File this under: Oops.
Google’s stock has flown high on revenue from paid search and advertising. One of the most compelling motivations for allocating a bigger chunk of your marketing budget to paid search and online ads is the measurability of the click-stream. When you run an ad in, let’s say, a newspaper, you have to do a lot of engineering to create a campaign where impressions can be tracked to top-line revenue. Special discounts, special URLs or phone numbers, staggered drop dates–all just to be able to pinpoint how many people read the ad and then bought what was advertised.
On the Web, you can follow the clicks from an advertisement or listing directly through to the order page. You can adjust your campaigns to improve performance rapidly by testing different types of ads, messages and placements until you identify the package that performs the best. Good marketing.
So Google, raking in the ad dollars hand over fist from the frenzy of marketers who want campaigns they can track, decided it would be a good idea to enhance their Advertising offering with Web analytics. If customers are coming to you because they can better track their marketing ROI, why not up the ante and provide them more powerful tools to track it? Brilliant.
Google went out and bought Urchin, a Web analytics company that’s been around for years offering simplified reporting tools for tracking page views and visitors and other statistics about Web site performance. The plan was to provide Google’s advertisers with a way to track the click-throughs and conversions on their campaigns. They called it Google Analytics.
Unfortunately, Google went from raking in the cash to stepping on the rake and getting nailed by the handle. Forget about the debacle they had during their launch, the real story is that some users are beginning to find the analytics so useful they can slash their budget for paid search and online ads. The CEO of a well-known hosted application company told me that the analytics opened his eyes to the poor ROI of his online spend with Google, and now he’s looking for other channels to replace it.
I don’t know, is that like upselling the emperor on a big mirror so he can see the nice new clothes he just bought?
Don’t get me wrong–I think Adwords is a great product for certain types of marketing campaigns. But so many marketers have become double-fisted drinkers of the Adwords Kool-aid, I think the whole thing’s a little Bubble-icious. I just never thought it would be Google supplying the pin to pop it.