Competing with the best

Microsoft’s sales plummeted, so in an aim to recovers its revenue they made a deal with Yahoo to try and compete with the Google search engine.

Microsoft and Yahoo created their own “decision” search engine called Bing unveiled in May 2009.

Yahoo and Microsoft make a deal.

Yahoo and Microsoft make a deal.

According to the Financial Times, Microsoft would take on the costs whilst Yahoo would work on attracting consumers.

Another big partnership came when Nokia’s market had declined by 47 percent in 2009, so Nokia decided to partner with Microsoft. This amalgamation would create the Nokia E series which will incorporate Microsoft’s Office Mobile into its phones in order to compete with Google Chrome.

Although this does not tie directly into businesses, this alliance has been talked about and cannot be ignored. It also brings up the topic of competition and how a company, digital companies as well as other types of companies, should deal with competitive markets.

Although competition for Google is good, especially as a consumer it produces many questions.

Competition is important

Direct competition exists where organisations produce similar products that appeal to the same group of consumers. For example two corporations sell the same type of software.

Meanwhile indirect competition refers to when different companies make or sell items which although not in head to head competition still compete for the same customers and their money.

Both these types of competition are vital for businesses and consumers as it ensures that prices are not fixed. It ensures that companies are continually innovating and progressing in order to attract a wider market.

If one company reamins dominant, there would be no substitutes for any products and this would not enable the digital financial markets to flourish as a whole.

And while it is good that Google has the potential competition from two large corporations that do have the potential to compete with Google, how beneficial to consumers is this?

Larger risks
And as we have spoken about the benefits of Google or other monopoly corporations, there is a danger for big companies in trying to become bigger. Larger companies that employ more staff and have an extended reach across borders were affected more adversely by the recession.

For example, the Independent Media Corporation, although not only affected by the recession but other factors, they were left in debt. The Independent News Media owns 430 titles across the world, but lost most of it value and was immersed in 1.4 billion euro debt. They have more titles, more staff and other assets which they need to maintain.

In brief Big Company equals More Assets, resources and larger Markets equals more at Risk.

Risks such as that of stagnating instead of innovating, risks that another market or trade can be decline and directly effect the company.

International bank Barclays was also bad affected by the recession.
I came across an article by Larry Dignan, Sam Diaz, Andrew Nusca concerned with Microsoft search deal risks becoming AOL.

The article says
“Does Yahoo need to own the underlying search technology? Possibly. The biggest risk to Yahoo is that it becomes AOL, a company that’s a gateway to the Web yet a step behind. A company that owns vertical categories such as finance, news and sports, but little else. A company that doesn’t own any content. And a company too dependent on third party technology for a big chunk of revenue. AOL’s search fortunes are hitched to Google. Yahoo’s search bounty will be tied to Bing.”

Conglomerates risk losing their independence and previous structures that held them together. Convergences are important, but it does jeopardise other aspects of the company.

TIP: Think before you Ink.
Consider the negatives and positives aspects of making a deal or amalgamating with another company before making a fixed deal.

 

Look out for how to compete with other businesses that are similar to your own without overstepping the copyrights and other legal boundaries in business.

Wordplay

I mentioned previously eMarketing. One of the ways to market your product or service online is by using Google advertising and one of the forms of advertising is Google Adwords. This post hope to give you simple step by step instructions to get started on advertising online.

Google Adwords was launched in 2000 in order to keep up with the changing face of the economy and of advertising.

The Google search engine identifies words that have been used in the search engine query and then brings out a list of results relating to the keyword typed in. Google uses algorithms to search the indexes of various sites and picks out the words.

This is useful for marketing as the search engine picks up the words used in your advert. For instance, if you are selling insurance and a person queries the word ‘insurance’, your advert will come up in the sponsored list next to the search results. This however, is dependent on the ‘Ad Auction’ and whether or not you bid the high enough for the keyword.

Starting out

1. Get an Adwords account.

2. Before choosing your keywords, it is important to know what your market and where they are located. Thereafter you can choose what type of campaign would be most beneficial your company or product or service.

There are two types of campaigns: a keyword targeted and site targeted campaigns.

 A keyword targeted campaign refers to a campaign which enables the user to access to the advert when they type in certain key words in the search engine. Again, this depends on how high you have bid for the keyword in the first place.

A site targeted campaign means that your campaign can target people in specific areas. For example if you offer a service in Johannesburg, then your advertising campaign will be useless in Japan as they cannot use your service. Therefore, you would target customers from Johannesburg and surrounding areas as your market lies in those areas.

3. Choose the type of advert you would want to place in your adgroup, for instance would a text advert, an image ad or video ad be more effective for your company. Thereafter choose what you want the advert to say. If it is a keyword campaign, decide what words will trigger the advert.

Pricing Models

The pricing model refers to the payment currency and the way you choose to pay for the advertising used and viewed. A business may choose from paying for CPC or Cost Per Click, which means that you pay every time a user clicks on your advert. CPM or Cost Per thousand views means you pay only after a thousand impressions have been made. CPA is the cost per acquisition which implies that only after the advert leads to the user purchasing or using the product do you pay for the advert.

The pricing model also allows the business to decide what your monthly budget will be and subsequently prevents you from overspending on your budget.

 Adwords Auction

Adwords Auction refers to bidding for a keyword.  Other advertisers might want the same keyword, so in order to gain the top position on the search list; you should have a quality advert, great keywords and must have bid higher than the next advertiser for it.

Google considers the higher CPC or cost per click and CTR or Click through rate when deciding which advert is the most relevant to show on the search list. If your maximum Cost Per Click is higher than the other advetisers, then your advert will appear higher on the search list.

There are numerous other things to consider when setting up your Adwords account, so be on the lookout for more tips on optimising your campaign.

TIP: Explore other areas of marketing such as Search engine marketing (SEM) and search engine optimisation (SEO).

A note of thanks to Marketing and Advertising Using Google by Google (2007) for this information.