Tonight Google crossed the $50B
mark, and co-founder Larry Page said "not a bad
achievement in just a decade and a half." The majority of Google revenues
(54%) come from overseas and its interesting that Internet users as a
percentage of the population is still very low in the developing world.
Bangladesh has only 5 % of the population on the Internet
compared to about 78% of the population in the US. But this Internet user group
is rising in the developing world. Internet cafes tend to be full and home
Internet via high speed DSL is getting more affordable. Anyone intending to go
to college, tries to afford a computer at home just after getting a cell phone.
The cell phone is top priority in these markets simply because wired lines take
ages to install and wireless towers are far easier to put in place. It is quite
possible that many Internet users directly move to a smart phone and never buy
a personal computer or laptop or even a tablet. But here is how Google taps into
the power of the flat world:
- For the Internet searcher: The Google formula is simple here- makes the searcher
happy by providing the most relevant organic search results. If you search
Google from any country, you get local results. And this goes for Google
sites like YouTube, Scholar etc. The paid Ads that show up tend to be geo-targeted
and relevant to the search terms- at that location. The advertiser
pays only when someone clicks, the impressions are free. The advertiser
could be from anywhere in the world. - For the GoogleAdWords Advertiser: The Advertiser can choose locations on the globe
where s/he wants Ads to appear. These locations can be just 100 miles
around a particular town. So if you are trying to sell to the auto
industry you might want to advertise around Detroit and not advertise
around Boston. You can also narrow down and specify if you want your Ad to
appear on Laptops or PC's and on mobile phones and Tablets. And yes you
can specify that the Ad shows only on iPhone and iPads. Just in case the
busy auto executive is checking out stuff on the iPad at the airport. And
the best part is that the advertiser can be a small firm located in Asia.
The Asian firm pays Google in local currency when someone clicks the Ad in
Detroit.
But why are businesses willing to
increasingly spend on Google AdWords? Well because Google provides value
and click costs have gone down 6%. If properly managed, Google AdWords is far
more effective than Direct Mail and other forms of direct response advertising.
One reason is that no Direct Mail or Tele Sales company ever tries to find out
if you really want that junk mail or phone call. In contrast,with AdWords you
see Ads that are directly related to your search. In case clicking on the Ads
leads to irrelevant (to the search) pages the Ads become costlier to the
advertiser because the primary aim is to serve the searcher and not the
advertiser. This sharp focus on first serving the
Internet searcher is great business policy with great profits for
Google.Contact StratoServe.