Californian search engine Google has become a byword for search.
It is now even a verb. Miles ahead of its rivals, it attracts users in droves - 65 million in the US alone - and is the main starting point for an untold number of online journeys. But, this dominance puts the company in a commanding position and, like the apple-growers and Tesco, some grumbles are emerging about the level of Google's power and what this means for suppliers - in this case, advertisers.
Amanda Jones, head of search at i-level, whose clients have included BT and Interflora, comments: "As heavyweight media-owners, MSN and Yahoo! have learned a lot about how to service their advertisers (direct or via agencies) to stimulate investment growth. In contrast, Google has a less service-led culture. Google always likes to remind us that it is a technology company - that can make it difficult to work with." The mentality among the major, paid-search providers is "you need us more than we need you", she adds.
"You can't ignore Google, so you have to play by its rules," says Richard Collins, chief executive officer at mSearch.
"So, I'm hoping that we are going to see more customer service. It currently has approaching half the market share in the UK. If that gets diluted to a third, it would be better for the market. The customer service on a local basis is fine, but when you are doing campaigns and a new rule comes out of Google central, there is no communication. Often, you and the advertiser are the last to know. And we spend millions of pounds with them each year - we are not a small customer," he adds.
Google, however, fervently denies the implication of such murmurings and that it is failing to look after its advertisers as well as its users.
Kate Burns, managing director of UK advertising sales at Google, says the company's commitment to advertisers is not just about its tools and features but support too. Along with online sales support, she says the UK sales team, which was set up four years ago, is dedicated to providing a great service to advertisers in the UK.
Google is constantly enhancing AdWords, says Burns; aiming to increase ROI for advertisers and make the system easier to use. She cites tools that facilitate the editing of ad text and other cross-campaign tools that aim to make things easier. "We recently announced AdWords API - a free AdWords feature (currently in beta) that lets developers create computer programs to interact direct with the AdWords server," she says.
"With the programmes developed, advertisers can manage AdWords accounts and campaigns more efficiently, enable new business processes, and use AdWords more efficiently through direct integration with their own systems. AdWords API reflects Google's commitment to innovation and enhancing the value of its advertising programme," she adds.
But, any perception that the firm fails to handle advertisers effectively is being placed in a new light with the emergence of new competition.
Few companies have the technical know-how and sheer scale to take on Google, but Microsoft does. At its annual advertising and marketing summit in March, MSN gave a preview of a prototype of MSN adCenter, its online ad platform. At its heart is a paid-search service that E will be piloted in France and Singapore before a global rollout next year. It follows the launch of MSN's own search engine in January - part of a $100 million (拢53m) investment - and it has made clear it wants a greater share of search revenue (Revolution, September 2004, p30). The new MSN paid-search service will aim to give keyword buyers in-depth audience intelligence - including geographic location, gender, age group, lifestyle segment and time of day. As a result, claims Yusuf Mehdi, head of MSN information services, advertisers should be able to plan more strategic advertising investments and achieve higher conversion rates.
MSN's intentions are clear: it wants to knock Google off its pedestal.
But, will its challenge dilute the search giant's power and will advertisers benefit? Many can't wait to find out.
"The MSN thing is a key milestone for the industry," reckons Collins at mSearch. "We have a lot to thank Google for. It made search what it is today. However, as it has become immensely successful and market dominating, there have been cases where it has sat back on its laurels a bit." He cites his own experience with client William Hill. When Google in the US decided to stop taking gambling ads, the bookmaking giant's search ads were turned off overnight without discussion. Google is unable to comment on the issue (or "will not").
Paul Carysforth, campaign manager at Moonfish, believes Google has not made sufficient effort to understand the cultural differences between the US and UK market, where agencies have a stronger role. He feels the threshold for a managed account is far too high and deems it unacceptable when agencies are forced to communicate with Google only via email and then have to wait up to four working days for a reply, again via email.
Tough battle
The Search Works chief executive officer Nick Hynes, who founded PPC pioneer Overture in Europe, is not surprised by MSN's move. For five years at Overture, MSN was a client and, during that time, he recalls, it was clear the company was keen to move into search. Hynes considers it "excellent news" for the market. "Online marketing is still only a few percentage points of overall marketing budgets," he says. "For the internet space to move forward, it needs to attract more budget, and search is an incredibly powerful means of direct marketing. MSN will bring more legitimacy to the sector."
But Hynes expects a tough battle. Several former Netscape staff are at Google and everyone remembers how ruthlessly Microsoft crushed Netscape when it entered the browser market. He reckons the coming struggle is likely to be a bitter one.
Paul Silton, planner/buyer at Starcom Digital, works with clients like Cadburys and Honda, and thinks MSN Search will create more choice. "Advertisers will be looking to the search engine companies for a larger focus on added value, as well as services. That means widening the sphere of account management, such as providing trend-analysis on specific campaigns - which clients request, and take up a lot of the agency's time - as well as greater flexibility in administrative areas, such as action turnaround times and minimum campaign spends. At the moment it's a case of the market calling Google. The launch of MSN Search might just see Google calling the market."
And i-Level's Jones adds: "It will be interesting to see how Overture and Google's advertiser service levels will change once there is heightened competition."
