What company rents 200 goats to help manage weeds and brush at their headquarters? Google Incorporated. The billion-dollar company started by two college grads, has many unique qualities that have dated back to 1996 when Larry Page and Sergey Brin first began collaborating. They developed a search engine called BackRub. BackRub operated under Stanford servers for a little over a year. Page and Brin brought BackRub to the public web then changed the name to from BackRub to Google. The site was up and running for a few months when they received a check for $100,000 to help jumpstart their company. Google then moved in a garage, and set up an office in California. The two file for incorporation in California in 1998, and eventually open a bank account under the name of Google Inc. In only September, they hire Craig Silverstein. By December, PC Magazine recognizes Google as the search engine of choice in the Top 100 Web Sites for 1998. At this point, Google is up and rolling. In 2000, Google launches in eleven different languages. A few short months later Google debuts their first ever advertising platform.
They simply used sales reps to sell ads, and they were sold at a cost-per-impression (CPM) basis. “Instead of using banner ads, the dominant ad format of the time, Google decided to sell only unobtrusive text ads” (Karp). At this time, Google only had 350 clients. Then, they developed a new advertising platform called AdWords. They developed this marketing platform on the basis of the 3 R’s: Reach, Relevance, and Return on investment. Google did not use standard banner advertisements because they did not want to be intrusive to their customers. So, they make ads appear very similar to what the search results find, but are kept separate from search results. Not only do ads look like the search results, they are similar to the content of the search results. “We don’t allow ads to be displayed on our results pages unless they are relevant where they are shown. And we firmly believe that ads can provide useful information if, and only if, they are relevant to what you wish to find” (Google). For example, if someone searches “Universities in Kansas” then the advertisements such as, “Fort Hays State University” or “University of Kansas” may appear on Google’s sidebar as an advertisement. Google separated ads from search results because they feel it is unobtrusive if it done this way. Google’s first priority according to “Ten things we know to be true” is to focus on the user and all else will follow. “Since the beginning, we’ve focused on providing the best user experience possible.Whether we’re designing a new Internet browser or a new tweak to the look of the homepage, we take great care to ensure that they will ultimately serve you. Placement in search results is never sold to anyone, and advertising is not only clearly marked as such, it offers relevant content and is not distracting” (Google).
In 2001, Google introduced an alternative to monetizing AdWords called cost-per-click (CPC). Another company, Overture, had already had this CPC model and was proving successful. Google’s revenue was on pace to hit $85 million, but ended up being out-paced by Overture, which earned $288 using CPC. Overture not only used CPC, but they incorporated an auction model, where advertisers bid on how much they would pay per click. For example, if Wal-Mart bid $1.00 and Dillon’s big $.50, then the Wal-Mart advertisement would be shown before the Dillon’s, in Overtures CPC model. Google advertisers no longer had to pay for their advertisements if they were shown on Google’s homepage, only if the ad was clicked on. Google, however, realized a flaw in Overture’s model. Advertisers could simply increase their bids in order to be at the top of the ranking with an irrelevant ad. This went against Google’s code that consumers come first. If the bid was high, then the ad could be irrelevant. If the ad was irrelevant then the user would not click on it, and no one would make a profit. Therefore, a short year later Google introduced an updated AdWord model. This model debuted click-through rate as a measure of the advertisement relevance. This relevance then would be put into Google’s very own ranking algorithm, known as PageRank. For example, if an ad with a lower bid per click got clicked more often, it would be ranked higher than an ad with a higher bid and lower click rate.”Google’s decision to factor click through into an advertiser’s ranking forced an economy of relevance and profit into the pay-per-click model” (Battelle). Google also abandoned it’s the CPM model, and incorporated the CPC model.
Another advertising platform that Google offers is AdSense. AdSense is a program that offers many benefits to content publishers or websites. Google offers this option to websites that generate a certain amount of traffic. AdSense allows sites to display advertisements from Google’s database. This type of AdSense is called AdSense for Content. Visitors of the publishers website see ads relating to their personal interest; the publisher is then paid on either a CPM or a CPC basis. If the visitor clicks the ad, Google and the publisher earn revenue if it is a CPC advertisement. The second type of AdSense is AdSense for Search. This type of AdSense allows publishers of websites to place a Google search box on the website. Publishers earn revenue when a user clicks on an ad that appears of the search results page. However, publishers do not earn revenue just from the display of an ad on the search results page. Publishers and advertisers alike are also able to track their advertising and business progress through Google Analytics– which was introduced in 2005.
Businesses are able to control all of their own budget, bidding, statistics, and analysis online through Google Analytics.It allows advertisers to change key words of their advertisements in order to make them more appealing to their audience, in hopes to bring more interest to their website and product or service. It provides access to track progress and relevance of their advertisements. Google Analytics also gives publishers and advertisers fresh insights into how visitors are using their site, how much time visitors are visiting their site, and how to keep them coming back (Google). Businesses who use AdSense can also track progress through Google Analytics. Google Advertising has proven successful to many companies; two particular businesses have proven that Google can lead them to Advertising and business success.
Carolina Rustica is a company in North Carolina. They sell handmade household items from across the world.
Owner Richard Sexton, has used Google marketing for almost seven years. He opened his business in his garage, and wasn’t making enough money by word of mouth. He tried using newspaper ads to advertise his business, but his small town of 8,000 people could not support this type of business. He turned to the Internet for advice on how to advertise, and this is when his Google became is marketing plan. “Carolina Rustica uses Google AdWords, Analytics, Checkout, and Base to increase its conversion rate by 20% and overall sales by 50%” (Google).
Another classic example of a business that has greatly benefited and capitalized using various Googling marketing efforts is First Crush Restaurant. First Crush is a restaurant that caters to wine lovers in southern California. They have a large selection of wine, along with a restaurant and incredible wait staff. Owner, Sharam Bijan stated, “There are so many restaurants in San Francisco. I want to my business to cater to people who have an appreciation for wine, or those who love trendy restaurants. We are so far from the typical burger joint or taco stand.” Google AdWords helped them do this. A few words that he and Google had chosen to use as his chosen key search words are: trendy, wine, classy, San Francisco, restaurant, eatery, and cuisine. These words along with his Google advertisements have led to a tremendous increase to First Crush’s traffic site. The site has increased its traffic by 400% since using Google AdWords. “The people at Google help you find optimize keywords so it’s the most effective. It’s proved to really grab our target audience,” said Bijan.
To predict Google’s future, we must look back at the history. Google has innovated two major parts in their marketing success: PageRank and relevance of per-per-click model. “What’s notable is that Google didn’t invent search or auction-based pay-per-click advertising– their innovation was perfecting it” (GUY). Perhaps Google will invent the next leap in advertising, or perhaps they are already perfecting someone else’s mistake. Another point that bloggers are making is competing with Facebook. People trust their friends over random websites; with that said, Internet users are turning to Facebook for answers to questions or opinions of products, and then turning to Google for price input.Google may have to step-up their game as far as Google plus.
Karp, Scott. “Publishing 2.0.” Google AdWords: A Brief History Of Online Advertising Innovation. N.p., 27 2008. Web.Web. 7 Dec. 2012. < http://publishing2.com/2008/05/27/google-adwords-a-brief-history-of-online-advertising-innovation/>.
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“Google AdWords Success Story: Carolina Rustica”. YouTube.com. 3 December 2012. < https://www.youtube.com/watch?v=ROpcfusiBEw >.
“Google AdWords Success Story: First Crush Restaurant”. YouTube.com. 3 December 2012. < https://www.youtube.com/watch?v=ROpcfusiBEw >.