Google Benefiting From Advertisers’ Ignorance
Jon Morris is the founder of Internet Marketing Initiative, which is a search engine marketing firm. He claims that if advertisers using Google’s ad platform knew what they were doing, they would save themselves $2.1 billion, while costing Google the same amount.
Of course, Morris points to the aid of search engine marketing firms as a salve to this problem, but his point is an interesting one at the very least.
Morris estimates that about 70% of all online advertisers are oblivious to the inner-workings of advertising effectively on the Internet and that these advertisers could be spending 30% less and get the same results. This is, of course, with the help of a search engine marketing firm.
Google claims that it is all for more efficient advertising and that the company even provides its advertisers with free tools to help them towards this end. A spokesperson said, “The adoption of our tools is high and customers frequently manage their bids. If advertisers are bidding inefficiently, the behavior will not be sustainable for the advertiser. Ultimately, we believe advertisers are spending in ways that deliver strong ROI and value to their business.”
Google currently takes in over $10 billion in annual revenue, which is overwhelmingly dependent on its Internet advertising operations. A $2.1 billion hit to this figure would be significant.
All speculative hypotheses aside, one thing that is concretely highlighted here is something that virtually everyone knows: Google is founded on online advertising. Yes, the search giant has made its futile attempts to branch out into the non-Web worlds of advertising, but the fact remains that as its online advertising strength goes, so goes Google’s overall viability as a powerhouse.
Nothing on the horizon seems to threaten Google now, but if search engines become commoditized as some are expecting, then all bets are off.
But let’s stay away from speculative hypotheses for now.
Sources:
http://news.yahoo.com/s/cmp/20070325/tc_cmp/
198500531;_ylt=AsP3z00hnFWKI5EpTN1YEK_6VbIF
