How Long Will AdWords Remain Invincible?

Melissa Mackey (aka “PPC Moses”) made a very cogent argument about why Bing Ads will eclipse AdWords eventually. She based her case on the ad products of the two search engines and found Bing’s offering to be superior. There is no time-frame mentioned in the article for this to happen. Given the pace of change in internet world, we can assume, the expected to happen in next five years, if it does.

While Melissa’s argument  is compelling, some facts need to considered before pronouncing Bing as the David who will slay Goliath that Google is.  (It’s surreal to read the previous statement considering that 15 years ago the roles were at complete reversal.)

First and foremost is irrespective of the capabilities of platforms, ad dollars always chase the audience. Marketers will tolerate all the quirks and shortcomings of a platform if it has the right audience.  Case in point is LinkedIn. Melissa has talked about in past about how LinkedIn (and others) behaves as if they hate money. In spite of sub-par ad platform, businesses continue to use LinkedIn ads as they have the right audience.

Now, let’s find out how big Google’s audience is.

Search:  As per this data (from 2013), Google has complete dominance (over 90% market share)  in almost every country it operates in. Go ahead and check that link. Barring a few exceptions like China, Russia, and South Korea, all these countries do not know a search engine outside of Google. Even if Bing manages to win good market share from Google in US, they don’t seem to have any plan in place to do the same for rest of the world.

Video: Google-owned video service, YouTube, on its own a massive web property with more than a billion users a month with 6 billion hours of videos watched every month. It is third most visited site in the world after Google and Facebook. There are very few, if at all, online destinations that can boast such attention from the increasingly distracted web users. It’s not a big surprise that YouTube is the second largest search engine. While we are discussing moving budgets from AdWords to Bing, YouTube is trying to eat in to the TV advertising pie, and probably doing it with much more success.

Android: At the end of 2014, close to 2 billion Android devices are in use. It can be argued that the market share itself may not be relevant and iOS performs so much better on other metrics like engagement, purchasing power, etc. Marketers may argue that Android users are not as valuable to as iOS users. Yet, having a huge user base with default services from Google is a defensible moat.  If Mobile is the future of internet, Google has a very very strong lock on it.

Chrome: Just when everyone thought browser wars are over, Google launched its own browser Chrome. In less than five years, it has become dominant browser.  And this browser’s address bar is the Google search box! What started as “just another browser” has morphed into a light-weight operating system and Chromebooks, a laptop with Chrome OS, are among best selling laptops. Contrast this with the terminal decline of Microsoft’s Internet Explorer which has fallen from near monopoly of browser market to a distant also-ran.

Gmail: Almost 3 years old data suggests Gmail has 425 million users. They must have easily added another few hundred million users since then. Again, the humongous lead Hotmail (acquired by Microsoft in late 90s) and Yahoo Mail had over every other service  was lost in less than a decade.

Maps is another product that owns a huge user base, partly thanks to being the default application on Android.

Pop quiz. Quickly think of a Microsoft-owned internet property that can claim such a wide user base? You have to think hard to come with an answer for that. Microsoft has hardly any web property that comes close to these numbers. Skype with over 300 million users comes close, but there are bunch of other mobile messaging applications that surpass Skype in the users.

Given Google occupies such a huge mind share of online users, it is hard to think that users will migrate to another search service which at best offers results as good as the current one.

Does this mean AdWords will continue to own the search market?

The answer is yes and no.

Yes, because for foreseeable future, there is no strong alternative in the search domain. If users continue to use Google as their default search engine, AdWords will keep receiving advertisers’ dollars.

The answer is also a No. This a slightly long-winded answer.

AdWords can lose market share but for reasons other than Bing.  Here are some reasons why AdWords (and Google) may get sidelined.

Google stops innovating the core search product: Search is no longer about “10 blue links.” New sources of information start showing up and search has evolved to keep pace with it. It is hard to argue that Google hasn’t kept pace with all the changes happening around it.

Tech industry is awash with examples where giant companies with formidable market positions vanished in matter of years. Think of AltaVista, Excite, Lycos and 23 other search engines before Google. Think of BlackBerry and Nokia before iPhone. Think of FriendSter and MySpace before Facebook.

If Google stops being paranoid about search, their position as top search engine will be under threat.

Ads become irrelevant: The greatest strength of AdWords ads is that Google shows only the relevant ads. In fact, they are so good that often users can’t tell organic listing and paid ad apart. If advertisers want to show poor quality or irrelevant ads to the users, very high  tax in the form of low Quality Score is applicable, which may still not be good enough for Google. Irrelevant ads will mean users will stop clicking on the ads. They will scroll up and down on the search results page, browse more results to seek the right results, and in frustration reduce or stop using Google search. This is an apocalyptic scenario and unlikely to play out.

When AdWords launched the inclusion of close variant terms in Exact and Phrase match types, it was met with a vocal disapproval from PPC community. After the change, there isn’t much complaints about it. This probably indicates this change was done carefully to avoid complete irrelevance of ads.

Google fails to ride the mobile wave: Rise of mobile apps has created a walled garden where Google is not as dominant. Ironically, the largest walled garden, Android, was created and owned by Google itself.  Apps can be very powerful as they can change user behavior. If, instead of using search, users directly to go a specific app to complete their desired task, Google gets cut out. For example, for routine shopping requirements, if users directly open the Amazon app and accomplish their activity, it will certainly affect Google. In this case, if Google loses, the winner is not necessarily another generic search engine.

If, at all, Google loses search domination, this is the most likely scenario.

So, will Bing overtake Google? I would say, unlikely.

Here’s a final thought.

Search for books on Bing Ads on Amazon. The number of books on Bing is zero. Well, you can count it as one if a 12-pages long Kindle Short qualifies as “a book” in your view.  If you search for books on Facebook, Twitter or even Pinterest, you will find many relevant results. The day Brad Geddes announces his new book on Bing Ads, will be the day when we can confidently say, Google’s dominance in search is behind us.