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back to article Google shares surf ad-destroying mobile tsunami to RECORD HIGH

The shift to mobile gadgets is eating into advertising revenue worldwide – but that hasn't stopped ad giant Google reporting whopping sales of $14.89bn, driving its shares to a record high. The web advert-slinger today reported its earnings for the third quarter of 2013, and showed growth in key lines of its business. The …

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Is it worth it for the business

Has anyone ever seen any studies that show the effective ratios of Google AdWords cost vs increase in revenue ? Who truly makes money except for Google... If everyone is using Google Adwords then no-one really has any competitive advantage, excpet for the highest bidder, in which case it is Google that wins.

Google adwords quickly becomes a very expensive "requirement" for a business, especially when you are in a competitive market. ( Niche products are a different story, the adwords are much much cheaper).

I always wonder how many business actually use Google Adwords simply because they feel that it is a requirerment rather than a sound investment. Do any business's close down because they don't use Google ?

I don't like Google but I will give them credit for being very very successfull. I can't even begin to imagine what it would take to knock them of their pedestal..

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Re: Is it worth it for the business

"I don't like Google but I will give them credit for being very very successfull. I can't even begin to imagine what it would take to knock them of their pedestal.."

In the mobile world I can. To generate ever increasing earnings that US investors believe are their birthright, Google needs to become ever more intrusive and pushy. At the moment most people are relaxed about the balance between Google's push adverts, and the benefits of a "free" and pretty good phone OS. But all that needs to happen to change the world is that (a) a new, free or near free OS comes along (not today, but maybe one day Sailfish, Ubuntu, Firefox or something from far, far away) and offers equivalent functionality at a lower "cost", and (b) Google needs to over cook the afverts or personal data use. Neither of those are guaranteed, but neither are far-fetched.

Taking that a bit further, if I am the product, then perhaps the world is slowly changing and a bit of free software will no longer be sufficient price. Google would then have to cash subsidise their software, maybe even pay people monthly to use it. Sounds a lot more far fetched, and maybe there's a compromise, where they make real content available for free. So instead of paywalls, Google users get free access to news content, but WinPho or Apple users are barred (or need to install Google spyware on their platform). Likewise MS or Apple owned content. In some respects this might complete the digital publishing revolution - in the days of print, we effectively paid the physical costs of the publications, and the intellectual costs and margin came from advertising sales. With marginal distribution costs now negligible, the advertisers would give me the content for free in return for me receiving their adverts. A bit like the "free" commercial TV model, or Spotify "free". Not sure that their force fed commercials interrupting me are the future model (or I hope not), but I'd see more that Google would have the ability to feed me the ads much as they do now, but doing more for me (otherwise they offer an open goal to Firefox).

The other threat to Google is similar, but emerges as software agnostic phone makers. In which case the current crop of Android makers start to offer the same hardware with competing OS. Maybe you'd have to pay for an ad free OS, but there might well be a market. Google could threaten to withhold some aspects of Android despite it's nominal "open source", but the makers have the immediate option of WinPho.

Despite the pre-eminence of Android, there's no guarantee that they can exploit that customer base, given that the market is accustomed to changing handsets every two years.

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Re: Is it worth it for the business

For businesses who benefit from advertising, AdWords is a good additional tool to use. The catch is determining if a business can actually benefit from advertising. Many businesses aren't suitable for advertising due to their mission and some aren't suitable because they don't really have a business to begin with.

Advertising, online and traditional, isn't just getting people's attention, that's actually fairly easy to do; you've got to get the attention of your target customer. Once you've got their attention you've got to have a pleasing sales mechanism (store), a valuable education and sales process, a competitive product and a competitive price. If you don't have those things then paying to get someone to look at your offerings is a waste of resources. This is especially true for many smaller businesses who are retailing commodity goods. The customer can buy (x) from any number of other sources, what are you offering that can entice a customer to buy from you instead of a big name retailer? If it's only price you're doomed anyway, you've got to have something else.

Advertising of all types is incredibly effective if you've got a well built business behind it. Otherwise it's a fabulous way to run yourself out of business. Most businesses aren't well built and won't benefit from advertising because they don't understand that sales/revenue is the outcome of doing everything else right. If you put the cart before the horse and advertise at scale before you have a real business you've done nothing but spend a lot of money and permanently alienate customers.

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Boffin

It's difficult to spend Google-scale amounts of money on fundamental research

Sounds like someone should finance some fundamental research to figure out how to finance fundamental research. It'll be a recursive project and if you do it right it can eat all the available resources.

Seriously, they should experiment with decentralized financing of research / development. They could offer prices for independent researchers (kind of like buying-out only the ideas you like), they could offer grants for people coming forward with good ideas, or they could follow the classic approach and just buy out anybody who develops a successful little company.

In the end, successful research is all about giving people the freedom to try out their crazy ideas and then to identify the gems among them. Picking winners is difficult, hence the top-down approach will only work for incremental (obvious) research. The big question should be: how can Google lower the barrier for people to try out their ideas -- and how can Google profit if someone succeeds with the Next Big Thing.

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Re: It's difficult to spend Google-scale amounts of money on fundamental research

I'm willing to do research on how to spend large amounts of money....

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Happy

Re: It's difficult to spend Google-scale amounts of money on fundamental research

His point was that although there are lots of good ideas out there being researched and some of them might be 'the next big thing' they don't benefit Google's model at scale.

Part of being a huge public company is that you're limited in how you can invest your money. Shareholders won't stand for too much spending outside of things that don't benefit the current operation now. At Google's scale there really aren't many options, and that was his point.

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