MIS 301

INTRODUCTION TO INFORMATION TECHNOLOGY MANAGEMENT

GOOGLE

Most Valuable Global Brands 2006?

Google ranked 24th in 2006 Apple ranked 49th

and just 5 years later in 2011?

Google = Miracle
Founded in September 4, 1998 IPO (initial public offering) on August 19, 2004 Market Cap yesterday: $188.87 Billion Sergey Brin & Larry Page, each with personal wealth $19.8 billion as of 2011 (both ranked #24 in the Forbes Worlds Billionaire List) Mission: to organize the world's information and make it universally accessible and useful

(unofficial) Motto: Dont be evil

U.S. Advertising Spending (by selected media)

Online Ads represents the only advertising category trending with positive growth
_____________________________

Ranked 2nd overall in spending

4th 3rd 3rd 3rd 2nd

Internet Ranking

Internet Ad Spending
Internet ad spending is on the rise Paid search dominates Internet ad spending
Paid Search

Googles 2009 revenues over $23 BILLION!

Google VALUE
Googles market capitalization (a.k.a. market cap) makes it most valuable media company on the planet
Market capitalization (market cap): Firm value = share price X number of shares

Shows how quickly and deeply technologyfueled market disruptions can occur

Google Is The Search King

Google dominant search provider for now! Microsofts BING! on the rise Mobile advertising is still young;
Can Google continue its dominance?

Understanding Search
Query: Search Organic or natural search: Search engine results returned and ranked according to relevance Search engines use different algorithms to determine the order of organic search results; Google method called PageRank
PageRank: Algorithm developed by Google cofounder Larry Page to rank Web sites A site with more pages linking to them are ranked higher

Search: Used Toyotas

Natural Results Sponsored LocalPageRank Organic Links Results Ads

Making it to the top of the list

SEO: Search Engine Optimization
The process of improving a pages organic search results

Critical for an organization to be at the top of the search results! Can we fool PageRank with fake site links?
This is call link fraud

Google actively works to find and shut down these types of efforts

How Google Search Works

http://www.youtube.com/watch?v=BNHR6IQJGZs

How Does Google Work?

It doesnt search the web. It searches a database Spiders crawl the Web, reading Web pages and reporting back to Googles databases You can also submit your site to search engine for indexing Search terms are matched against the database using a proprietary algorithm

Site information is read from the Web site by spiders

This requires a whole bunch of servers in many server farms! An estimated 1.4 million as of 2008

Three Drivers Behind Increased Online Ad Spending

1. Increasing user time online 2. Improved measurement & accountability
3. Targeting

Googles trick is matchmaking --- matching advertisers to right audience

Secret of Googles success
Pull (instead of Push) Advertising Pricing Method (CPC instead of CPM) Selling Strategy (Auction instead of fixed prices) Ad Networks (AdSense)

Trackability
Unlike magazines and TV, Internet ads can be tracked instantly Online tools allow advertisers to calculate ROI, test creativity, and adjust ads quickly Tools allow you to see performance of site by region, category, date, and other criteria
Take a tour of Google Analytics!
http://www.google.com/analytics/tour.html

Trendspotting with Google

Google lets you see aggregate trends in what users search for, which yields powerful insights Allow anyone to explore search trends; breaking out the analysis by region, date, and other criteria

http://www.google.com/trends

Traditional Display Ads

Pop-up or Banner ad
Pop-up ad: an ad that displays in a new browser window Banner ad: an ad that is embedded into a web page

Kind of mass advertising

Whats the problem with traditional display Ad

Low Mortgage rates

Unmatched Audience

A way

of pushing

Context Based, Targeted Marketing

Dog food!

More valuable audience

A way

of pulling

IP Addresses and Geotargeting

Geotargeting: Identifying a users physical location for purpose of delivering tailored ads or other content IP Address: A value used to identify a device that is connected to the Internet

You only pay if they click on it!!

Cost per thousand (CPM): Advertiser pays
for every thousand times an ad is displayed
Magazine advertising paid for this way

Cost per action (CPA): Advertiser pays each

time a person does something (sale, lead, etc.)
Car Insurance Quote

Cost per click (CPC): Advertiser pays

each time a Web site visitor clicks on an ad
Google charges this way

Top 20 Most Expensive Keywords

1. Insurance (auto insurance price quotes) 2. Loans (consolidate student loans) 3. Mortgage (refinanced second mortgages) 4. Attorney (personal injury attorney) 5. Credit (home equity line of credit) 6. Lawyer 7. Donate 8. Degree 9. Hosting 10. Claim 11. Conference Call 12. Trading 13. Software 14. Recovery 15. Transfer 16. Gas/Electricity 17. Classes 18. Rehab 19. Treatment 20. Cord Blood

[No surprise,]the most expensive keyword categories is clearly a result from people who, en masse, turn to the Web in search for help, whether its for financial, educational, professional services or medical aid. Robin Wauters, Tech Crunch
http://techcrunch.com/2011/07/18/most-expensive-google-adwords-keywords/

Pricing Method: From Page Impression To Click Through

Based on Click Through

Payment based the number of click-through Less risky for advertisers

Selling Strategy: From Fixed Price To Auction

Fixed Price
Price as labeled One price for one product/service

Selling Strategy: From Fixed Price To Auction

Advertisers specify the maximum CPC they are willing to pay The rank of ads based on both maximum CPC and the quality of advertisers web pages Actually pay just one cent more than the second highest bid

Googles Ad Network

Where else can Google sell ads?

