Is Google killing its golden goose?

Image source: Forbes.com
Online advertising spends, including spends on Adwords have been coming under a lot of scrutiny and discussion. In a world of numerous options, the marketers are looking for the greatest ROMI (return on marketing investments)

Traditionally, search marketing has been the most effective way to reach the target audience. Target audience defined here are the people who are in-market for a solution that pertains to the product or service offerings. However, with proliferation of different platforms, the way people discover and consume content too has changed.

The beauty of Google was that it’s search results were the closest to what people actually wanted. (While I have a different take on this, I’ll save it for a different post of a different date). When the paid search was added to the search results, a clear demarkation with the paid content on the right and organic results on the left still kept the ‘territorial integrity’ in tact. Even when the Adwords copy started appearing on top of the search results, the rationale that, it depended on the Quality Score, was accepted.

However, the latest move of totally removing the right side ads, and both (Paid and Organic) the search results being shown on the same side of the SERP page might have short term and long term impact on revenues and search business

Short term:

  • Increased cost of CPC, would mean that a lot of smaller players will either shift their monies elsewhere or withdraw completely from google search marketing
  • Increased CTR could also increase the number of irrelevant clicks.. which means the marketers paying basis ROI would start reconsidering their budget on search marketing
  • An upside would be that companies will start focussing on SEO and quality content becomes critical
  • Companies will stop search advertising for ‘awareness’ purpose and solely focus on demand generation.

Long term:

  • Replacing the RHS ads with PLAs (Product Listing Ads) is good in the short term, but in the long run, as internet companies focus on building brands, the relevance of product search through google will reduce
  • Google might also need to relook at the monetisation model, and the PLA might have to work on affiliate marketing model (commission on transaction)


Let’s wait and see how the market and user receive this latest updated.

Cheers

Santosh

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