You're here; therefore, we can assume you're a high-value consumer to advertise to. When enough people take the $1/month option, advertisers will be primarily advertising to consumers with low purchasing power. As that happens, the cost of advertising on Google AdWords nosedives, and Google is left making substantially less money.
Maybe most people aren't like you and I. But I don't think anyone at Alphabet is willing to risk adding complexity to potentially earn less.
This ignores the potential fallout as the message can be distorted from "Optional payment for Google Maps" to "Google starts collecting money for Maps", and finally to "Google Maps costs $X".
my guess/understanding is that every team at Google is under significant pressure to monetize. Unlike the old days where there was more of a strategy of "build anything that brings people in, search/ads will monetize those eyeballs".
The 2018 google maps price increase could have given some execs HUGE bonuses under that new model, even if it isn't ideal from a Google-wide standpoint
Before the 2018 price increase I was convinced Google didn't care to have lots of little customers paying for Google Maps. It was all peanuts compared to their main income
Sure, if you plan on staying small and never growing, this is fine. But you can't build your site for growth staring at the edge of an $4-8/CPM marginal cost (in addition to all your other overhead!).
$4-8/CPM is far more than most ad networks pay. Perhaps Google is deliberately trying to get rid of most major GMaps users. If they follow through on this, they will be successful.
Google runs the largest advertising network on the web.
They already pay for much of the content you see online.
Only they have the ability to say "pay $1-$3 a month, and we'll replace those ads with a thank you", and have it actually affect a significant fraction of what you see.
Because an advertiser will pay more and most people don't want to pay anything? There's a technical problem of handling micropayments but those are a lot smaller than the social/business problems: think about what the experience would be like clicking around with “Please deposit $0.25 to continue” prompts, and whether sites would bother with that when Google will give them a check every month for less work.
Google has tried this with Contributor back in 2015, and then again in 2017, but it wasn't popular because you were committing to pay a noticeable amount of money every month (which is more than many people think they can/should pay) and the people who would pay that would only pay that if they didn't see ads at all (since you were effectively bidding for your own ads, this wasn't a given). If, as is common, you hit sites which weren't using Google's ad network, you'd still see ads and the prospect of paying more to buy those out wasn't going to be a fun sale.
Now, maybe Google isn't trustworthy here but they're far from the only party to try this and there are also services like Apple News or Blendle which are trying a more targeted approach. I don't know how their sales look but the fact that it hasn't been newsworthy suggests that the status quo isn't going anywhere quickly.
You are vastly overestimating how much that information is worth to Google. Their average revenue per user is a pittance compared to the $5 per user per month you’re paying as a GSuite customer. They’re strongly incentivised to make sure your data isn’t misused in any way. It’s not worth jeopardising hundreds of millions in future revenue to show slightly more relevant ads to a handful of folks.
The strongest endorsement I’ve seen for GSuite is that even direct competitors to Google have no issues using it. They trust Google with their data that much.
The budget from advertisers is already credited to Google - if such tactic becomes popular, advertisers would get lower returns (bounces would be way higher than now), and move their budgets elsewhere, harming Google's business.
The point is that targeted ads are a small price to pay for services like google that are so instrumental to the lives of most people. The reach that this model provides probably outweighs the benefits from being purely subscription based anyway.
What do you base this on? Customizable user-tailored ads through natural language would make even more money arguably and Google is uniquely positioned to do it.
Also consider that paying even a dollar a month for a service will result in the addressable market going down orders of magnitude. Apple is pretty much the only company in existence that is able to make people pay so much on luxuries like that.
Google don't seem to be advertiser friendly in the same way they used to be.
Adwords is increasingly becoming a black box where advertisers aren't really encouraged to understand what is going on. In all lot of cases they seem to want to deny advertisers information. I'm not sure what the thinking behind this all is but I suspect one of the biggest reasons is leveraging data without exposing it to advertisers or allowing them to do creepy seeming stuff.
That doesn't mean Google won't buy them or won't want to provide these kinds of services. They do provide a crappy product in this category which has very few use-cases these days.
Anyway $28m considering the SAAS/SME model should be viable at a range of scales. I wonder if they are planning any big changes that require this kind of cash. Maybe something freemium or a new product that will take a lot of time before it can be profitable. Just speculating.
I don't think the result is economical purely because if it were, Google would be monetising their own models by now (of course, maybe they could monetise it if they were willing to go with a paid instead of ad model for search).
What an excellent idea. Pay money to Google every month in order to segment yourself into the "has lots of disposable income" marketing category thereby increasing the value of your attention, for the privilege of not having your mind raped by ads you never wanted to see in the first place, all while they continue to track your every move online.
If you don't monetise it then someone else will, and presumably Google will prefer them (in listings, etc.) because they're playing the game and giving advertiser's an opportunity to spend [more] on the platform.
The problem is that ads price discriminate. Google may not get much money off of you, but there are other users that are very valuable (think of a manager in a billion dollar enterprise searching for a subscription product to buy). Would you be okay with it costing 0.05% of your income?
Of course it will be hard to compete with ads as business model if the alternative doesn't allow for price discrimination.
The effect of this one time gift is temporary. The obvious overall goal is to gain longtime users, not short term gains by burning through free credits. The overall effect resulting in raised bids for current advertisers is negligible. Unless you have thousands of new adwords users opening up accounts, focusing their free credits towards the same term that is already competitive, then yeah, sure, ppc will increase a little.
You're running a small business, lets say you receive a credit of $100 to start an adwords account. You'll see from the adwords campaign a noticeable increase in traffic occurs, you can track phone calls from ad campaigns, and observe click-throughs to emails/sales received from running campaigns.
Great. Then you increase your budget to $1,000 a month on adwords, watch as pay-per-click supplements organic traffic that wouldn't otherwise be captured.
Beyond that, within the first month or so of having a new adwords account, Google (with a live and knowledgable rep out of Ann Arbor) personally helps you set up and optimize your campaigns (a service that predatory SEO and SEM experts typically gouge small businesses on). All of this is for free to help businesses understand how to use a tool that touches 65%? of users online. Disgraceful. How dare Google make money and put you in touch with consumers who don't know about your products or services.
Too expensive. Google makes, on average, smtg like $50/user/year or something (not an accurate number). Now obviously this varies, so some people are much more valuable, and some are less valuable. The value depends on many things, but one of the biggest factor is purchasing power.
Now -- if you're willing and able to pay eg. $10/month for Google Premium, then you likely worth much more than the average user. So the more you're willing to pay the more you worth as an advertisement target. I am not sure where those curves meet, but I presume it'd be a lot.
Google makes around 30 billion/quarter on ads. Assuming most of that comes from 200 million users (they have more than that but I assume a lot are not worth very much to advertisers), and their ad revenue comes from a 50% cut of the total ad payments, that comes out to around $300/quarter or $75 a month. I'd pay it, but I think most wouldn't.
Maybe most people aren't like you and I. But I don't think anyone at Alphabet is willing to risk adding complexity to potentially earn less.
This ignores the potential fallout as the message can be distorted from "Optional payment for Google Maps" to "Google starts collecting money for Maps", and finally to "Google Maps costs $X".
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