This week’s business news has been a warm, welcome rain on the already-lush fields of Google’s PR and share prices. Yet Google’s well-fertilised search advertising business sparks questions for me that would benefit from (someone’s) research.
Google’s financial results for the last quarter of 2006 show that net earnings rose 67% on the same period one year earlier, to over one billion dollars (US). More buoyant news for Google: its nearest competitor, Yahoo, saw a drop in earnings of over 60% over the same period. Further, Google’s web traffic grew by 24% in 2006, now accounting for over half of all web searches (according to Nielson/Net).
Search is the single, fast-growing cash crop fuelling the web giant’s success. I’ve mentioned before my excellent experience with the level of service and expertise offered by Google in support of its Adsense and Adwords programs, and it is no wonder they are supporting those programs so well; they generate 99% of Google’s revenue.
Aside: If not for Google’s confidence-inspiring leadership in charting the direction of online commerce and the evolution of IT and the web, as a Google investor I would be a bit uncomfortable with its lack of diversity in profit sources. Google is relying solely on continued growth of online advertising and in its stranglehold on that business. Also, Google’s outstanding performance in its business sector still only represents $3.29 per share, with each share now valued around $500. Hmm.
Opportunity for research?
The exploding popularity – and profitability – of search advertising does seem to beg scrutiny. While this promotion tool shows promise from Google’s end, is it worthwhile for clients? I think clearly the general answer is “yes”, but certainly a lot of variability will exist within the overall success of search ads. For their part, Google does a good job of advising even the smallest clients on making search ads work: how to write appropriately, how to target audiences and so on. But Google will surely not advise any clients that their product category, business type or marketing strategy is ill-suited to search ads. So when is search the best – or worst – tool to add to a promotions mix? What additional tools need to be developed in order to make search ads worthwhile; for example: Is search closely tied to direct response campaigns? Is a well-honed online commerce system and delivery network correlated with search ads impacting positively on sales? Is search at all useful when brand-building is the objective? Does search work alone, or is it shown to be best as an element of a broader integrated campaign?
An idea for university research within coursework studies
The above questions seem like some good starting-points for marketing research projects. Considering this in the context of a course-based masters program (which I am working on now) it is difficult to imagine how any of these issues could be tackled as topics for small research papers. But for university educators, a more creative approach to class design could handle these questions well while providing students with a unique learning opportunity. For example: In a one-semester unit with about 20 students, a question could be posed to the class as a whole. For the first four lectures the background could be covered and a range of discrete reading assignments made to various students, these being reported back to the class. After gaining an educated perspective the instructor could facilitate a process identifying how the students could isolate a clear, defining question for the semester then break it down into a series of smaller, discrete research problems to be assigned to individuals or small groups. The completed research papers would stand individually for grading and would also comprise a greater whole addressing the main research question. The students’ collective work might even be assembled into a publishable article.
This concept would be demanding of an instructor. A well-organised facilitator with a facility for conceptual synthesis and a head for online marketing issues is called-for. With such a person in place a very rich learning environment could emerge, providing students with complex experience in collaborative research and perhaps even with publications to their credit.