Let’s have a look at Google’s general strategy and business objectives first.

The Importance of Advertising

While Google’s mission states:

Google’s mission is to organize the world’s information and make it universally accessible and useful.

Hopefully, they are using a somehow more enhanced version of this statement internally.

The most important change I presume that have been made is the Who part. This would bring things in a more ‘consumer-centric’ perspective, i.e. a marketing perspective. Especially since the switching barriers are so low on the web.

Advertising Is Essential

Anyway, as 97% of Google’s revenue is from Ads and 67% of the total revenue is being made on Google’s websites they should be really focused on making the ads a valuable addition within the user experience.

And that is what they do.

So, What Is It They Change?

And they improve the system:

1. Increasing Customer Satisfaction
   Making top positions more expensive, to make them only affordable for websites with high conversion rates;
   
2. Improving Trust
   Adding branded elements to increase user trust and gain more control on the advertisers websites;
   
3. Leverage Existing Brands
   Offering premium services for free to large advertisers, to improve the visibility of brands in the search engine;
   
4. Creating Experience
   Experimenting with features to improve the attractiveness of the ad area, while promoting other Google services like Product Search.
   

They offer quality tools for free:

1. Google Analytics
   By offering a great a web analysis product like Analytics for free, they help website owners to improve their websites and thus improve the resources they send traffic to from the search engine results;
2. Google Website Optimizer
   Another great example is Website Optimizer – their free A/B and Multivariate testing tool – which of course has the intention to improve conversion rate and is another way to improve the user experience.

Where Is Google Heading With Search?

Most, if not all, changes Google is going to make to both the paid and organic part of their search experience does have the intention to increase perceived service quality.

Let’s have a look at a marketing services model (Grönroos, 2000) which shows how to manage the perceived service quality:

Expected Search Quality

So far, Google has relied heavenly on consumer needs and word of mouth. It was recently they started experimenting with television as a communication medium.

It’s quite common for Google to push products through users, like they did with invitations for Gmail while playing with the attractiveness of scarcity by limiting the number of invitations.

They push their image in many ways:

1. Implementing tons of small features and communicating them aggressively to support the perceived innovative character of Google
2. Decreasing product launch time by offering services and products in beta to users to increase consumer loyalty
3. Offering access to services like Google Labs to stimulate word of mouth
4. Imitating features launched by competitors or suggesting they study algorithms as if they can copy, improve and use to keep their product superior
5. Put forward that the impossible is possible, for example by putting a ticking inbox size counter on the homepage of Gmail

Sometimes there are rather subtle ways of communication, like the Google Doodle which has of course the intention to visualize change and progression.

Experienced Search Quality

Technically, it’s of course about the search results. Which is in terms of quality ambiguous: the same result can be good for the one or bad for the other. So far there have been two notable ways they’ve introduced to improve the results:

• Presentation of Search Results
  For example by introducing Universal Search while pushing their vertical search engines (Google Images, Maps, News, Blogs, Books, Products, etc.)

• Personalization of Search Results
  Using the Google-account to aggregate user data which is useful for both personalization of search results and targeting options for advertisers

They seem to spend as much time on the process side of the experienced quality:

• Way of Searching
  The exacter (in terms of context and interpretation) a search query, the better results can be presented. So Google has changed the way we search, especially by moving us away from broad search terms by listing related searches and of course by the slow introduction of suggestions.

• Speed of Searching
  Google has almost an obsession for speed, probably because users currently associate speed with the quality of a search engine. Sometimes leading to ridiculous propaganda, like keeping the number of words on the homepage at 28. Sometimes by technical changes. They even offer free hosting of AJAX libraries to webmasters to improve the speed on external websites.

The Lack of Google Brand Power

While Google’s brand a top or maybe the highest valued brand in the world, the basis seems to be pretty small.
But please understand that:

1. Their customer’s loyalty is nothing more than a habit
2. The switching costs for web services are nil

They are actually missing high-level symbolic associations to their brand now. The current technical proposition is weak in terms of customer behavior and that’s precisely the reason why I believe Microsoft’s $100 million budget for Bing can make more possible then respected search engine experts or great marketers think.

Profitability Is Not A Short-Term Objective, Branding Should Be

A click on a result, organic or paid, is in the perception of the user Google who endorses this specific resource.

Therefore, it would be short sighted to think Google is raising the bar (for example in terms of CPC) to increase their profit. They really do understand that’s not to way to go to survive on the long term.

While Google works on customer lock-in methods by conquering the browser market and developing a mobile phone operating system, I believe they should understand that customer behavior is not rational.
Luckily, you do know though.