YouTube, like Google, starts with meager beginnings & grows quickly Now a large, influential business that people make their living off of with monetizing channels A costly business but potential $$ maker now for Google

If you have lots of YT views

Dear xxxxxxxxx,

Google may cut you in on the action

Privacy Concerns
Online ads are tied to the content of your incoming email.

Free services like Gmail offer great convenience, but some fear that Google may know too much!
Does this make Google+ more or less exciting to join?

What else to Google want to own?

Profiling and Privacy

Googles steps to protect user privacy
Wont link query history or registration data to ads

Refuses to link registration data with tracking cookies

Placed significant control in the hands of users
Googles Ads Preferences Manager allows surfers to see, remove, and add to, any of the categorizations that Google has assigned to that browsers tracking cookies

Allows users to install a cookie or plug-in that opts them out of interest-based tracking
Opt-out: Programs that enroll all customer by default, but allow consumers to discontinue participation if they want to
Plug-in: Small computer program that extends the feature set or capabilities of another application

Strategic Issues
Google leads in search/ads and offers unmatched network reach Strong BRAND
BUT switching costs for search LOW

Defeating Google with some sort of technical advantage will be difficult, since Web-based innovation can often be quickly imitated

What About Siri? Is SEO Dead?

Current Search Engine Optimization strategies may need to change. Siri and other apps will
Bypass search altogether Put emphasis on local Make pay-per-click advertising irrelevant May change the social media marketing landscape
http://www.youtube.com/watch?v=MpjpVAB06O4 http://www.inc.com/jeff-haden/siri-and-the-end-of-seo-as-we-know-it.html

Cross-sided Market

end users Advertiser

Google enters every market it could potentially place ads: Google Map, Google Earth, Google Book, Google Mars(?) Switching cost of Google users are LOW --- so Google needs to please users with continuous innovation To exploit cross-sided network effect, the platform needs to have very good matching mechanisms

Ad Network partners

Comparison of ~Five Years of Stock Price Change Google (GOOG) versus Microsoft (MSFT)

14-42

Key Terms
natural search paid search spider/bot page rank SEO CPC CTR CPM CPO/CPA ad network cookie click fraud behavioral targeting Link fraud

Appendix

Googles Products/Services

http://www.google.com/intl/en/about/products/

Example: Google Voice

http://www.youtube.com/watch?v=m4Q9MJdT5Ds

Customer Profiling and Behavioral Targeting

Communication between Web browser and Web server can identify:
IP address Type of browser Computer type Computer operating system

Customer Profiling & Behavioral Targeting

IP address can indicate a browsers employer or university, which can be further matched with information such as firm size or industry Ability to identify a surfers computer, browser, or OS can be used to target tech ads Greatest personalization and targeting comes from cookies
Cookies: line of identifying text, assigned and retrieved by a Web server and stored by your browser

Customer Profiling and Behavioral Targeting

IP targeting cant reliably identify individual users, as users are regularly assigned different IP addresses when they connect and disconnect from various physical and wi-fi networks
Cookies assigned by browsers, associated with a log-in account profile on that computer
Problem if several people use same browser on same computer without logging on as separate users

Cookies
Small text files placed on your computer by Web sites you visit Can help personalize a page, target ads, or monitor traffic Cookies are not executable, so they cant replicate and are not viruses However, due to browser mechanism to set and read cookies, can be used as spyware

But What if I Dont Want a Cookie!

Most popular Web browsers allow you to block all cookies, block just third-party cookies, purge your cookie file, or even ask for your approval before accepting a cookie

If you block cookies, you block any benefits that come along with them, and some Web site features may require cookies to work properly Deleting a cookie breaks a link between your browser and that Web site
However, if you supply identifying information in the future, the site might be able to assign your old profile data to the new cookie

Click Fraud
When stakes are high and an opportunity to cheat arises, some will take it! With billions of dollars at stake, some are tempted to find ways to cheat the system by registering false clicks Ad companies are constantly finding ways to prevent fraud

IP address tracking can be used to help ensure theres not more than one click per computer.

Search Engines, Ad Networks, and Fraud

Common types of fraud attempted in online advertising include
Enriching click fraud Enriching impression fraud Depleting click fraud Depleting impression fraud Rank-based impression fraud Disbarring fraud Link fraud Keyword stuffing

Busting the Bad Guys

Lots of clicks from a single IP make bad guys easy to spot

Click farms: Recruiting a network of users to engage in click fraud with the goal of spreading IP addresses across several systems to make a fraud effort more difficult to detect
Zombie networks: clickbots or bot nets hordes of surreptitiously infiltrated computers, linked and controlled remotely
Used to perpetrate click fraud and other computer security crimes

Busting the Bad Guys

Search firm and ad network software use data patterns and other signals to ferret out other fraud types:
Rank-based impression fraud Spamdexing Keyword stuffing

Spamdexing - a number of methods, such as repeating unrelated phrases, to manipulate relevance of resources indexed by a search engine