Google Strategic Mktg Presentation (2010-2012)

Case Study
Strategic Marketing

DM&T

Company Brief

- Search Engine, Cloud computing, Software and Advertising
technologies
- Larry Page and Sergey Brin in 1998, initial public offering in 2004
- Chain of products, acquisitions, partnership, offline, desktop and
mobile industry
- Page Ranking No. 1 in the world
- Over 1 Billion search requirements daily
- 22,000 full time employees
- Rated No.1 of ‘Best company’s to work for’ in the world
- Ranking No. 4 of the top 100 brands in the world
- May 2012, dominate the search engine world, market share of 87.6%

Case Outline
- Between 2005-2010 extended its websites beyond search functionality, such as
Mobile OS and apps
- Business model evolved and expanded to advertising-based revenue
- AdWords and AdSense generate majority online advertising revenue
- Strategies to dominate Internet Advertising and aiming No. 1 search engine
- More than half revenues and traffic generated outside US. Emerging Russia &
China
- Android 2008
- Strategic offensive to control Desktop
- Initiatives to Expand Search Television
- Internet rivals in US market
- Concerned issues
- Performance – focusing SmartPhone platforms, dominate Cloud Computing,
increase advertising revenues, and extending search to television
- Censorship in China
- Privacy violation against its principle ‘you can make money without doing evil’

Industry Analysis
• Industry: Internet services and technologies

• Major Sectors:
– Advertising
– Search engine
– Cloud computing

• Primary Revenue Source: Advertising (97%)

• Constantly evolving Industry definitions

KSFs/Threats of Industry
Key Success Factors Threats
• Data mining • Ethical implications (data)

• Innovation-focus • Losing market share to other

forms of advertising
• Scalability
• Being cut-out of the value chain
• Reliability & data integrity
by other companies (upstream
• Strategic portfolio-management
or downstream)

SWOT Analysis
S W
TRENGTHS EAKNESSES

• Search engine industry • Public perception of Google’s
• Executive management practices
• Large cash flow • Non-corporation by foreign
• Loyal and satisfied employees governments Internal
• Loyal customers • Decisions being made to progress factors
• Products are very adaptable Google
• Pushing society’s technology • Advertising revenue growth is
• Channels for the phone market slowing down
• Scalability
• Openness

O T
PPORTUNITIES HREATS

• Secure consumers personal info
• Copyright lawsuits/issues
• Resurrect relationship with
• Public perception of Google
Chinese market
• Microsoft’s growing dislike External
• Focus into developing tangible
• Continued insistence by some factors
technology
• Relationship in other websites foreign governments
• Microsoft and Yahoo possible
• Gaps in online market offering
partnership
• Targeting specific markets-
• Advertising space is becoming
children or senior citizens
• Future expansion for television more competitive
• Revenue through advertising

Positive Negative

Core Competitive Spectrum
Legend:

“Google are more like
us than anyone we’ve
ever competed with”.

Bill Gates – Microsoft
(2005)

Google’s Advertising Value Chain

For the last three financial years,
around 97% of Google’s income has
come from advertising.

“Everything that sits between a users eyeballs on
one end, and advertisers dollars on the other is
considered strategic to Google”.
(DMR, 2010)

Google’s Advertising Value Chain

Porter’s 5 Forces
LEGEND:

Advertising Value Chain

Marketing Strategy
• USP: Google facilitate the efficient
organisation, storage and retrieval of
data/information across a wide (online)
platform. The result is a convenient,
customizable, co-creation approach to media
sharing for the use of individuals and
organisations alike.

• Profit formula: Mostly dependent on
advertising (97%), other main areas is software
licencing to businesses

Key Strategic Areas for Google
Competencies Capabilities Resources
• Search • Recruitment & retention • Data warehouse
• Data warehousing of talented staff • Huge financial resources
• Innovation • Facilitation of content co- • Expert & motivated
• Software programming creation on the web personnel

• Cloud computing • Brand name

• Brand management & PR • Search engine
• Online traffic
• Display network
• Loyal customers

Segmentation & Targeting
• The Google company:
– Offers products that generally appeal to a mass market
– Doesn’t matter what you are using the web for
• Search is the common denominator for everyone; a ‘home-base’ from which to begin your
journey
– Target web users all over the world
• particularly Nth America, Europe, Russia, Australasia

