Change of policy at Google

by Business Case Studies on Thursday 8th May, 2008

Change of policy at Google

Advertising is an important part of the marketing mix. It presents a company's products or services to the buying public and its objectives are to increase sales and profits and increase awareness of the product or service.

Increasingly, business advertises on the internet and there is competition between search engines for advertising revenue. Google is the most-visited site on the internet and accounts for more than a third of UK traffic. Consumers increasingly use the search engine to find even the most familiar brands – making any change to its policy critical (The Times, 3 May 2008).

Up to now, if a searcher typed into Google a trademarked business name such as Auto Trader or Tesco, a results page appeared which only showed that company's advertisement at the top. But Google has altered is policy on linked adverts and ended its policy of trademark protection in the UK. As from Monday, 5 May, with Google's new system (which has been operating for four years in America), a search under those same names will result in a whole list of adverts. However, because of the dominance of Google, the big brands believe they have little choice but to advertise with them (Channel 4 News, 2 May 2008).

Ian McCaig, the chief executive of lastminute.com told Channel 4 News that he was considering legal action. 'We believe that Google's policy change is a big problem and we object to it. We are investigating with vigour the legal position and if that investigation concludes positively then we will pursue a legal case, no question' (The Times, 3 May 2008).

Matt Brittin, a country director with Google UK, defended the change: 'What we want to do is give the best possible experience for searchers, and we try to make sure that sponsored links and natural searches give relevant results' (The Times, 3 May 2008).

Fredrick Marckini, the chief global search officer with Aegis's Isobar, said: 'When this was introduced [in America], there were similar amounts of foreboding and dread. But shortly after it passed and advertisers got used to it. The fear is overblown and the opportunity understated' (The Times, 3 May 2008).

See the Times 100 case study on Beiersdorf Nivea, a company which has launched many new brands and products into a variety of countries and categories. Being an innovation leader has allowed Beiersdorf actively to shape its markets and set new trends. These product launches have led to long-term global growth. The case study shows the stages of the marketing mix a company must go through – market research, brand positioning, etc – to determine its advertising policy.

Sources:

The Times Online – Google alters policy on linked adverts, 3 May 2008

Channel 4 News – Lastminute prepared to sue Google, 2 May 2008

The Times 100 Edition 12 Cast Studies – Beiersdorf Nivea – How market research supports the new product development process

Potential Study Questions:

  • Define 'promotional mix'
  • Describe how advertising changes during a Product Life Cycle.
  • Explain the difference between 'above-the-line' and 'below-the-line' promotion.

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