Kiwi entrepreneurs: In Google we trust

By Anthony Doesburg

If it's potential customers you want, Google has a lot to offer. Anthony Doesburg talks to four entrepreneurs about how the search giant has changed their business

Computer Food's Richard Barnett is one of many Kiwi businessmen who find Google indispensable. Photo / Natalie Slade
Computer Food's Richard Barnett is one of many Kiwi businessmen who find Google indispensable. Photo / Natalie Slade

When Google turned 13 last year there was concern in some quarters that it might become a truculent teen and stop answering our questions.

But any disquiet that we were set for a spell of bad behaviour from the internet's king of search seems to have been unfounded. Google can still be relied on to give straight answers to search queries, which is what millions - if not billions - of users count on it to do.

But while Google has become the standard for information-seekers, for many businesses it has become much, much more.

For many companies, especially those serving a niche market, Google has become the primary way in which they connect with potential customers - even if they happen to be on the other side of the world.

Here are four firms which have made Google an indispensable part of their business.

BOOKABACH - HOLIDAYS ONLINE
Any online venture that denied depending on Google to bring in new business would be lying, reckons Peter Miles, head of holiday home listing site Bookabach.

Bookabach.co.nz has been online since 2000, and now gets about half its visitors from Google searches. Nearly 6000 properties are listed and the site handles thousands of booking requests a month.

The business' reliance on Google goes well beyond search, says Miles, whose original online foray was BachClub, which came along two months after Bookabach. The two sites were soon merged, and in 2007 the AA bought half the business.

"Google brings visitors to Bookabach via natural and paid search; we use Google maps; we use Google's DoubleClick display ad-serving technology; we use its Analytics website analysis tools; and we even use Google code repositories to keep files so we don't need to store our own versions."

"Book a bach" and "Bookabach" are the two top searches that land people on the site. Miles says that highlights a striking fact: that for many people Google is not just a search engine, but has become the interface to the internet.

"People searching for 'Bookabach' know they want to go to www.bookabach.co.nz, but it's faster, easier and more natural for them to type 'Bookabach' into Google and then click on the link Google provides."

Google's dominance is corroborated by the vastly greater number of site visitors it delivers than the next-ranked search engines: Bookabach gets 30 times more Google-generated traffic than it does from Bing and Yahoo!

Miles says during the peak summer months and the winter ski season, the business spends up to 12 per cent of revenue on Google AdWords. Search engine marketing (SEM) is a "bottomless pit", but still worth spending on.

"SEM does work; it's highly measurable and converts to bookings," argues Miles

He doesn't fret about the business' dependence on Google, although he is wary of the US company's ambitions.

"I think where every purely online businesses loses a little sleep is in not knowing 'where will they go next?'. Google can be highly disruptive - and accidentally or intentionally carve whole new paths across industries.

"The obvious example is in the business directory space. Where in the past business directory portals like a Yellow or Finda were strong in restaurant and retail listings, now Google Search bypasses the portals and brings up that information directly."

Google's move into real estate listings, abandoned at the start of last year, is another example of its adventurousness.

"It had to backtrack on direct-listing real estate on Google Maps when it realised how much advertising business it would lose from all the real estate portals," Miles says.

Bookabach calculates it is relatively safe from a similar Google foray because the holiday rental market is tiny. "When it comes to 'owner-managed properties', most owners would have no interest in having their property and contact details show up directly in a Google Search result.

"Also, we're somewhat buffered by the major tourism portals, which spend significantly with Google. So we doubt that Google will ever take on the baches and holiday homes market directly and compete with Bookabach."

And there's an upside to Google's dominance, Miles says: it means Bookabach has just one search provider to deal with.

PONOKO - MAKING MADE EASIER
Wellington internet-based venture Ponoko would still be in business if Google disappeared overnight. However it would be much diminished.

"Do we rely on Google for almost half of the traffic to our site? Yes," says Ponoko co-founder Derek Elley. "Do we spend marketing dollars on our optimisation for Google? Absolutely, yes."

However over the past six months the company has stopped using paid Google AdWords to bring visitors to ponoko.com, as the site is revised to maximise the return on the US$2 ($2.50) each click-through costs the business.

AdWords will again be part of Ponoko's marketing, Elley says, but for now the company is putting money into optimising its site for Google searches.

