In the space of just a few short years, Google knocked Microsoft off its throne to become arguably the world's most powerful - possibly the most feared - technology company with involvement in a vast array of different areas. The company describes its mission as "to develop services that significantly improve the lives of as many people as possible". To that end it has built upon its core offering to spin out a kaleidoscope of additional services, ranging from global mapping and Android mobile software to healthcare research and driverless cars. Uniquely, for now at least, virtually all its add-ons are free to use, paid for by the awe-inspiring success of the company's advertising programme. Google may not be the world's biggest online company by revenues (that's still Amazon) but it's the most valuable by far with a market value of over $460bn by mid 2015. Yet Google's position at the top of the digital advertising tree is under threat from an even faster-growing business, Facebook. At the same time, its steps into hardware development have so far been patchy. In 2011, the group took steps to monetise Android by acquiring one of its first licensors, US handset manufacturer Motorola. Less than two years later, though, it sold that business on to Lenovo of China after failing to boost performance. Its Google Glass computer-powered eyewear also failed to find a ready audience. In 2015, the group announced plans to restructure, splitting out its more fanciful research-based operations as separate units under the umbrella of new parent company Alphabet Inc.
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Adbrands Weekly Update 30th Aug 2018: In his latest attack on the "Fake News" media, President Trump accused Google, Facebook and even his own beloved Twitter of suppressing conservative voices in favour of left-wing negative criticism of his presidency. "In other words, they have it RIGGED, for me & others, so that almost all stories & news is BAD. Fake CNN is prominent.... They are controlling what we can & cannot see. This is a very serious situation - will be addressed!" Later he told reporters that the sites were "treading on very, very troubling territory" and warned "They better be careful because you can't do that to people." Google denied any political bias. "We continually work to improve Google Search and we never rank search results to manipulate political sentiment." Renowned tech journalist Kara Swisher summed up the state of affairs neatly in a solid op-ed piece for the New York Times: "Here’s the truest conundrum of the social media age: Those who complain loudest about being silenced never ever shut up."
Adbrands Weekly Update 2nd Aug 2018: Results from Google parent Alphabet were impacted by a $5bn charge to cover its recent fine from EU regulators. As a result, net income slipped 9% to $3.2bn. However, excluding that one-off charge, earnings were well above analysts' expectations, as were revenues, which hit a new quarterly high of almost $32.7bn, up 26% year on year.
Adbrands Weekly Update 19th Jul 2018: The European Union's competition commissioner Margrethe Vestager slapped Google parent Alphabet with a record €4.3bn fine for exploiting the ubiquity of its Android mobile software "to cement the dominance of its search engine". The new penalty comes a year after the EU fined Google €2.4bn for promoting its own comparison-shopping services over rivals, and another investigation is still ongoing over the Google AdSense ad network. The latest fine represents around 40% of Alphabet Inc's 2017 profits, but more damaging could be future restrictions imposed on the bundling of the company's software in new mobile phones. Currently, as a condition of offering their customers access to the Google Play download store, phone manufacturers are obliged to pre-install multiple other Google apps including the core search engine, the Chrome browser and YouTube. That allows the company to collect vast amounts of customer information to feed its advertising program. The new EU ruling removes those restrictions. "Evidence shows the vast majority of users simply use what comes with their device and do not download competing apps," said Vestager. Her ruling also gives manufacturers greater freedom to pre-install their own customised versions of Android based on open-source software rather than the official Alphabet-supplied version. Amazon, for example, uses its own Fire OS version of Android on mobile devices. This provides access to its own download store rather than Google Play. Alphabet has 90 days to comply or risk further fines of up to 5% of its daily global turnover. It said it will appeal the ruling.
Adbrands Weekly Update 21st Jun 2018: Google has agreed to invest $550m in China's second largest ecommerce company JD.com, whose other backers include social media giant Tencent and Walmart. Google also works with Walmart in the US to offer online shopping via the voice-controlled Google Assistant AI system. Google's investment is equivalent to less than 1% of JD.com's equity but it cements an important alliance against local leader Alibaba. Of particular interest to Google is JD.com's tech-based delivery systems. It is the first company anywhere in the world to operate a drone delivery system, with a fleet of 40 machines already serving 100 villages in rural China. Amazon plans to use drones for deliveries as well, but that service is not expected to launch until 2020. Separately, JD.com reported record sales of $24.7bn in its 6.18 shopping festival, a rival to the 11.11 festival organised each year by Alibaba. That total was only narrowly behind the $25bn that Alibaba reported last November, but spread over an 18-day period.
Adbrands Weekly Update 31st May 2018: Technology brands continued to dominate in the 2018 edition of WPP's annual Brandz ranking, compiled by Kantar Millward Brown. Google still holds the top spot with a valuation of $302bn, up 23%, but Apple is closing fast with a 28% rise to just under $301bn. Amazon overtook Microsoft for the #3 spot, but both are still around $100bn behind the two leading brands by valuation, while Facebook was #6 on $162bn. The biggest change among the Top Ten was the arrival of of China's twin internet giants Tencent and Alibaba, ranked #5 and #9 respectively for 2018. Another Chinese brand, ecommerce company JD.com was the single biggest riser among the full Top 100 with an increase in valuation of 94%, though it remains for now way down the overall ranking at #59. There was also a big increase for Chinese alcoholic spirit Moutai, as well as the more familiar Paypal, Netflix and Gucci. New additions to the Top 100 included US cable company Spectrum, Uber, Instagram and another Chinese brand, courier company SF Express. The combined value of the Top 100 brands jumped by an astonishing 21% - its biggest ever increase - to $4,400bn. Download the full report at Brandz.com.
Adbrands Weekly Update 26th Apr 2018: Google parent Alphabet tightened its chokehold on every other rival media outlet (except Facebook) with another stellar quarter in which advertising revenues jumped by an extraordinary 24% to $26.6bn. That's the fastest growth since 2011; though only slightly above the 21% and 22% reported in the last two quarters. It's the sort of increase that magazines, newspapers, radio, TV and even other online properties would die for. And many in fact probably will. The group's non-Google "other bets" enjoyed a rather more modest 14% increase in revenues to $150m. Total revenues jumped 31% to $31.1bn, and net income by an extraordinary 73% to $9.4bn. Costs were also up sharply - by 35% - putting considerable pressure on operating margin, but that negative factor was offset by a much lower post-reform tax charge as well as around $3bn of gains on investments including shares in Uber. The biggest increases in spending were in areas such as cloud computing, the "OK Google" AI assistant and hardware devices like the Pixel smartphone, suggesting that the group is positioning itself to reduce its dependency on advertising, which currently accounts for almost 86% of group revenues.
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