MARKETING ARENA

What do worldwide flu trends , wind power and
robot car drivers have in common ?
The answer is web search giant Google Inc . In
its 12 years of existence , the company has
revolutionized the way the Internet is used. Now
Google , whose mission is to organize the world ' s
information , hopes to expand into every facet of
our lives. From mobile phones, to televisions ,
searchable health records and electricity
production, it has a hand in each of these areas
and more . The giant is about to get a whole lot
bigger .
Or is it ?
While Google 's success has been astounding ,
some observers say the company has stumbled
in the face of new competitors and is now facing
its toughest fight yet . The once invincible
company has cracks in its armour , they say, and
must address those vulnerabilities or risk
becoming irrelevant in a changing web .
Google is the brainchild of Larry Page and
Sergey Brin , two engineers who met in 1995 as
PhD students at Stanford University near San
Francisco . The pair disliked how existing search
engines , Yahoo being the most popular , were
designed to make people stay on their website
so users could see as many ads as possible . They
wanted to create a simple engine that would
quickly display the most relevant information in
an easy - to - read format.
The company 's growth has been spectacular .
Today, Google is used by more than 70 per cent
of everyone who searches the web. Its
advertising revenue accounts for 40 per cent of
all advertising spent online. Since going public in
2004 , revenues and profits have climbed every
year ( the most recent annual results published
last month show revenues of $ 29 .3 billion, and
a net profit of $ 8 .5 billion) , and last year the
company added 20 employees on average every
week .
Along with "search," Google came to be known
as a company of innovation run by engineers,
where employees are given 20 per cent of their
time to work on any project they wish. That 's
how Google News was developed , and about
half of Google 's products . Google 's Gmail, Maps
and Street View, are supremely popular and
have helped further the Google brand .
" Many of the new initiatives that Google
launches can still somehow be tied backed to
monetization from search advertising ," said
Aaron Goldman, the chief marketing officer of
online marketing company Kenshoo and the
author of the book Everything I Know about
Marketing I Learned from Google .
He explained even Google 's robotic cars can be
justified because if robots can pilot cars , drivers
will be more at liberty to surf the web, looking
up restaurants or making travel arrangements
on the go . As for keeping track of flu trends,
which Google does by analyzing searches made
by its users, Goldman says that fits into the
company 's stated mission to organize the
world 's information. And Google 's foray into
producing electricity ? The company says that's a
way to power Google 's servers that are used for
cloud computing as part of the company's
mission to be more self- sufficient.
Innovation has been the key to the company 's
success , as is the company 's willingness to take
bets on new products that don ' t have a clear
revenue source . YouTube is a good example .
After Google bought the video - sharing site in
2006 for $ 1 . 65 billion , the company had to
endure lawsuits from television networks for
copyright infringements and then four years of
losses totalling around $ 500 million before
YouTube finally turned a profit last year.
" Very few companies would put up with all the
lawsuits that YouTube was attracting ," said Ken
Auletta, a technology journalist and the author
of the book Googled - the End of the World as
We Know It . "No one is going to contain
( founders) Larry Page and Sergey Brin 's belief
that you got to try things."
However, many have pointed to Google 's
seemingly kooky projects as evidence the
company lacks focus .
Ian Lurie , president of the market research
company Portent Interactive and longtime
Google observer, said he believes the company
has spread itself too thin . He said the Chrome
operating system , which is supposed to be an
alternative to Windows, is a bad idea.
" I think Chrome (operating system ) is a huge
mistake on their part ," Lurie said. " They're not
an operating system company. They should
never become one. Their goal should be to have
their search engine accessible from as many
operating systems as possible . The Chrome
browser is another example . It 's a great
browser , but I 'm not exactly sure how it helps
Google . "
He said Google should keep its eye on its cash
cow , which is search. Otherwise it risks losing
ground .
The company takes issue with that criticism.
Though no one at Google was made available to
speak to The Gazette for this article , Chris
O 'Neill , country manager for Google Canada ,
answered questions by email. He said the
company will remain what many would call
unfocused .
" At the end of the day , you just have to take
risks ," he wrote . "Some work , some don 't , but
the willingness to make those bets is what
makes Google unique. And the insights we take
from our failures are often put to work in the
next high - risk, high- reward opportunity that
comes our way. "
Christian Russell , longtime Google observer and
founder of the web marketing company
Dangerous Tactics , says he likes Google 's
strategy .
" They take the record company approach to
marketing and innovation ," he said . "If you run a
record company , you just know that 19 out of
20 records are going to flop , but when you do
get a hit , it makes up for all the failures. They
take that approach to innovation. "
In 2010 , some of those risks didn 't pay off , and
