JYVÄSKYLÄN YLIOPISTO. Google AdWords. Assignment TJTSE50. Heidi Argillander Juha Hakkarainen

Transcription

1 Google AdWords Assignment TJTSE50 Heidi Argillander Juha Hakkarainen

2 Content Cloud computing in general Google AdWords in a few words Transaction costs Operational costs Coordination risks Opportunism risks Value modelling Critisism Conclusions

3 Cloud Computing Eric Knorr and Galen Gruman (2008) 1. SaaS Software as a Service a single application provided through the browser to multiple customers All customers have the same version Customer: no licensing or server costs Provider: easy maintenance Google Adwords as an example

4 2. Utility computing storage and virtual servers access on demand basis Usually non-mission-critical tasks 3. Web services in the cloud Application programming interface (API) provided over the Internet enable developers to exploit functionality rather than fullblown applications

5 4. Platform as as service development environments as a service Cons: constrained by the vendor's design and capabilities Pros: predictability and pre-integration 5. MSP (managed service providers) an application exposed to IT rather than to end-user Virus scanning for s

6 6. Service commerce platforms offers a service hub that users interact with trading environments, such as expense management system 7. Internet integration connect SaaS providers and provide integrated solutions to customers

7 Google Adwords Promoting companyʼs web pages to Googleʼs result page Pay-per-click based Build on top of Googleʼs search engine infrastructure Customer defines key words / frases the content of the ads budget

8 Google AdWords result

9 Google AdWords From the Google point of view Transactions costs (Clemons et al., 1993) Coordination costs Operations risks Opportunism risks Architecture Equipment Process model

10 Coordination costs Internal Data centers and infrastructure (investment costs) IT production costs (variable costs) Service Creation, Communication and documentation External Sales and marketing Customer relationship management After sales services Service use costs 3rd party costs (credit card costs)

11 Operations risk Search words do not match intended ads (ʻlounasʼ for example) Customer does not know the optimal use of the keywords. This will produce negative impact what was expected and the customer will forgo the service. Too many results (ads) for one page If the service is down the business is down

12 Opportunism risks Idea can be easily copied Functionality of the service can be tested and improved by competitors Hacking the system can lead for example leakage of sensitive information (credit cards etc.) Competitors (Bing) can offer more cost-effective similar services Price of the keyword increases too high compared to value of the ad End user can see the link without clicking it

13 Value modelling According to Gordijn et al Google offers Google AdWords for advertisers (endconsumer actors) Value to Google: pay per click revenue, building up popularity Value to advertisers: visibility in search results, open the advertised web site Google offers Google Advertising Professionals Program for professionals and companies (business actors) Value to Google: promotion of Google Adwords Value to them: grow online advertising business

14 ... Advertising Professionals offer to advertisers Value to Advertising Professionals: Value to advertisers: Advertisement consultation services, better visibility in search results

15 Critisism Critisism from the advertiser point of view the potential value of a click hard to define don't know how many people coming to site will buy Visibility Use of common or vague keywords competitors open to abuse through click fraud results are faulty related to search words Critisism from the advertising professional point of view Strict conditions (and they may be changed freely by Google) Google may cancel or modify these Rules or the Google Advertising Professional program at any time for any or no reason Google is not obligated to anything (not a business venture)

16 Conclusions Variable costs are low compared to fixed costs Low asset specificity Value modelling applies fine to Google AdWords compared to process modelling

17 References ClemonsReddiRow.pdf (2. chapter) TJTSE50_Syllabus_files/EECS pdf