Running Interference: Google Brings Enterprise Analytics to Joe’s Tire Shack
In Joel on Software, one of my favorite writers on the business of software describes Microsoft’s strategy for keeping competitors at bay: just change the API.
Microsoft would be developing an email platform, for example, that made extensive use of some low-level programming within Windows, as would a competitor. But because those APIs were poorly documented (not a mistake), the competitor would have a hard time figuring out why their email program kept crashing. Microsoft’s Outlook team, on the other hand, could just walk over and talk to the programmers down the hall, and figure out how to deal with the issue.
And by the time the competitor had figured out their own problems, Microsoft would have released a service pack that broke all of their carefully-constructed workaround.
This is not a new strategy. Sun Tzu wrote:
Defend what cannot be attacked; attack what cannot be defended.
So, too, does Google employ a strategy of running interference. Writing about their constantly improving free Analytics product, Bill Glassman observers:
They might be showing obsession because of where they want to be, but then again, they could be throwing up a smoke screen to keep the competition too busy to attack Google on advertising.
We’re big fans here of Google Analytics – it’s price-to-feature ratio can’t be beat, and for many organizations that are tentative about taking the dive into web analytics, the barrier to entry is embarrassingly small. Three minutes and some copy-pasting, and you’re gathering data.
For Google, the value in providing an enterprise-level solution for free is not to reach deeper into the Fortune 500. The value is where Google has always been aiming: the vast and deep middle.
While the top 100 advertisers on Google’s ad network (by dollar volume) are certainly using an array of commercial campaign and traffic analysis tools, they certainly don’t account for more than 25% of total ad volume. That leaves a couple of million advertisers who could make better use of their ad dollar if they had better metrics. And remember, these advertisers aren’t necessarily trying to decide which search engine to buy ad space on – they’re weighing AdWords against the yellow pages, billboards, radio spots and placements in diners.
There is a huge, pent-up demand for information about the effectiveness of advertising, and as fast as the ad world is changing at the high end, the long tail of small business is mired in advertising techniques that have been dutifully driving their businesses for the past 40 years… and are about to get upended. By arming these companies with “enterprise-class” tools for evaluating the success of their campaigns, Google is creating a huge, loyal contingent of long-term customers who will shift their advertising budgets online in direct proportion to the growing certainty of that medium’s success.
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