Last week I spelled out some of Google’s problems -- from having too much of its revenue tied to one product, to having to facing a myriad of new competitors in the advertising space. Here are some possible solutions:
1. Get more clicks. Since advertisers are charged by the click, why not find ways to increase clicks on ads?
Over the past few years we’ve seen multiple tests to try to increase searcher click through rate on ads, including:
2. Raise minimum cost-per-click. Using Quality Score as a guide, Google sets a minimum cost-per-click for each keyword you advertise on. However, many advertisers report having increased minimum costs-per-click, even when no competition is present. In other words, even if your ad is the only one on the page, if searchers click on the organic results more, then your cost-per-click will likely increase.
How convenient for Google! Google’s reasoning is that quality score is a measure of the quality of your ad… but is it always? In the case where you are the only advertiser on a page, perhaps not. And because you can’t necessarily trust the quality score Google displays to advertisers, it would be easy for Google to manipulate minimum bid requirements to force advertisers to spend more per click.
3. Diversify. Google’s next step is to begin to expand its revenue stream beyond Google AdWords. With the birth of the Android platform and Google’s app marketplace, the company has created a whole new revenue stream for itself. Additionally, it’s looking into expanding into hardware devices, as evidenced by its purchase of Motorola Mobility and other opportunities, such as a home entertainment device. But those purchases and investments will take time to pay off.
With Google+, Google isn’t trying to become Facebook --it’s just trying to be a better advertising vehicle than Facebook, perhaps become the ultimate online advertising vehicle. By creating an environment to attract users via social content and applications, Google can further build up its knowledge about you. It can understand who your friends are, your personal demographic information, and more.
So will Google+ and all of Google’s other solutions to its business problem allow it to prevail and continue monumental growth? Time will tell. But one thing is for sure -- there’s no ONE Google-killer. But if these solutions don’t work, if the company doesn’t diversify revenue streams and adapt, Google could just kill itself.