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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