Search mar­ket­ing is unprece­dented in its effi­ciency. It makes it very easy for adver­tis­ers to build cam­paigns and deliv­ers excel­lent return on invest­ment. And among the Search plat­forms, Google is King. While one can argue the var­i­ous rea­sons why Google is the leader, the biggest rea­son is most peo­ple (80% as per our data) use Google for their searches.  While fea­tures and tools might draw adver­tis­ers to a plat­form, it’s access to large audi­ences that is the biggest draw for adver­tis­ers when it comes to the adop­tion of a mar­ket­ing platform. 

So the big ques­tion on Google+ is:  do con­sumers need a bet­ter social media mousetrap?

For the most part, peo­ple seem to be con­tent using Face­book for their social net­work­ing, and con­sumers have invested sig­nif­i­cant time build­ing their net­works on the plat­form. Users are also quite accus­tomed to the inter­face and fea­tures by now. Google+ will have to be sig­nif­i­cantly supe­rior and pro­vide con­sumers with a hard-to-replicate set of net­work­ing tools to make it worth their time to switch plat­forms. Yes, Google+ has video chat­ting with “Hang­outs,” “Hud­dle” and “Instant Upload” – inter­est­ing, but is it inter­est­ing enough to incen­tivize con­sumers to switch? More impor­tantly, can and will Face­book repli­cate these fea­tures in a few months on their platform?

The answer to this ques­tion will deter­mine Google+’s com­mer­cial suc­cess. Greater adop­tion would lead to a bet­ter social graph for Google, which in turn would enable adver­tis­ers to tar­get audi­ences effec­tively and eco­nom­i­cally. If we momen­tar­ily assume that con­sumers would indeed adopt Google+, we can focus our atten­tion on the adver­tiser side of the equa­tion. What can Google do to ensure adver­tiser side adop­tion? I believe that Google can focus on four fronts to build a viable social adver­tis­ing product.

   1.  Tar­get­ing capa­bil­ity: Our work with sev­eral large adver­tis­ers on Face­book has shown that the abil­ity to tar­get audi­ences by age, gen­der and inter­est can drive sig­nif­i­cant effi­cien­cies. Still, adver­tis­ers would like more tar­get­ing con­trols. For instance, on the Face­book plat­form adver­tis­ers can­not tar­get log­i­cal com­bi­na­tions of dif­fer­ent inter­est seg­ments (you can tar­get peo­ple who are inter­ested in bikes OR scoot­ers OR cars but not those who like bikes AND scoot­ers but NOT cars). More­over, with their extremely rich Search and Dis­play dataset they could pro­vide adver­tis­ers with tools to expand their targeting.

   2.  Trans­parency: The Adwords plat­form is more trans­par­ent than Facebook’s cur­rent plat­form. Met­rics such as posi­tion, clicks, bid etc. are read­ily avail­able on Adwords on an hourly basis. Face­book does pro­vide this data, but the mechan­ics of the auc­tion process and report­ing are far less trans­par­ent.  If Google could pro­vide Search-like trans­parency to social adver­tis­ing it would be a sig­nif­i­cant ben­e­fit to the advertiser.

   3.  Sig­nals: The “Like” but­ton was rev­o­lu­tion­ary: for the first time there was a way in which con­sumers could tell adver­tis­ers that they wanted to inter­act with an event, action, brand or prod­uct rather than adver­tis­ers hav­ing to infer this from con­sumer behav­ior. Need­less to say, the qual­ity of this sig­nal is far supe­rior to any infer­en­tial sig­nal that fancy math­e­mat­ics could pro­vide. The “+1 but­ton” was Google’s answer to the “Like” Face­book fea­ture, but thus far it has failed to catch on. More­over, the cur­rent ver­sion of +1 does not inte­grate with Google+. Its inte­gra­tion with user feeds (“Streams”) is vital to its suc­cess, and I sur­mise Google’s engi­neers are work­ing to fix this issue.

Addi­tion­ally, our analy­sis has shown that between 40–50% of social con­ver­sions involve other chan­nels such as Search, Dis­play etc. An exam­ple is shown below:

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Since Google has the biggest Search and sig­nif­i­cant Dis­play foot­print, it could pro­vide very strong intent sig­nals to adver­tis­ers. This would help adver­tis­ers make their social and Search cam­paigns more efficient.

   4.  Ad For­mats: Text ads work remark­ably well in Search. But will they work well on the social front? Per­haps, but per­haps not. The choice of image and image qual­ity are very impor­tant deter­mi­nants of an ad’s suc­cess on Face­book. Things might be dif­fer­ent on Google+ but Google would do well to pro­vide dif­fer­ent ad for­mats to adver­tis­ers to test and decide for themselves.

Avoid­ing the Inven­tors Dilemma

In the book Inven­tors Dilemma (1997), the author, Clay­ton Chris­tensen, shows that sev­eral suc­cess­ful com­pa­nies even­tu­ally lose their dom­i­nance because of dis­rup­tive tech­nolo­gies. The new tech­nol­ogy does not take the incum­bent head-on. It ini­tially gains suc­cess in a sim­i­lar mar­ket before suc­cess­fully replac­ing the older tech­nol­ogy. Counter-intuitively, the incum­bent makes all the right ratio­nal and sen­si­ble deci­sions to pro­tect its pri­mary mar­ket which in the long run leads to its demise as it does not take the new tech­nol­ogy head on. Google is at a sim­i­lar cross­roads. It’s the mar­ket leader in Search but has failed to take social net­work­ing head on until now. Google Wave and Google Buzz never took off.  Google+ is the company’s lat­est attempt to over­come its Inventor’s Dilemma. How­ever, to make it work they should first incen­tivize con­sumers to rebuild their social graphs to avoid the fate of Google+ becom­ing a Face­book clone.

Dr. Sid­dharth Shah
Sr. Direc­tor, Busi­ness Analytics

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