What Google Investments Tell Marketers About Its Search Roadmap





  • What Google Investments Tell Marketers About Its Search Roadmap




    by , Staff Writer @lauriesullivan, September 28, 2018

    If marketers want to map the future of search, all they need to do is track the number of times company executives mention a technology, especially during earnings calls, words in patents, and hush-hush investments such as Google’s in Gradient Ventures, a company that invests in early-stage AI startups, and Google Assistant investment program.


    Marketers must also analyze the amount that companies spend on research and development. CB Insights maps recent investments in terms of absolute dollars and a percentage of sales for some of the top companies.


    Amazon leads with $22.6 billion in 2017, followed by Google at $16.6 billion, Microsoft at $13 billion, Apple at $11.6 billion and Facebook at $7.8 billion. In terms of percentage of sales, Facebook leads with 19.1%, followed by Google at 15%, Microsoft at 14.5%, Amazon at 12.7%, and Apple at 5.1%, according to CB Insights.


    Google may have made a major acquisition when it acquired DeepMind for $600 million in 2014, but in 2018 it also acquired Halli Labs, AIMatter, and Banter, which all focus on AI.


    Several recent patents also suggest that Google prioritizes deep learning, rather than machine learning. Deep learning does not require adjustments from engineers to make predictions.


    CB Insights notes that although AI has been a key focus for more than a year, the mention of AI and machine learning by Google executives on the company’s earnings calls reached a new peak in the second quarter of 2018.


    Overall, CB Insights estimates that about 86% of revenue comes from advertising, but rising ad costs, increased regulations, heightened competition, and a shift to mobile and voice are threatening Google’s business in search and advertising.


    One of the biggest threats to Google is Amazon’s high percentage of product search market share. Amazon dominates product searches, according to Survata’s annual survey, although Google recaptured some of that lost share. Product searches still make up roughly 60% of Google’s total ad-click share.


    Data from eMarketer shows Amazon demonstrating growth. eMarketer forecasts a 3% gain in the ad market for Amazon in the next two years. 


    Another threat is that Google’s traffic acquisition costs continue to increase, as they have for several quarters. This is the largest expense for the company. TAC is expected to rise with the shift to mobile and regulations around data privacy. Amazon and Apple also continue to put pressure on the company.


    Still, Google trails Amazon and Microsoft in terms of the market share owned by these companies. In 2018, Google took about $1.6 billion, about 8% of the cloud market.

    MediaPost.com: Search Marketing Daily

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