Google is planning to dominate online purchasing. In the last few weeks we have seen several moves that, taken together, give a clear sense of how Google is intending to take money away from every network, every portal and every major competitor. Google no longer wants to be the "search" part of the buying funnel. It wants to be the buying funnel.
In less than a month Google has moved to massively increase its display ad offerings, make Google Product Search more compelling, and shut down a raft of distracting non-purchase oriented products (such as the ill-fated Google Wave) even while starting the Google+ social network. It is no coincidence that each of these moves fit neatly with emerging trend lines on where online money will be spent by consumers in the next several years.
Let’s review. Online shopping is growing like crazy. Last week we saw three consecutive days on which over $1 billion was spent online: three out of the four biggest spending days in history.
And one of the biggest drivers of this growth? Free or heavily discounted shipping.
This is a big move for Google because it provides them with a way to optimize e-commerce deliveries from a customer’s perspective and thus compete more directly with Amazon’s core competency, while at the same time providing more value to their own advertisers.
Now let’s look at the overall growth in online advertising. The IAB just released figures for Q3-2011 showing U.S. online ad spend up by 22% to $7.88 billion.
Simultaneously, Citi analysts report that search’s share of ad spend will have increased to 48% during 2011, at around $15 billion, while display ad revenues will be about $12 billion – an increase of 22%. That strength in the display ad marketplace is coming from online video, Facebook and Google’s own properties. They’re all taking share from portal-style properties which is why Yahoo and AOL are dying fast. Given that information what do we see Google doing? They’re getting deadly serious about putting display ads on their own massive user-base web properties. Imagine the bite of the display ad market that Google+, Gmail, Google Reader and even – whisper it quietly – Google.com might represent?
Google wants more of the e-commerce pie and the display ad pie.
Finally, consider Google’s launch of Google+. We already know from Facebook’s experience that social networks are incredible generators of traffic, and of social recommendations. Google, in its bid to dominate the total buying funnel needs to build its presence at the widest part, where people are doing initial research and seeking trusted advice.
If they can make Google+ a success then they will be well on their way. Google want to dominate the top of the buying funnel with Google+. The middle of the buying funnel with new display ads and with video, the intent to buy part with its existing search bar and finally the actual purchase itself with Google Product Search and its affiliate network. Google wants more pie.