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 companys 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
Data mining Innovation-focus

Threats
Ethical implications (data) Losing market share to other forms of advertising Being cut-out of the value chain by other companies

Scalability
Reliability & data integrity Strategic portfolio-management

(upstream or downstream)

SWOT Analysis
Search engine industry Executive management Large cash flow Loyal and satisfied employees Loyal customers Products are very adaptable Pushing societys technology Channels for the phone market Scalability Openness

TRENGTHS

EAKNESSES

Public perception of Googles practices Non-corporation by foreign governments Decisions being made to progress Google Advertising revenue growth is slowing down

Internal factors

PPORTUNITIES

Secure consumers personal info Resurrect relationship with Chinese market Focus into developing tangible technology Relationship in other websites Gaps in online market offering Targeting specific marketschildren or senior citizens Future expansion for television Revenue through advertising
Positive

HREATS

Copyright lawsuits/issues Public perception of Google Microsofts growing dislike Continued insistence by some foreign governments Microsoft and Yahoo possible partnership Advertising space is becoming more competitive

External factors

Negative

Core Competitive Spectrum

Legend:

Google are more like us than anyone weve ever competed with. Bill Gates Microsoft
(2005)

Googles Advertising Value Chain

For the last three financial years, around 97% of Googles 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)

Googles Advertising Value Chain

Googles Advertising Value Chain

Googles Advertising Value Chain

Porters 5 Forces
Advertising Value Chain

LEGEND:

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
Search Data warehousing Innovation Software programming Cloud computing Brand management & PR

Capabilities
Recruitment & retention of talented staff Facilitation of content cocreation on the web

Resources
Data warehouse Huge financial resources Expert & motivated personnel Brand name Search engine Online traffic Display network Loyal customers

Segmentation & Targeting

The Google company:
Offers products that generally appeal to a mass market Doesnt 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 Websters 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: Googles Advertising revenue is under threat

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

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

(B) Focus on Tangible Technology

Focus our future competitive strategy on tangible technology to make up for lost advertising revenue

(C) Google B2B Platform

Develop our own version of E-Bay for 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

Google Group

Promotion
Invest $2B in promotion of Google group products, such as Google Voice, YouTube Live, & Google+

Display Network

Grow the network

5 new potential partners identified. They all feature in the Top 100 most visited websites in 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 doesnt 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
$3B to be invested into research and development

Store Development
Located in New York City Free for public to

for new product designs,

such as Google glasses, Google TV, Google phone, Google Driverless Car

experience
Hype is generated through Googles online platforms $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

Best Case Scenario:
Google store is successful, products are purchased, more innovations developed, revenue increases 75%

Worst Case Scenario:

Google store isnt 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
Invest $1 B in developing
and designing the new website and features and on promotion throughout Google+ and Youtube, etc.

Integrated usage
Create convenience for businesses in trading, and increase traffic by using Google+ and its related products to integrate the functions

Google B2B platform

Option C
Cost: $1B Time Frame: Medium Payoff Potential: Low Medium

Risk Factor: Medium

Best Case Scenario:
New platform for B2B trading, increase advertising revenue and usage of related Google products

Worst Case Scenario:

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 Cost Risk Factor Payoff Potential Time Frame $2 - $8 Billion Low Medium Short - Medium Tangible Store $1.5M+$3 Billion Medium Low - Medium Short - Medium Global B2B $1 Billion Medium Low - Medium Medium

OPTION A Extend the Advertising Network

best likelihood of success promising reward directly pertains to our key issue.

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

Google Group

Promotion
Invest $2B in promotion of Google group products, such as Google Voice, YouTube Live, & Google+

Display Network

Grow the network

5 new potential partners identified. They all feature in the Top 100 most visited websites in the world.

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 Googles 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 contd

Google Group Promotion
Invest $2B in promotion of Google group products, such as Google Voice, YouTube Live, & Google+

Display Network

Grow the network

5 new potential partners identified. They all feature in the Top 100 most visited websites in

the world.

More YouTube Live events Publicity stunt for G+ Online advertising for G-Voice

Seek new partnerships Grow our non-Google Group real estate An estimated 170M hits per day

Financial outlook
Total cost = $8B
Recoup investment
Possible in 1 yr

Must make 4.4c per impression to recoup investment in 1 year If we make 4.4c per impression, and site traffic stays constant, this venture will make $8B per year

Pageviews per day 914,195,510

x2 ads per page = 1,828,391,020 $8B / 1,828,391020 = 4.375c ea ad impression (CPI)

Business Model
Business Model Changes
Revenue model: is accentuated towards advertising Cost structure: can achieve greater advertising economies of scale with wider advertising network Channels: Widening our channels, and accentuating role of Google Group in our overall advertising spectrum

Regardless of Strategic Option

Constantly improve search function, key resource and catalyst for advertising revenue Corporate review: 10 commandments of Google, and Hierarchy of strategic focus Communicate revised vision simply to all stakeholders, internal and external

Questions?

Thankyou!

Company Values
The 10 Google commandments

1. 2.

Focus on the user and all else will follow Its best to do one thing, really, really well

3.
4. 5. 6. 7. 8. 9.

Fast is better than slow

Democracy on the web works You dont need to be at your desk to get an answer You can make money without doing evil Theres always more information out there The need for information crosses all borders You can be serious without a suit
(2001)

10. Great just isnt good enough

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.davechaffey.com/E-commerce-Internet-marketing-case-studies/Google-case-study 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.davechaffey.com/E-commerce-Internet-marketing-case-studies/Google-case-study 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/

Googles Innovations
Google glasses Project Glass

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

Most popular Google sites

Facebook Market Segmentation

Googles Advertising Programs

Social Network Numbers

Google Innovation Strategy

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/

Hierarchy of Strategic Focus