had very public failures. Last February , Google
came out with a social networking tool attached
to its popular Gmail service called Buzz . The
product was highly criticized by many for
publicly revealing all of the email contacts of
users, and other privacy concerns . It was a
monumental flop .
Buzz represented the third failed attempt for
Google in the social networking space . Google
Wave was killed off last August after it was
introduced a year before and never gained
traction . Google has had some success with its
social networking site called Orkut , which was
launched in 2004 at around the same time as
Facebook and was at one time was the most
popular networking site in Brazil, but that
success appears to be waning as Orkut is now
shedding market share to Facebook . Google also
tried and failed to start a group discount site by
bidding $ 6 billion to buy the popular site
Groupon , which uses social networking tools to
spread the word about daily deals . That offer
was rejected .
Last year was also a difficult year for the
company 's image . Google was blasted by
privacy watchdogs around the world , both for
the concerns raised by Buzz , and because it
came to light that the company collected
potentially sensitive information from those
using unprotected wireless networks all over the
world where its Google Street View cars drove
around cities taking photographs .
Despite the failures, the company's profits grew
23 per cent but its stock only grew by 13 per
cent - a disappointing result for some investors.
Observers say Google is losing its dominance in
the web space to Facebook - which last year
surpassed it to become the most visited website.
Facebook also served up more display ads than
either Google or Yahoo !
" With the social network movement , people are
now finding new ways to get information online
that doesn't require Googling it ," Goldman said .
" Now , if you want to find a restaurant or a good
book , you'll ask your friends on Facebook. "
Marketers are now saying it 's no longer just
enough to advertise on Google . Facebook has
also become an important tool . Google allows
advertisers to target those who key in certain
search words ; Facebook allows them to pinpoint
a specific demographic , right down to the age ,
gender , income range , profession , and interests .
While Facebook's revenues from advertising are
still a fraction of what Google collects , the
company is making inroads . Facebook also
offers advertisers the possibility to reach out to
their customers , not just through ads, but by
interacting with them by creating Facebook
pages with pictures, and videos , or by holding
online contests , all of which cost very little to
produce , but could go viral in a short amount of
time .
Recently, Facebook added another tool to its war
chest with the launch of a product called Deals ,
which allows users to post their locations to
their profiles , for all to see . Deals allows
Facebook users to get discounts
from participating businesses , just by telling
their friends where they are.
Auletta said Facebook has only recently started
monetizing its site, and as it grows, it will
continue to eat advertising dollars away from
Google .
Taken farther , social networking sites could offer
much better information than what you can get
merely by entering in a search term into
Google ' s query box , Auletta said.
" You can have another type of search that just
consists of experts ," Auletta said. "You could ask
your questions to the experts and get just a few
answers instead of getting millions of options
from Google that you don 't have time to sort
through . "
Auletta said another reason that Facebook , and
now even Apple , with its focus on phone and
iPad applications , are threats is that they create
what are being called walled communities ,
much like AOL in the early days of the Internet ,
where people can find everything they need
within the confines of Facebook, or through the
applications they download . That essentially
privatizes the web and makes a search engine
like Google - whose goal is to make sense of the
open web universe - less relevant .
Google ' s other problem is that some of the
company 's best and brightest engineers have
been flocking to other tech companies , including
Facebook , which will affect its ability to
innovate .
Google needs to develop new sources of
revenue in order to keep growing , Matthew
Ingram, a blogger for the technology website
Gigaom wrote recently .
" Google 's biggest problem is that it has
consistently failed to produce any new lines of
business apart from keyword - related
advertising , which still produces over 90 per
cent of its income, " Ingram wrote . "It 's true that
Google is making money from display
advertising , YouTube views, mobile , etc . But this
is (comparatively , at least ) peanuts . "
Venture capitalist Fred Wilson speculated in
Auletta' s book that the company has grown too
large to create meaningful new products .
" Maybe they can 't innovate anymore," he
speculated. " It takes them meetings and
processes to make decisions. Things don 't get
launched as quickly. "
Still that size could be an advantage . Google
devotes huge amounts of money to research
and development, and has an impressive ability
to develop new products , points out Christopher
Catapano , president of the strategic advising
company Bridgesphere .
" It has more cash flow to invest into research
and development ventures than any other
technology company . "
However, there is evidence that even Google 's
core strength - search - is slipping in the face of
new competitors .
The company recently came under fire for
allowing content - farming companies like
eHow .comand about. comto rise to the top of
