Six Pixels of Separation - The Blog
April 15, 201411:57 PM

Google's Third Wave Of Innovation

Is it normal that a search engine is buying up all of the robotics and drone companies?

If you're in the marketing profession, you have to be scratching your head at the moves that Google has made over the past little while. It's hard to reconcile how a company that was founded on a search engine (and then optimizing an advertising platform so efficiently that it drove them to a $350 billion market cap) could be spending its war chest on technology so nascent and future-focused. If Google's main form of revenue is advertising and licensing software, where will the ads be going on all of these robots and drones?

Google's first wave of innovation.

Google has gone through two dramatic waves of innovation (with many nuances and smaller ones in between). It's important to understand that in phase one, Google mastered search. The ability to organize the diverse and divergent pieces of data, content and information that were being created in a non-formulaic way across the Internet. It was everything from programs to articles, and (through the years) it's hard to imagine how we would find anything (let alone remember stuff) in a world where we can "Google it." The problem with search, of course, is that there was no significant revenue in helping to organize all of the world's information. While Google didn't invent keyword-based advertising, they have certainly mastered it. Ushering in the era of performance-based advertising, they nurtured search engine marketing into becoming one of the most effective forms of direct-response advertising. People searching for content would be exposed to contextually-based text ads that did not interrupt the search experience. On top of that, the ads would be sold to brands and media agencies in an auction-based mode where the cost would be charged only if the consumer clicked on the ad (showed interest). Over the years, Google has expanded the offering to individual's website wishing to run these types of ads in lieu of traditional banner advertising. From there, the company has made several strategic acquisitions to build their GDN (Google Display Network). The acquisition of YouTube in 2006 is also significant in this first wave of Google's innovation. Years later, they are beginning to understand the types of commercials that works in the online video world as TrueView continues to learn which ads the consumers are watching (and which ones they are skipping). Within a few years, TrueView will become as efficient at performance based commercial advertising as keywords have become. To put the first wave of Google's Web dominance into perspective, comScore Media Metrix's rank of the top 50 U.S. desktop Web properties for February 2014 tells the tale: In a world of over 222 million unique visitors, Google's website account for over 187 million of them.

Google's second wave of innovation.

Back in 2006, Google acquired a lesser-known mobile operating system called Android. It was, at the time, an acquisition that perplexed the media pundits. It was a bold play and one that has - without question - enabled Google to become a dominant player in the mobile space. Now, Google doesn't just build applications that run on a mobile-enabled platform (which they do), but they own the actual platform on which our mobile connectivity is playing out. As consumers move from desktops PCs and laptops to smartphone and tablets, Google has continued to innovate and own the mobile landscape, and this includes being hyper-competitive in relation to Apple and the staggering success of the iPhone and iPad. Still, Android (and the supporting Google applications and mobile websites) are the 800-hundred pound gorilla in mobile. Adding some data to this, comScore's February 2014 U.S. smartphone subscriber market share demonstrates just how much of the mobile Web Google owns: While Apple ranked as the top smartphone manufacturer (41.3%), Android led as the number one smartphone platform with over 52% of the market shares. What makes this more staggering, is that Google sites hit close to 90% of the entire smartphone browsing and app audience. In short, they own mobile as well. 

Welcome to Google's third wave of innovation.

How does a company like Google grow? The opportunity to scale becomes increasingly difficult (will another 30 million people using a particular app truly help them?). The answer lies in in connecting the last mile of humanity that is currently not on the Internet. It's nothing new. We have been talking about the digital divide for decades (the chasm that exists between the haves and the have nots). In fact, Google's Executive Chairman, Eric Schmidt, discusses this very topic in depth in his business book, The New Digital Age - Reshaping the Future of People, Nations and Business (co-authored with another Googler, Jared Cohen). There are close to five billion people not connected to the Internet. There are countless appliances that aren't "smart" or online (just yet). That is the kind of scale that Google must now focus on. For that, Google is pushing the envelope of innovation towards drones, robotics and artificial intelligence. Massive and risky bets that will enable a new type of connected consumer. Drones will enable Google to deliver connectivity to that massive last mile. Robotics is primarily based on the idea that we can get machines to work, think and do things somewhat autonomous to human intervention. This requires a new kind of computing coding and architecture - one that is based on machine-learning capabilities (yes, programming a computer to teach something to another computer and having each successive version be able to get better and teach more). While everyone is focused on Google's most recent acquisition of Titan Aerospace for their drones, or that they have bought eight (maybe more) robotics companies in the past short while (including the very popular Boston Dynamics), not enough people have spent enough time thinking about why they acquired DeepMind in late January.

Getting computers to think better.

It has been reported that Google spent close to $500 million for DeepMind (which doesn't seem like much, if you consider that it also paid over $3 billion for Nest not that along ago). DeepMind was in stealth mode when purchased, but we have been told that the London based technology was developing artificial intelligence to help computers learn and operate like humans. Couple that with connecting more devices, purchasing drones and robots and you can let your mind wander. From a marketer's perspective, this may still sound quizzical and off-brand, but to anyone willing to expand their horizons, it is clear that Google is a company not willing to rely simply on media as a business model, but rather much more interested in technology and connecting the word. This is important for brands to understand as well. Perhaps the real future of marketing is not in just getting more efficient with advertising dollars, but in following Google's footsteps to help connect your our brands to more people through technology on a more global scale.

The above posting is my monthly column on marketing innovation for Strategy Magazine. I cross-post it here with all the links and tags for your reading pleasure, but you can check out the original version online here:

By Mitch Joel

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