How does Google feel about that? Burns again points to the increasing number of tools that it is releasing for advertisers. "Some of our other recent initiatives have included the introduction of regional targeting options, to enable advertisers in the UK to target by city, county or within a specific area," she notes. "Initiatives such as these are ideal for small businesses that want to reach a very defined area. By listening to the needs of advertisers in the search-marketing space, we have also been able to introduce better campaign-tracking and reporting tools, making them available at no extra cost to our customers. Our conversion-tracking tool provides advertisers with a better understanding of the ROI from their AdWords campaigns by correlating clicks that originate from AdWords ads to sales generated. By providing a tool that more accurately measures the performance of the ads delivered, Google and its advertisers will be able to improve the quality and relevance of ads."
Microsoft has a different strategy: MSN adCenter will enable advertisers to manage all their online campaigns, from display banners to search listings, in one place. Yet, the new platform will aim to provide control in a similar way to Google AdWords, where clickthrough rates are considered when displaying ads.
"Google has a powerful offering, due as much to its automated system as well as its dominance," reckons Graham Hansell, head of strategy at Sitelynx. "Testing and editorial issues are diminished, so search marketers can produce a range of tactical campaigns quickly and test. Response to both events, as well as results, is relatively easy to control. However, building large-scale, strategic campaigns needs assistance, above and beyond the standard toolset. If MSN has an equal or greater feature-set and automated listings, its offering could easily beat Overture (Yahoo!
Search Marketing Solutions) and really challenge Google," he adds.
Good reputation
So far, MSN has made good headway with its search engine, but it has a mighty opponent. "According to Nielsen, a US study shows 58 per cent of people who use Google also use another search engine; mostly Yahoo! or MSN," says Mike Rogers, managing director of Optimize Search Engine Marketing, which works with Yell and Toshiba. "That said, more than 70 per cent of those who use MSN also use another search engine, and the majority went to Google. So, while this provides Microsoft with a great opportunity to eat into Google's market share, it won't succeed unless it continuously strives to ensure that the relevancy and quality of MSN's search results get better and better.
"However, MSN has a good reputation among searchers. In a study by Keynote Systems in the US, last year MSN saw a 30 per cent increase in the number of people using MSN primarily, compared with a 20 per cent increase for Yahoo!," continues Rogers. "But, the MSN adCenter isn't likely to launch in the UK until the end of the year at the earliest, and is likely to be fully available worldwide by June 2006 when MSN's agreement with Yahoo! to show Overture ads will end. Last year, alone, it paid more than $500m (拢267m) to Yahoo! to show Overture ads - that's an incentive to develop its own search-advertising service, if ever there was one."
While much of the talk is of Google and MSN slugging it out, it should not be forgotten that there are other significant players, most obviously Yahoo! and eSpotting. The possible emergence of a fifth major player may have been signalled by the $1.85bn (拢980,000) purchase in March of Ask Jeeves by IAC/InterActive, the company controlled by former movie mogul Barry Diller.
And there are moves afoot elsewhere. Mark Milner, chief operating officer at Associated New Media, comments: "From our point of view, as a news company, the most interesting search acquisition of late has been the buyout of news aggregator Topix in the US by a consortium of Knight-Ridder, Tribune and Gannett. It has been widely hypothesised that Topix - having already put in place the screen-scraping and aggregation tools necessary to index news - is a handful of steps away from offering a viable general search engine to compete direct with Google or MSN. The combination of aggregation and localisation offers Topix buyers an obvious targeting advantage over the global networks," he adds.
The search sector continues to evolve fast and Google faces more challenges than ever. To remain in power, and continue to satisfy users and advertisers, it will need to stay on its toes.
MARKET BEHEMOTH
In the UK and Germany, Google is the undisputed king. Hitwise reports that, in February, Google's UK site had a 48 per cent share of UK search, miles ahead of nearest rivals MSN.co.uk Search (nine per cent) and Ask Jeeves (seven per cent).
Google also held fourth and fifth spot with its main Google.com URL, while its UK Image Wise (picture search) offer took another nine per cent of searches.
In the US, its market share is not quite so dominant but, according to Media Metrix, it has an astonishing 65 million users.
Google has become a part of everyday life for millions of people and a key partner for many marketers.
"Google is obsessed with the search experience it provides to both users and advertisers," reckons Kate Burns, managing director of UK ad sales at Google. "Relevance for users and ROI for advertisers is at the core of our advertising business, and we're constantly working on ways to deliver that to both parties." In its financial results, released on 1 February, Google announced record revenues of $1.032bn (拢0.55bn) for the quarter ending December 2004; an increase of 101 per cent year-on-year.
Google-owned web sites generated revenues of $530m (拢283m); 51 per cent of the total. Those generated on Google's partner sites, through AdSense, added $490m 拢262m); 48 per cent of the total.
Google claims the revenue growth reflects strong traffic and growth of monetisation in the quarter, as well as advertisers' burgeoning recognition of the web as an effective ad medium.
Some Google stats:
- Index size: more than eight billion web pages;
- Image search index: more than one billion images;
- Interface languages: 104;
- Domains: 113 (114, including Google.com);
- Toolbar: 21 languages;
- AdWords: 41 languages;
- AdSense: 16 languages;
- Employees: over 3,000.