search selections . In response , Matt Cutts , the
head of the company 's web spam team recently
announced the company altered its search
algorithm to give low quality sites less priority ,
but did not ban those sites from its search
results, as up - and - coming search directory
Blekko had already done .
" I think they have taken their eye off their
primary business ," Lurie said. "They have fallen a
little behind on spam, and you can really see in
the last nine to 12 months , they have really
started slipping in terms of keeping that stuff out
of their rankings. "
If the company loses its status as the top place
to go for information on the web, its downfall
could be quick, observers say.
While Google 's brand is strong now , most
observers agree it could weaken in a hurry if a
significantly better search engine came along.
Unlike Apple or Facebook, Google 's vulnerability
is the finicky nature of web searchers who
demand the most relevant results and will
switch on a whim . Google doesn' t seem to have
the same aura enjoyed by rivals Apple and
Facebook . Apple users wait in line for days to get
the latest products , and Facebook users
obsessively update their status . Google by
contrast , is merely a tool used to get to other
places on the web.
" There is no doubt people would cut and run if
something better came along, but there would
have to be a big difference ," Lurie said . "And it 's
only a matter of time before that happens .
Someone somewhere is going to make a big
leap in ranking of content on the web. It 's going
to happen eventually ; there 's almost no way
around it . Then the only question is whether
Google buys them before they get a chance to
take over . "
For now , Google appears to have a stranglehold
on the search market. Although its closest
competitor , Bing , consistently gains market
share, most of that has come from the third-
largest engine , Yahoo !
Martin- Luc Archambault , the
chief operating officer of Montrealbased Wajam
- a social extension to search engines - said he
believes Google will remain king in search for the
time being.
" There is some evidence that the results from
Bing are sometimes better," Archambault said .
" But I think something will have to be
exponentially better for people to switch . It will
have to be as big a difference as what Google
offered when it first came on the scene . "
Google appears to be adjusting its corporate
structure to better address its numerous threats .
In its annual earnings report last month, the
company announced that CEO Eric Schmidt
would be changing jobs , replaced by co- founder
Page , who is seen as a visionary . Co- founder
Brin was said to be in charge of social , and
Google is expected to come out with yet another
answer to Facebook later this year .
At the same time , Facebook is expected to
invade Google 's territory by releasing a search
engine on its site sometime this year .
One bright spot on the horizon is Google 's
mobile operating system Android , which it
purchased in 2005 . Google has licensed the
software for free to any cellular phone company
to allow them to make a smartphone that can
compete with the Apple iPhone. The results have
been impressive . In less than two years since it
was launched, Android surpassed Apple to
become the second - best selling smartphone ,
after sales surged 900 per cent last year .
Android is also the key operating system for
numerous new tablets that have hit the market
in recent months. The smartphone and tablet
market are huge growth potentials for Google ,
as they' re poised to become the dominant way
people access the Internet . Even though the
company has given Android away for free , it
takes a cut of the profits of those who develop
applications for the operating system . Because
it 's free to use Google software to develop an
application and free to list it on the Android
market, phone application developers have
flocked to Google , and it currently has 130 ,000
applications to Apple 's 300 ,000 .
Auletta said Google 's core products of search,
Android and the Chrome operating system will
lead to huge growth for the company in the
future . He said he believes despite the
company 's potential , it will have to figure out
what its limitations are and focus on its core
strength .
He said the company figured since it sold online
ads, it could branch out into selling ads for radio
stations and newspapers , but those ventures
failed.
" They also tried to get into social networking
and failed, so they 're not impregnable, " Auletta
said .
Goldman said he believes there is no limit to
Google ' s growth. He believes the company will
figure out how to bring a social context to
searches , and can have success in virtually every
product it develops . He sees the company as
becoming an all - encompassing life tool , that will
power everything from televisions to computers,
phones and cars .
" Google has the advantage of having 5 million
advertisers behind it , so it can go into pretty
much any market it wants and find a way to
monetize it with its slew of advertisers ," he said .
Others said that Google 's fate could follow that
of Microsoft, as a once - great company that has
lost its capacity for meaningful innovation
because of its sheer size.
Finally , there is always the possibility that the
company could disappear entirely , though most
observers agreed that' s unlikely .
" If they lose relevancy , they 'll lose everything ,"
Russell said. " It 's really easy to think you're
invincible if you build this massive company
almost overnight, but anyone and everyone is
subject to a fall in the digital economy , and as
quickly as you can rise , you can also disappear . "
(Source: TheGazzeteMobile)

