Monthly Archive December 2009

Google, the Jitterbug & Salt Licks: You Are the Product

google's multicolored logo

Google has built quite a company by doing business with consumers. With a current market cap of close to $185 billion and income last year of almost $22 billion, Google is bigger than Amazon, Nike, the oft-maligned Haliburton and Pepsi. And it’s nipping at the heels of Coca Cola. But how can that be? How can a company that gives it’s products away to consumers become so big and make so much money?

The answer reveals a disturbing truth: In Google’s world you are not the consumer. You are the product.

The traditional business model casts you and I as the consumer. Companies offer products and services. If you and I see value we pay and then consume them. Companies make a profit, consumers get value and investors realize a dividend.

Google’s business model is different. Google serves well-made offerings to you and I for free. We gather around those offerings, congregating under Google’s tent, while advertisers pay Google to ‘consume’ us.

If you don’t believe me, just follow the money. Does Google make its money by giving away web searches, directions to Aunt Mabel’s or videos of baby Charlie biting his brother’s finger? No. Google makes its $22 billion a year by selling advertising. But, it can’t sell advertising if there’s no one to advertise to.

This model isn’t new. Media companies have been doing something similar for decades. They produce their offering, usually in the form of entertainment or news, serve it via print, television or radio and we congregate. Advertisers then pay to get access to us.

What makes Google different is their offering is free and they don’t pay a nickel to create it. Google’s news, search results, financial info and videos are created and financed by someone else!

If Fox News wants to run a story that they think will attract lots of readers, they have to pay journalists, photographers, fact checkers and editors to get the scoop and publish the story. That costs thousands for a piece that will fill 500 words on their site.

What does Google pay to run the same story? Nothing. They have an algorithm that searches the net, finds the Fox story—along with 15 other stories just like it—and then aggregates it on Google News. We do a search, get the Fox story for free while receiving messages from advertisers. Google makes money while Fox foots the bill.

In addition, Fox News, CBS, the Wall Street Journal, People Magazine and your local paper all have strong competition. If we don’t like what they offer we have many alternatives.

Where else can you get free high quality maps, searches, news, videos, email, language translation, voice mail, operating systems, internet browsers, images, stock quotes and spreadsheets all under one roof—other than Google? Who keeps Google in check by providing an alternative? No one.

Isn’t Google good? Their unofficial motto is, “Don’t Be Evil,” so why should we worry?

Look at Google when big money is on the line. When they moved into China the oppressive communist dictatorship insisted that Google filter its searches. This blocked the population from having access to politically sensitive content; content that would undermine the Chinese government.

Did Google fight back in favor of the people? No, they capitulated. And why should Google help? The people of China are not its concern. As long as Chinese citizens use Google’s offerings then Google is happy because people equal product and product equals potential profits.

If Google is willing to use people that live under a repressive regime for financial gain, how safe are you and I?

Google wants to put all books online, they’ve amassed satellite imagery of the world, and Google Wave is an all-encompassing discussion that makes Twitter and Facebook look like the Jitterbug. Are we ready to trust Google with every aspect of our lives?

Big game hunters know that the easiest way to find game is to get it to come to you. Hunters employ many tricks to make that happen, but one favorite is the salt lick. Hunters hang a big block of salt on a tree and then move off and hide within shooting range. Game seek it out and will lick the block for the mineral supplement. And when they do—blam! Hunters can take game all day long using a salt lick and for that reason it has been outlawed in many places; it’s just too easy.

Google’s offerings are the salt lick of commerce. We know there’s a cross-hair on our back, but $22 billion in revenues says we don’t really care, just as long as we can get a free lick.

Interlude: Bombing Your Village & Stealing Your Women

True story.

A few years ago a vendor approached us with an opportunity. They’re a large printer in town and their customer base stretches well beyond our local market. They had a customer in New England, a national financial company, that wanted to redesign a magazine. A great opportunity.

The idea was that we would go to New England with our vendor. Together we’d pitch their customer on using Bob Wright Creative to do the redesign and creative and our vendor would print the mag.

Simple enough, right?

We like to be prepared. We do presentations and pitches all the time and we win a lot. The reason we win is we come prepared. We take time to learn what problem our client or prospect is facing and we develop real solutions. It may sound simple but you’d be amazed at how many times our competitors have not done their homework and don’t correctly understand the problem.

I met with my contact at our vendor to talk about the opportunity and to begin to prepare how to approach our joint pitch.

“Oh, I can’t help you. Our owner is going to handle this one and he’s in NYC and is going to meet you at the customer’s HQ. Just go do your thing and it’ll be fine,” I was told.

A sense of dread mixed with panic started to set in, followed by a flurry of phone calls and emails on my part trying to get this thing nailed down, all to no avail. “Just do your thing.”

Like any smart business owner, I decided to take both my creative director and my senior project manager with me. If this baby was going south I was going to be flanked by the best. Of course, a smart business owner would have bailed and told our vendor “good luck.” Believe me, I thought about it, but felt like I was already committed and had to see it through, even if our partner was unresponsive.

So, my creative director, project manager and I drove eight hours to the hotel ready to ‘do our thing’ in the morning, whatever that meant. When we got to the hotel there was no sign of our vendor, so we went out and found a BBQ joint and had dinner. When we got back our vendor and his team of five employees were waiting for us, perturbed.

They were upset that we were not there to show them the presentation we had prepared for tomorrow.

Presentation? You’re kidding, right? We’re just going to wing it and “do our thing” like you told us. Besides, this is your customer and your presentation right? No, it’s all riding on me and my guys. Nice.

Back in my room I felt despair. What are we even doing here? We’re getting an attitude from the vendor who refused to give us any direction and now they want to know where our presentation is? Well, I was ready to go to bed, wake up the next day, skip the meeting and head home.

Fortunately, my creative director and project manager jumped in. We pulled an all-nighter and put a smashing presentation together. We had it nailed and ready to go. We crashed for a couple hours and then got ready for the day.

We met with the client and their team, about six women, and got to work. We put our presentation on and hit a home run. Lots of great dialog, great questions and thoughts from the client on how we would work together. It felt like we were winning the job. I was ready to close and ask for their business; get it done.

Then the owner of our vendor jumped in and shot it all to hell.

He said our two companies, Bob Wright Creative and his company, were like two fighter jets in a war, fighting on the same side. The Iraqi War had just begun. I knew at that moment we were doomed. But, just to make sure, the owner continued. He told all the women there to think of this as our first date. We would spend some time to get to know each other—over a figurative dinner. And then … then we could get more intimate, figuratively, of course. I was horrified.

I looked at my guys and I looked at the faces of the women in the room. We were going to bomb their village, my vendor and I, and we were going to make off with the women and have our way with them, after a nice dinner. It was stunning.

20 hours in a car, hundreds of dollars in hotel rooms, meals, fuel and tons of lost revenues for my top guys to be involved and this man was killing it all with just a few words. He was the Anti-Midas, turning everything he touched to turds.

We didn’t get the job but a legend was born that day. I can laugh about it now, but that printer doesn’t get our work anymore for fear that they might have another great opportunity for us.