, for Yahoo! and Microsoft). It charged more for each click, thanks to its bigger network of advertisers and more competitive online auctions. And it had far higher “click-through rates”, because it made these ads more relevant and useful, so that web users click on them more often.

Perhaps most tellingly, advertisers do better with Google. Mr Rimm-Kaufman found that Google’s ads “converted” more often into actual sales, which tended to be larger than those originating from Yahoo! or Microsoft. This is astonishing, given that Yahoo! has just spent a year on an all-out effort, codenamed Panama, to close precisely these gaps.

This is the power that Google has over all its rivals. How long will this technological power last? That, in the world of technology, is hard to know. But, the chance always exists that someone will come along with a powerful new logarithm that will provide event better returns to the consumer and advertiser. This, of course, is very hard when the technology is backed by a strong brand and trust in your product. Even if there is a new technological option for the consumer as long as the brand stays strong it is going to be hard to scale up to truly challenge Google.

My guess is you will see increasing efforts at trying to tackle the brand power of Google. Hell, if you can’t match um, well, just talk bleep about them. (ex: Nike, Microsoft, China)