• Google Advertising:
– Targets advertisers whose market frequent the internet
– Can be targeted with precision at a local or worldwide level

Positioning Analysis
• The Google company is positioned as:
– Solution-centric
– Innovative
– Socially responsible
– Vast networks, deep knowledge

• Google Advertising network
– Advertiser-friendly
– Traceable metrics – Google Analytics
– Credible, tasteful advertising
– Rewarding for all parties (advertiser, host & viewer)

Google Brand Value
• Household name
• Verb in Webster’s dictionary
• Interbrand Brand of the year, 2003
• Quantifying Brand Value
– $55B (Interbrand, 2011)
– $111B (Brandz, 2011)

• Google offerings are largely free
– Customer feelings - Love, Loyalty, Share of heart

Competitive Advantage
• Brand image
• Infrastructure
– servers, storage systems, hardware

• Resource abundance
• Scalability
• Wide knowledge base
– Ability to branch off into other areas

Problem Diagnosis
Key Issue: Google’s Advertising revenue is under threat

• Likely due to a combination of factors
• Our strategic options tackle this issue head-on

Strategic Options
More advertising real-
estate; grow Google
(A) Extend the Google sites through
acquisition; grow
Advertising Network Google Display
Network

Focus our future
(B) Focus on Tangible competitive strategy
on tangible technology
Technology to make up for lost
advertising revenue

Develop our own
version of E-Bay for
(C) Google B2B Platform businesses. Will lead
to more traffic &
advertising potential

Extend the Google Advertising Network
Option A
• Attempt to acquire Wikipedia
•6th Most popular website in the world
•Wide market appeal
•Trusted resource
•Currently run as a NFP company
•Bid $6B

•Promotion •Grow the network
Google Group Display Network
Invest $2B in 5 new potential
promotion of Google partners identified.
group products, such They all feature in
as Google Voice, the Top 100 most
YouTube Live, & visited websites in
Google+ the world.

Extend the Google Advertising Network
Option A

• Cost: $2B + $6B (Wiki) = $8B

• Time Frame: Short-medium term

• Payoff Potential: Medium

• Risk Factor: Low
• Best Case Scenario:
Acquire Wikipedia, grow display network, G+/YTL/Voice grow traffic, advertising revenues double

• Worst Case Scenario:
Wikipedia deal doesn’t eventuate, G+/YTL/Voice do not grow traffic, network proposals knocked back

Focus on Tangible Technology
Option B
• Google Retail Store
•Google focuses on future TANGIBLE technology
•These technologies are displayed for everyone to see
•Store allows the public to use and ‘experience’ these innovations
•The world sees where the future is leading
•Products will be available to order and buy
•Decreasing dependence on adv. Rev. (80%)

•Product Innovation •Store Development
$3B to be invested into •Located in New York City
research and development •Free for public to
for new product designs, experience
such as Google glasses, •Hype is generated through
Google TV, Google phone, Google’s online platforms
Google Driverless Car •$1.1M to rent, $0.4M for
renovations and set-up

Focus on Tangible Technology
Option B

• Cost: $1.5M + $3B = $3.15B

• Time Frame: Short-medium term

• Payoff Potential: Low-medium

• Risk Factor: Medium
Google store is successful, products are purchased, more innovations developed, revenue increases 75%

Google store isn’t popular, no products get ordered/purchased, Google receives negative brand image

Google B2B Platform
Option C
• Business-to-business trading platform
•The new trading platform for all levels of businesses
•Allow companies trade globally on the new platform
•Utilize Google+ and all related products as tools in
communication
•The first and only international based B2B platform for all
businesses

•Product Expansion •Integrated usage
Invest $1 B in developing Create convenience for

and designing the new businesses in trading,

website and features and and increase traffic by

on promotion throughout using Google+ and its

Google+ and Youtube, etc. related products to
integrate the functions

Google B2B platform
Option C

• Cost: $1B
• Time Frame: Medium
• Payoff Potential: Low – Medium
• Risk Factor: Medium
New platform for B2B trading, increase advertising revenue and usage of related Google products

If fails, the B2B platform idea could be pursued by Google+ Brand and Google+ Business

Suggested Strategic Option
• How we decided on our option

Network Expansion Tangible Store Global B2B

Cost $2 - $8 Billion $1.5M+$3 Billion $1 Billion

Risk Factor Low Medium Medium

Payoff Potential Medium Low - Medium Low - Medium

Time Frame Short - Medium Short - Medium Medium

• OPTION A – ‘Extend the Advertising Network’
– best likelihood of success
– promising reward
– directly pertains to our key issue.

