Google Buys Ads, Hopes To Sell More Apps
To help spread the word about its online suite of office applications, Google is leasing billboards along major highways in New York, San Francisco, Chicago, and Boston this month. Google’s bundle of business applications sells for $50 per worker annually. Google plans to have a different message displayed each weekday throughout August, starting today.
Google has been selling its applications package since 2007. The company only recently decided it needed a more aggressive sales pitch. As Michael Lock, director of sales and operations for Google's enterprise division in North America, put it, "People don't necessarily think of Google when it comes to how we can help companies." For now, Google has no intentions to advertise the applications in other offline media.
The billboard advertising venture from Google shows just how serious the company is about competing with (and stealing customers from) Microsoft. By contrast, Google has rarely purchased advertising to promote its search engine that was created nearly 11 years ago. Instead, the company relied on word-of-mouth and free media exposure to establish its stronghold in the market.
The tactic has worked well for the company: Google’s search engine generated $10.7 billion in revenue during the first half of this year. Software licensing and Google's business applications are a much smaller piece of the revenue pie, having generated just $365 million in revenue during the same period.
At this point it’s hard to say whether Google’s efforts with the billboard advertisements will pay off. Although it’s easing, there’s still quite a bit of resistance from businesses to adapt online applications and cloud computing—many companies prefer to install the programs on their own computers for security reasons. The good news for Google is that as companies come under increasing pressure to lower costs, they are also becoming more willing to experiment with cloud computing. Google believes its message about the benefits of cloud computing are catching on, and hopes to increase its business sales force by hiring about 100 workers even though the company’s overall payroll has been shrinking lately.