How did Google get where they are?

by Rich Schiffer, REALTOR, e-PRO

(This article is part of a training series presented for real estate professionals, whether new to the industry or experienced, to help them discover, understand, and benefit from the tools that are available on-line.  For access to the full series, join the ActiveRain Technology Toolkit Training group.  If you have not yet joined the ActiveRain Real Estate Network, you may do so here.).

Google recognized the importance of providing what consumers want (information), when they want it (immediately), and how they want it (free). Then, Google created a business model that actually profits from providing a free service.

The genius behind Google's profit model is that they profit not because of the service they provide, but because of who they provide the service to.

Ultimately, Google has two products: Their on-line services, and the users of their on-line services. They give their on-line services to consumers free of charge. They profit by selling advertising space, just like magazines, newspapers, radio, and television. Merchants pay to have their message seen by Google's users, which estimates say are 50% to 90% of Internet users.

The "Google Shift"

In the days before the "Information Superhighway" of the Internet, to determine what segment of the population wanted your product, so that you could increase the effectiveness of your marketing efforts, you would have to hire a market research firm to conduct taste-tests, product trials, and consumer surveys. These are still valuable services for many types of products and services. But now, with the advent of on-line search engines, a shift has happened, bringing consumers and merchants together much earlier in the process than ever before.

It used to be that people would be sitting at home, in their car, at work, or wherever, and they would think to themselves, "Hmmm....I think I need a ____________." Then, they might or might not go out and actually buy it, but usually, some time would pass, and they might even forget about it altogether. Then, at some point, they might see a commercial, or a billboard, or even a display in a store, and think, "Oh, yeah. I really could use one of those." Still, they might or might not actually buy one. Then while looking at one on a shelf in the store, a friendly sales clerk, says, "May I help you, sir?" Now, they are finally interacting with someone that might be able to help bridge the gap between interest and purchase.

In today's world, consumers have largely shifted from that mode, and practically stand up and shout, "I want to buy a _____" or, "I am interested in _________." Whenever a consumer types a search phrase into an Internet search engine, they are putting themselves into a self-selected target market group. Countless "social networking" platforms exist where the consumers create a profile, complete with lists of their likes and dislikes, hobbies, occupations, and a wealth of other self-divulged personal information.

What the "Google Shift" has done is to enable merchants and service providers to identify potential customers much earlier in the process than ever before, and without expensive advertising campaigns to draw them into stores. Television advertising campaigns now have begun to reflect this shift as well, and have become more about supporting "brand awareness" and less about the products themselves.  As a result, the "incubation period" -- the period from first contact to closed sale may be much longer than it ever used to be.  This creates the need for service providers to develop additional core skills -- namely effective, follow-up and the ability to anticipate needs.  (A whole new class of software has been developed over the past 15 years or so to assist with that task: "CRM" or "Contact Relationship Management" software. -- Look for future articles on that topic)

On-line Marketing can be ultra-Personalized to the Consumer

By design, Internet search engines keep statistics on everything possible. By tracking the search habits of users, they are able to provide merchants with the opportunity to appear in front of very finely targeted groups. For example, an advertiser could produce an Internet ad, and pay to have it appear only on the screens of searchers that have searched for the term, "Luxury Homes" and also previously searched for the term, "Classic Car Storage."

Traditional retailers put "impulse items" near cash registers, so while you wait, you might be tempted to add that magazine or pack of gum into your cart. Some on-line shopping websites have gone a step farther, essentially putting a customized selection of products at the checkout to very effectively boost sales. At sites like amazon.com, before finalizing their order, shoppers will see something like, "Shoppers who bought the book you ordered often also ordered __________." This is a perfect example of the type of highly-targeted target marketing available with on-line marketing.

NEXT:  6 "Technology Tools" to tap into the effectiveness of Internet Marketing