Comments on: Google Spends a Bundle on Ads — But Why?

By: JB

JB — Tue, 27 Apr 2010 00:39:36 +0000

Remarketing, one of Google’s newest strategies – that you briefly mentioned -- can be very effective in driving sales. The strategy focuses on visitors who left your site without generating a lead or purchase. So, a portion of your ad spending focuses on those who are currently interested in your product. Sometimes that extra nudge at a critical point in the buying phase can be quite beneficial. Here’s an interesting case study on how effective retargeting can be.

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By: Navendu Sharma

Navendu Sharma — Mon, 19 Apr 2010 15:42:44 +0000

Well I agree with the Post about google spending more on advertising because they have long term threats from sites like facebook etc also there initiatives are not doing good in the market you take chrome, nexus. So be the market leader in the field of search as well in other areas it has to market itself. Also they need to come up with new applications and social networking sites. In next couple of years Facebook would be the leader in online advertising than google.

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By: Venkatesh

Venkatesh — Sun, 18 Apr 2010 22:16:32 +0000

Check if they are lumping the cost of android into marketing budget. The companies do that to hide the actual cost of the program.

By: ANC

ANC — Sun, 18 Apr 2010 18:22:53 +0000

Your facts are wrong, and your logic is flawed. As another commenter already pointed out, you’re incorrectly assuming that the $2B in “sales and marketing expenses” is all going to ads, which is not the case at all if you read more closely.

“What’s more, marketing an ad-driven company has an absurd Ponzi scheme logic to it, a kind of media usury where ad revenue is spun out of ad revenue.”

So essentially, you’re saying that a company that makes money from ads shouldn’t advertise. Following that logic, a car company should never buy cars, a power company should never use power, and a television network should never advertise its own shows. That is absurd. Most companies have some use for advertising, and Google is no exception.

Also, a previous commenter suggested that Chrome’s market share is low and not growing fast. That’s inaccurate as well. By many market share measurements, Chrome surpassed Safari as the #3 most used browser in about a year and its market share continues to grow rapidly (see http://www.mattcutts.com/blog/chrome-market-share-sept-2009/ for details and links to other numbers).

By: Rainier Seidel

Rainier Seidel — Sun, 18 Apr 2010 17:55:30 +0000

Excellent post. I think Google has become the evil monopoly it did not want to be. Advertising is a way of countering the reality of being evil.

As with Microsoft in the desktop era, it is now impossible to develop an application in or around the Google ecosystem. If you get traffic from Google, they will "de-index" you as you grow. If you get ads from them, they will close your account as you grow. It is because search is valuable only in a fragmented ecosystem.

By: Michael

Michael — Sun, 18 Apr 2010 14:39:28 +0000

Yahoo is shutting down their small publishers ad network. Most of the advertisers and publishers are being referred to Chitika. (http://www.chitika.com) While Google is the monster ad machine, there are still other alternatives.

By: YUvamani

YUvamani — Sun, 18 Apr 2010 07:30:33 +0000

one word answer to your question: "bing"

By: Brian S Hall

Brian S Hall — Sun, 18 Apr 2010 03:49:55 +0000

Thanks, A S. You gave me a new post. I thought about your response and realized...I almost never use Google for search. On rare occasions, I do. And I use "Google" all the time (YouTube, Voice, gmail, Adwords). But rarely anymore for search.

No wonder Google's spending all that money on advertising!