The tough thing about being on top is that somebody below you is always trying to climb up to take your place. I bet that’s probably how Google feels this week. The once heralded king of Ad Words is facing some stiff competition from Amazon who’s decided it wants in on ad words. Meanwhile, Pinterest has news of its own: the top tier social platform will now offer marketers a much sought after analytics dashboard. While these may just seem like effectual changes for online platforms, typical of their presence and predictive of their need to grow, it’s actually telling us a whole lot more.
Amazon’s decidedly brilliant move is based on the fact that it already has a database with millions of customers to draw on. So rather than inventing a whole new leg of business, it’s leveraging information it already has to add another revenue stream and stiffly compete in a very narrow ad words marketplace currently estimated at $50 billion. Tom Ryan of Forbes, in an article titled “Amazon Muscles In On Google Ad Dollars,” writes how “Amazon expects to test its in-house ad placement platform, called Amazon Sponsored Links, later this year as the company replaces ads on its site that are largely supplied by Google.” The business model is a sound one. Why direct revenue to Google when you’ve already got an audience base and can traffic that revenue inward.
Ryan also quotes Razorfish VP of Commerce Strategy, Jason Goldberg, who calls it a “scary scenario” for Google. To quote Goldberg directly, ““Per a recent L2 study, 30 percent of online shoppers start their search on Amazon vs. 13 percent on Google. That’s a huge amount of traffic that Google isn’t getting in one of the most profitable advertising segments.”
It’s indeed a scary scenario for Google, who’s realizing that Amazon has opened a floodgate for other online retailers with considerably sizeable client and vendor base. I’m curious to see who Google will respond. There is only one or two ways the can respond: enhance their own service or take the Apple route by making themselves indispensible. Either way, they’ve still got to figure out exactly how to do this.
On the other end of spectrum, there’s Pinterest. I, like most other women, love Pinterest. Yet as a marketer, I’ve hated Pinterest for what I felt was its rather uselessness when it came to marketing. Sure, Pinterest is a top three social platform for directing traffic to a website, and sure I can use Google Analytics to find out how much of my traffic came from Pinterest – but I could never really get inside Pinterest to see what was going on there. Till now.
Jack Marshall of the Wall Street Journal, in an article titled “Pinterest Launches Analytical Tool for Business,” describes the dashboard as being now able to provide “business account holders with information about which of their ‘pins’ generate the most impressions, ‘repins’, and views, for example, alongside other metrics such as the volume of traffic that pins drive back to businesses’ external Web sites.” He adds, “It also will provide the businesses with demographic, location, and interest data about their audiences.”
The real purpose behind the free tool is to make Pinterest viable for business, attract increased users and visitors, and prime it for advertising dollars. This begs the question: is Instagram next?
The message these two online giants are delivering loud and clear is two-fold: 1) online monopolies can and will be destroyed, as is the case with charging forward with ad words, and 2) analytics just became a serious game changer for even the more “frivolous” of platforms. For you, as a business owner, it means one thing: you need to get just as serious about your analytics. Your entire business strategy needs to start considering the data you’re receiving from various sources, including traffic patterns, sources, bounce rate, conversion rate, engagement levels etc. If we look back the social media’s infancy, one of the biggest problems business owners faced was a lack of ROI. Tools and methods to measure results were few and far in between and social media was an intuition game. That has completely changed now, and the fact that even an image heavy female dominated “mood board” has introduced both business accounts and analytics, tells you that analytics is the only way to move forward successfully.
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