Google uses technology to improve the user experience in nearly all its offerings while making the sale and purchase of ads efficient for publishers and advertisers. The adoption of mobile devices has been increasing. The online advertising market has taken notice and is following its target audience onto the mobile platform. Google partake in this mega-trend on the back of its Android mobile operating system’s growing market share, helping drive revenue growth and maintain Google’s leadership across many internet categories.
Google’s search engine is perceived as being the most advanced in the industry, which allows the company to remain focused on innovation and long-term growth opportunities. Google has leveraged its technical expertise to create its private cloud platform and increase its market share in this space. In the mobile internet space, Android’s dominant global market share of smartphones leaves Google well positioned to continue generating top-line growth as search traffic shifts from desktop to mobile.
Google has a massive consumer base that allows the company to collect data for precision advertising. Google can offer an attractive return on investment (ROI) for advertisers and build a growing network of advertising customers. Through network effects, the addition of each ad and advertiser improves the efficiency of Google’s programmatic advertising offerings, allowing the firm to better monetize the network.
Google has applied machine learning to its Google App, Gmail, and cloud offerings. As technological advancements improve the user experience for each product, the likelihood of further usage also increases. Google’s continuing investment in machine learning should help increase the effectiveness of ad rankings and placements. The monetization of machine learning stems from the fact that technology increases the volume and click-through rates (CTR) of ads. Google monitors real-time search trends, where ad impressions can be purchased in advance. Relatedly, programmatic video ad spending has grown at a healthy rate.
Google holds significant intangible assets related to overall technological expertise in search algorithms and machine learning, as well as access to and accumulation of data that is deemed valuable to advertisers. Google’s brand is a significant intangible asset, as Google has become eponymous with searching. The Google brand as a significant driver of user growth for YouTube, Maps, Gmail, and Chrome. An expanding user base helps the company collect more data and monetize through online ads. As Google has successfully increased its users’ dependence on its products, the company also managed to keep changing the usage of those products to increase the user switching cost.