Why Wiki?
• Potential for advertising revenue
– 6th most visited website in the world
– An estimated 50 million page hits per day
• Great longevity in Wiki
– Great brand, complimentary to ours
– People will use this resource well into the future
• Boost Google brand value
– Great credibility
– Consistent with Google’s approach of co-creation
– Open platforms
– Organising information for public use

Wiki Strategy
• Maintain many of the same processes
• Retain all current staff
• Public transparency measures in place
• Keep it very much a public site – for the public,
by the public
– Retain many of the public contributors, while at the
same time dedicating resources to maintaining the
integrity of the data
• Running a subtle, tasteful advertising program
• Generous offer (double the avg. estimate)

Suggested Strategy cont’d
•Promotion •Grow the network
Google Group Display Network
Invest $2B in 5 new potential
promotion of Google partners identified.
group products, such They all feature in
as Google Voice, the Top 100 most
YouTube Live, & visited websites in
Google+ the world.

• More YouTube Live events • Seek new partnerships
• Publicity stunt for G+ • Grow our non-Google Group
• Online advertising for G-Voice real estate
• An estimated 170M hits per
day

Financial outlook
• Total cost = $8B • Must make 4.4c per
• Recoup investment impression to recoup
investment in 1 year
– Possible in 1 yr

• If we make 4.4c per
• Pageviews per day
impression, and site
914,195,510
traffic stays constant,
this venture will
x2 ads per page = 1,828,391,020
$8B / 1,828,391020 = 4.375c ea ad
make $8B per year
impression (CPI)

Business Model
• Business Model • Regardless of
Changes Strategic Option
– Revenue model: is – Constantly improve search
accentuated towards function, key resource and
advertising catalyst for advertising
– Cost structure: can achieve revenue
greater advertising – Corporate review: 10
economies of scale with commandments of Google,
wider advertising network and Hierarchy of strategic
– Channels: Widening our focus
channels, and accentuating – Communicate revised vision
role of Google Group in our simply to all stakeholders,
overall advertising spectrum internal and external

Company Values
The 10 Google commandments

1. Focus on the user and all else will follow
2. It’s best to do one thing, really, really well
3. Fast is better than slow
4. Democracy on the web works
5. You don’t need to be at your desk to get an answer
6. You can make money without doing evil
7. There’s always more information out there
8. The need for information crosses all borders
9. You can be serious without a suit
10. Great just isn’t good enough
(2001)

References
• http://www.interbrand.com/en/best-global-brands/best-global-brands-2008/best-global-brands-2011.aspx
• http://www.businessinsider.com/jimmy-wales-wikipedia-operations-2010-5
• http://www.millwardbrown.com%2Flibraries%2Foptimor_brandz_files%2F2011_brandZ_top100_report
• http://support.google.com/adwords/bin/answer.py?hl=en&answer=6104
• http://www.davechaffey.com/E-commerce-Internet-marketing-case-studies/Google-case-study
• http://www.wordstream.com/articles/google-earnings
• http://investor.google.com/earnings.html
• http://www.slideshare.net/korhan/google-brand-analysis-presentation
• http://www.slideshare.net/kimuh72/google-facts-216737
• http://issuu.com/samy20002000fr/docs/google_ksf_en
• http://www.google.org
• http://screwcable.com/google-vs-apple-vs-amazon-where-should-you-store-your-music/
• http://www.minterest.com/60-google-products-services-you-probably-dont-know/
• http://www.space.com/15395-asteroid-mining-planetary-resources.html
• http://mysteriousuniverse.org/2012/04/private-spaces-google-goes-to-outer-space-for-new-business-idea/
• http://en.wikipedia.org/wiki/Google_driverless_car
• http://thenextweb.com/apple/2012/03/13/the-ftc-subpoena-of-apple-could-spell-the-end-of-googles-default-search-status-on-the-iphone/
• http://www.mckinseyquarterly.com/Googles_view_on_the_future_of_business_An_interview_with_CEO_Eric_Schmidt_2229
• http://www.businessweek.com/articles/2012-04-04/googles-page-apples-android-pique-for-show#p1
• http://www.businessinsider.com/jimmy-wales-wikipedia-operations-2010-5
• http://answers.yahoo.com/question/index?qid=20081231182156AAyCsro
• http://www.centives.net/S/2012/how-much-is-wikipedia-worth/
• http://www.google.com/adplanner/static/top1000/
• http://en.wikipedia.org/wiki/History_of_Wikipedia#Historical_overview_by_year