Ad focus shifts to technology and design The “world ’ s cheapest car ” label may have done more harm than good to the Nano image . That at least is the view of the creative agency for the car , Rediffusion Y &R . Tata Motors seems to be in agreement , for it is going along with the new campaign, though it says that the idea was never to play up the cheap price .

As a consequence of the realisation , the Tata Nano story is being retold . The new ad campaign has dropped its “ world ’ s cheapest car ” USP ; instead , it marks a shift in proposition from “ what you’ ll have to pay ” for a Nano to “what you will get ” from it . The new campaign underscores that it is a

comfortable car for Indian families with world - class technology and innovative designing.

Clearly , the attempt is to allay apprehensions surrounding the car ’ s safety and durability .

A top executive of Rediffusion Y &R , who did not wish to be identified , explained: “ The earlier media hype around the Nano positioning it as the Rs 1 lakh car has done more harm than good to the brand . The emphasis on the car being cheap has somehow portrayed the otherwise loaded product as a compromised solution. It has somehow signalled that it ’ s a car for people who are little disadvantaged, don ’ t have enough money to buy an expensive car .

This has taken away the pleasure of owning a Nano to some extent . ” The Tata Nano spokesperson, asked if it was a mistake to promote the car as the cheapest in the world , said, “ We never positioned ourselves as the Rs 1 lakh car . This has been created by the word of mouth . Our positioning is that of a comfortable car for Indian families and our marketing campaigns stand by it . ”

So if it ’ s not the innovative price point , what will brand Nano capitalise on from now on ? According to the advertising executive , brand Nano will now be built on its technological prowess and its acknowledgement on the global platform. “ There are several untold stories about the Nano other than its pricing that can be explored — like the number of awards it won globally, its design , technology, space use . He said his agency was in talks with Tata Motors to build on the brand as a mark of innovation , as the face of new India . Though the brand has so far stayed away from traditional media and depended solely on the word of mouth and unconventional ways to propagate itself, it now plans to go whole hog on TV, followed by print . The brand has allotted Rs 15 - 20 crore for the exercise to be conducted over the next three months.

After the December ad splash , three more TV campaigns will appear in coming weeks to reposition the Nano . Did the absence of communication when the debate raged hurt the brand ? The Tata Motors spokesperson would not admit to any delay. “We wanted to launch the full - fledged marketing campaign only after capacity and distribution issues were fully taken care of . ”

The new campaign is being watched keenly for its efficacy by brand watchers . Santosh Desai , CEO of Future Brands , said, “ The brand seems to have rested for quite sometime on the laurels of the tremendous public relations it got at its launch. This created a vacuum in the market and anxiety among consumers about the product.

Not reassuring the market and not being present enough did affect its sales . High time the focus was shifted from price to other positive aspects. ” Agreed Harish Bijoor , another brand consultant ,

“In the case of a car brand , aspects like functionality, price and size will always be there .

That is not what needs to be touted while marketing the product. It ’ s always better to go in for an emotional , rather than a functional, tag . I believe the company must have realised that its focus on functionality has not been delivering well. That ’ s why the new strategy . ”

(source- mydigitalfc)

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Thursday, January 6, 2011

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