On the Google drip

Yesterday I have talked about how installing and maintaining isolated online shops creates an enormous amount of complexity that, in the long term, smaller merchants won’t be able to handle. The other part of the story is that most of these shops almost exclusively rely on Google as the traffic bringer. Be it organic search results or effective SEM, these shops are on the drip of the world’s biggest search engine.

If a shopowner has more or less successfully gone through the process of setting up his online store, he is then faced with the question of how to get traffic to his new digital branch. This, at the latest, is the time when magic three letter combinations become important: SEO and SEM. While the first, although steadily losing importance, still has a kind of wild-west ring to it, the latter often involves investing a big pile of cash to buy advertisements and thus traffic from Google. If all goes according to plan, the traffic can be converted into revenue, and if the calculations are correct, profit can be made from these customers. Nothing especially interesting or revolutionary here.

Let’s have a look at other sources of traffic and leave the seach superstar from Mountain View out of the equation. First of all, there are direct entries: If people know the shop’s URL and surf directly to it, no intermediate is needed. Having enough people know this URL, secondly, means making a critical mass of users aware of one’s shop by means of via newsletters, mailings or classic forms of advertising such as banners and printed ads. There is also word-of-mouth, maybe supported by social networks, and of course, there are other search engines such as Bing and Yahoo! which still hold a minuscule market share in Europe.

You don’t need to have extraordinary marketing knowledge or calculation skills to realise: Marketing your commerce site without accounting for Google in one way or another is almost impossible. This is very true for mainstream products, a few verticals and niches might be an exception. Users rely on Google to transport them to the products they are looking for, business owners rely on Google to bring them a constant stream of visitors inclined to buy their products. If Google fails – either it does not deliver relevant search results for the former or offer a terrible ranking to the latter – both have a problem. Google has become a single-point-of-failure in marketing. Imagine a physical shopping mall with lots of small retail stores in it, and an entrance that is guarded by a huge, muscular bouncer. If he decides not to let people in or send them elsewhere, the stores will soon be out of business. There’s no complaining, no pleading, no jurisdiction – this guy singlehandely decides if and where business will happen.

Over the last couple of years, Google has built a massive presence. In order to support their business model – selling advertisements that is – they keep updating their search algorithms, offer all sorts of services for “free” (of course they are not for free, users pay with their data, their behaviour, their attention which Google uses then to further optimise their business) to make everybody use it and thus have an attractive sales proposition for potential advertisers. In this respect, Google is a one-trick-pony and will do nothing that would harm its business model, which is the reason why they try to keep shop-owners happy and work on providing good results for those willing to pour their cash into the Google ad machine.

But: Google is not stupid. Especially since Larry Page has taken over as CEO almost a year ago, we can see a shift in its business model. Google used to make its money by being the gatekeeper, earning money in the process: People search, find what they are looking for, and leave. As the example of Google+ shows, the company is increasingly interested in keeping people engaged on the platform, collecting useful data in the process. This increasing stickiness has also been described by my colleague Alex in Hey e-tailers, here is how Google will eat your eBook lunch and Hey flight comparison sites, here is how Google will eat your lunch: There are areas in which it seems to be more profitable for Google to collect the cash directly rather than leave the business to the advertisers.

So, what does this mean for shop-owners? The more your business model supports and stimulates alternative traffic-streams and recognised the increasing value of clever CRM, the more likely it will be successful in the long run, even if Google should decide to change the rules of the game. Who wants to be on the drip longer than necessary, anyway?

(Image by hirotomo)

About Roman Zenner
Ich bin ich

One Response to On the Google drip

  1. Toni Anicic says:

    Hi Roman,

    Some very nice points raised here. I think most of the services that monetize information distribution will at one point be evaded by Google. I don’t think they will ever go into physical products, but if you’re dealing with anything virtual, it’s just a matter of time when Google will try to eat your lunch.

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