Posts Tagged ‘Google’

Google’s Actions Betray Its Users and Its Brand

February 17th, 2012

“Google Inc. and other advertising companies have been bypassing the privacy settings of millions of people using Apple Inc.’s Web browser on their iPhones and computers—tracking the Web-browsing habits of people who intended for that kind of monitoring to be blocked.”

If you read that opening sentence from this Wall Street Journal article and had never heard of Google Inc. before, what would your impression of the company be?  Probably that it must be a sleazy, unethical, untrustworthy company with which you you never want to do business.

It’s been said that your brand isn’t defined by what you say but what you do.  If that’s true–and I think it is–then Google’s actions have put a significant dent in its brand equity.

This isn’t the first time Google has compromised its users’ privacy, and Facebook and others have been guilty of similar violations.  Perhaps the phenomenal success experienced by Google and Facebook has left their leaders feeling that they are someone immune from the ethical standards by which the rest of us play.  And, for the most part, their users do seem to have looked the other way rather taking these companies to task for their behavior.  I have to believe, however, that  sooner or later these serious ethical lapses are going to take a serious toll on the loyalty of their users and hence on the sky-high stock prices that Google and others command.

One of the many things Google does well is to creatively modify their logo to celebrate holidays and other special occasions.  I suggest that until they regain their ethical bearings, they modify their iconic “I feel lucky” tag to read “I feel violated.”

Is Groupon Overrated?

January 2nd, 2011


I realize that Groupon is officially the fastest-growing company of all time, that its members  (of which I am one) are raving fans, that its founders are scarily bright and innovative people, that Google reportedly recently offered to buy the company for $6 billion, and that Groupon’s owners felt that price was well below what the company is worth.  I also realize that I will probably look like a fool for saying the following:

I don’t think Groupon’s success is sustainable.

There–I said it.  And I might well be the only person on the planet to have said it.  But, in the event that you haven’t dismissed me as a small-thinking, shortsighted Luddite and surfed to a more coherent blog, here’s my reasoning:  I just don’t think that Groupon’s business model makes financial sense for enough of the businesses that use their services.

Most of these businesses offer savings of approximately 50% to Groupon members; whatever price the member pays, Groupon and the business split the proceeds 50/50.  Thus, if the product or service normally sells for $20, the member pays only $10 and Groupon and the business each take home $5.  In other words, the business’s take is one-quarter of what it normally makes.  If their gross margin is 50% (meaning that the cost of the product or service is $10), they’ve lost $5 on each and every sale.

The theory, of course, is that the business will gain so much exposure to new customers from the Groupon promotion that they’ll generate enough incremental profit in the long term to more than cover their promotional losses.  But is that theory valid?  If you try a new product or service, how likely are you to buy it again at double the price you just paid for it? I’d say the odds are pretty low, unless the product or service is dramatically superior to other options.  And let’s face it; most industries are populated by “me-too” competitors that rely more on low pricing than superior performance to induce customers to choose them over all other options.  As soon as a lower-priced alternative comes along, their fickle customer becomes a former customer.

Thus, other than for a truly one-of-a-kind product or service that will knock the socks off the people who try it, it’s hard for me to imagine that a Groupon promotion will lead to enough future sales at full price to offset the losses generated by all the sales done at the bargain-basement Groupon price.  If I’m right, the value of Groupon is a fraction of what virtually everyone else seems to think.

Of course, given that Groupon’s business model was surely vetted by the folks at Google–not to mention Groupon’s founders, investors and managers–it’s very possible that I’m missing something.  If anyone knows what that is, I’d love to hear from you.

Until then, consider me the original Groupon un-groupie.

Bing Needs to Search for Better Advertising

October 3rd, 2010

Over the years Microsoft has developed a well-earned reputation for being an exceptionally mediocre advertiser.  Even though its recent Windows 7 advertising represents an improvement over the company’s prior efforts (remember the embarrassing and mercifully short-lived effort starring Bill Gates and Jerry Seinfeld?), Microsoft advertising has generally exhibited microscopic amounts of creativity.

Microsoft’s Bing search engine appears to suffer from the same advertising affliction as its parent company.  Add this  TV commercial to the list of thousands of commercials you’ve seen repeatedly without knowing who the advertiser is or what the point of the ad is supposed to be.

I’m not exactly going out on a limb to say that an ad should reflect the character of the product or service being advertised.  One of the features that’s most important in a search engine is simplicity. So even if you’re smart and patient enough to decipher that this commercial is for a search engine, its convoluted and disconnected communications can only lead you to expect that you’d have anything but a user-friendly experience at www.bing.com. The truth is that Bing is actually a pretty good product–I use Bing Images all the time–but you’d never know it from its advertising.

Maybe it’s time for Microsoft to search for a new ad agency.  I’m sure they could find one using Google–or perhaps that other new search engine.  Oh, what’s its name again?  I think I just saw an ad for it…It’s right on the tip of my tongue…

Going Gaga over Google’s Super Bowl Ad

February 8th, 2010

I’ve never felt that advertising on the Super Bowl was a smart investment for most companies. One reason is that a significant percentage of the audience is watching the game in a party environment that makes it almost impossible to hear the ads. But in yesterday’s Super Bowl, one very smart company ran a very smart ad that virtually silently managed to tell a very engaging story while conducting an in-depth product demonstration. I’m talking about Google’s “Love Story” ad.

While so many Super Bowl ads are about simply entertaining or shocking the audience without saying or showing anything about the benefit of the product, this ad brilliantly gave the viewer a new appreciation for the amazing capabilities of Google Search. As I often say, great marketing is great story telling, and that’s exactly what this ad is.

What’s particularly impressive to me is the fact that Google is not an advertising-oriented company. Normally companies that have been successful without advertising struggle when they decide it’s time to advertise, but this clearly isn’t the case here.

There are many answers to the frequently-posed question “What would Google do?”, and now there’s a new one: great advertising!