• http://www.digitalbuzzblog.com/infographic-first-google-plus-statistics-and-facts/
• http://www.karmasnack.com/about/search-engine-market-share/
• http://www.artificialbrains.com/google-x-lab
• http://www.androidauthority.com/google-glasses-project-glass-competition-alternative-73115/
• http://www.slideshare.net/guest1e7675/google-172419?src=related_normal&rel=5279067
• http://www.slideshare.net/joshs633/strategic-analysis-google
• http://searchengineland.com/googles-international-financial-performance-reveals-44-growth-97114
• http://www.scribd.com/doc/34389420/2010-Q2-Google-Earnings-Slides
• http://www.csmonitor.com/Commentary/the-monitors-view/2010/0325/Google-out-of-China-Doing-no-evil
• http://www.reuters.com/article/2011/01/13/us-google-china-idUSTRE70C1X820110113
• http://googleblog.blogspot.com.au/2010/08/google-scholarship-program-kicks-off-in.html
• http://online.wsj.com/article/SB10001424052702303978104577364333698241936.html?mod=googlenews_wsj
• http://www.androidauthority.com/google-play-vs-apple-app-store-2012-76566/
• http://www.zdnet.com.au/googles-secret-weapon-webtop-339336545.htm
• http://www.fiercewireless.com/story/google-turns-motorolas-webtop-battle-apple-microsoft/2012-04-23
• http://www.engadget.com/2012/04/04/motorola-webtop-3-0-beta-leak/
• http://thenextweb.com/asia/2012/04/25/google-drive-blocked-in-china-hours-after-launch-leaving-baidu-and-local-players-to-dominate/
• http://www.netmarketshare.com/search-engine-market-share.aspx?qprid=6
• http://latimesblogs.latimes.com/technology/2011/07/rowling-partners-with-google-snubs-apple-and-paypal.html
• http://www.minterest.com/60-google-products-services-you-probably-dont-know/
• http://www.comscore.com/Press_Events/Press_Releases/2012/1/comScore_Releases_December_2011_U.S._Search_Engine_Rankings
• http://www.interbrand.com/en/best-global-brands/best-global-brands-2008/best-global-brands-2011.aspx
• http://www.axleration.com/chinas-answer-to-social-networking-infographic/
• http://tech.ifeng.com/telecom/special/googlemoto/content-2/detail_2012_03/21/13337628_0.shtml?_from_ralated
• http://ausdroid.net/2012/03/15/vodafone-opens-new-store-in-melbourne-containing-galaxy-zone/
• http://www.axleration.com/google-vs-facebook-privacy-infographic/
• http://www.axleration.com/most-followed-brand-google-plus/
• http://www.axleration.com/google-plus-launches-pages-for-businesses/
• http://www.axleration.com/google-plus-two-months-old-and-misunderstood/
• http://www.webdeveloper.net.au/web-usage/search-engine/google-web-search/

Google’s Innovations
Google glasses – Project Glass

http://www.youtube.com/watch?feature=player_embedded&v=9c6W4CCU9M4

Google’s Advertising Programs

Pageviews per day
• Wiki – 51M
• LinkedIn – 63M
• MySpace – 800M
• VK – 164,000
• QQ Zone – 21,510
• Dictionary.com – (unknown) est. 10,000*

TOTAL = 914,195,510 pageviews per day
Source http://royal.pingdom.com/2010/01/05/facebook-twitter-myspace-page-views/

Google Strategic Mktg Presentation (2010-2012)

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