The wall ahead for Google
Ever wonder why Google is giving away G+ with no advertising?
Google's problem is it is the biggest player in an industry that is slowing down. Consider this — all U.S. digital ad spending is forecast to grow from $31 billion in 2011 to $49 billion in 2015. Great, right? Well, no, because the growth rate
in that forecast slows every year from 20% annual growth this year to only 8.8% growth in 2015. 8.8% is nothing
; it’s about equal to a stock index fund in a non-recessionary year, and investors certainly won’t flock to either Facebook or Google if they only match basic growth. Remember, software was once hot like search, and now it’s given away in the cloud.
Google, which makes most of its billions from search advertising, is really close to becoming another stodgy Microsoft.
Underneath this is the consumer shift to mobile — where Google search is really unnecessary thanks to 1 million apps that find information with one click. So where can Google go?
The ray of hope is content. U.S. advertisers now spend $70 billion on television advertising; U.S. consumers spend more than $74 billion in annual cable subscription fees. More than $144 billion is going into play as consumers shift to consuming content on tablets and handsets, and if Google (or Facebook) can entice consumers to spend time in their social ecosystems for entertainment as well, they could make a lot of that money. (And yes, social media fans, TV is still king — consumers watch 4 to 5 times as much television each day as time spent on digital media.)
Google wants us to start playing in it as a content/search/entertainment ecosystem. When Google+ launched, Google knit together all of its offerings into a tidy black bar at the top of your browser when you play in G+. Social is just one hook, similar to YouTube and Google TV and Google search hot keys on Droid phones, all meant to pull us into the new universe.
As search fades as a piece of the advertising whole, Google will have to grow another pie called content.
(Inspired by +Patricia McDonald
's sharp post about Google+'s dispersed social strategy vs. Facebook's centrist approach: http://www.thesocialpractice.co.uk/?p=292