That effort, for which it pays a consultant, works out at about 0.5USc a click.

It's paying off. In May, 44 per cent of site traffic came from web searches. Of that, 96.4 per cent was Google searches, with Bing, Yahoo! and others fighting for the scraps.

Over the past 12 months web traffic has risen nearly 200 per cent, Elley says.

A good deal of that can be attributed to Ponoko being a pioneer in a fast-growing market. The company, which was launched in 2007, describes itself as having "the world's easiest making system".

Ponoko.com is a service that allows customers to order the manufacture of one-off items by a variety of computer-controlled processes. Users of the service, 85 per cent of whom are in the US, come up with their own designs, or download them from a range of free or commercial sources.

It's a business that was born on the internet, set up with chief executive Dave ten Have after Elley had run and then sold internet marketing agency First Rate. A blog, links on partner websites and PR are also important marketing tools, Elley says, but reliance on Google is greater than ever.

The cost of AdWords soon mounts up for a site with 150,000 visitors a month, making it crucial to turn a good proportion of AdWord-generated traffic into paying customers. But using ponoko.com is not an impulse purchase.

"This is not classic shopping - our business is about people creating and making things. They come to our website and learn about things like 3D printing, then have an idea about what they want to make and go about designing it, then upload the design.

"The sales process between first visit and close is between two and three months long."

From past experience, with AdWords on full throttle, user numbers can be expected to double within three months.

"So the traffic is certainly there, but you pay a hefty price for it," Elley says.

AdWords has the advantage, however, of landing the clicker on the part of the site that is most likely to result in a sale, whereas search traffic arrives randomly.

Having learned that, Elley says, Ponoko is now looking for a designer to fine-tune the site to get the most from AdWords.

BURGIN GUITARS - NICHE MARKET
If it wasn't for Google, Wellington musician Paddy Burgin would be busking for a living.

Burgin is also a luthier, or maker of stringed instruments. Until his first website went up in 2000, he was lucky if he took a single order a year from a New Zealand customer wanting one of the Weissenborn slide guitars or mandolin-like bouzoukis he specialises in.

That was despite his efforts at direct marketing.

"I had a brochure featuring the four or five instruments I had made and I would wander around town until I saw someone with a guitar case, then pass them this flyer." He would also go to see bands and press his card on them during a break.

The clincher was playing one of his own instruments in a band five nights a week, which he thought would have people approaching him to demand to know where he'd got his "really cool guitar".

"I stood there for a year, man, and no one said boo."

A dozen years later, the burginguitars.co.nz website is at version three and the orders, comparatively speaking, are flooding in, mostly from the US.

"My demographic is a 45-year-old man with three or four nice guitars and he's looking for number five," Burgin says. "I know I'm usually number five or six because these people often send me pictures of their guitar collections. They're all lined up on the sofa and there's mine on the far right because it's just arrived."

They stumble across his Wellington workshop by one of two methods: either through a chance Google search for "Weissenborn", or a more deliberate search sparked by a word-of-mouth recommendation.

"The only thing that's out there is my website - I've never advertised." Yet within a fortnight of being online, Burgin had a new customer.

Burgin's prize piece of marketing collateral is a connection with guitarist David Lindley, "right-hand man" of American singer-songwriter Jackson Browne. Burgin says Lindley tours with two of his instruments, which lends the Burgin name credibility among other guitarists.

While many websites go to great lengths to ensure high rankings in search results, he professes a "low-tech" approach to drawing attention to his site. Weissenborn guitars are a sufficiently rare commodity that any search using those words places burginguitars.co.nz in the first few pages of results.

That natural advantage, and an apparently instinctive understanding of e-commerce, are providing Burgin with the 20 or so orders he can cope with a year.

His other tactics to bring visitors to the site - and once there, to turn browsers into buyers - could have come straight out of an online marketing manual. But Burgin has never sought outside help.

He occasionally posts to guitar forums, where he will link to his site, and does the same in video clips of him playing that he uploads to YouTube and tags with the names of slide guitarists such as Lindley and Ry Cooder.

"People who are fans of that kind of music might watch the clip, even for just five seconds, and see my name. I'm just trying to promote myself in a soft-sell kind of way."

He also makes a point of pricing his instruments in US dollars.

"I figure my customer is sitting there on the other side of the world surfing the net with a bourbon in his hand and, when he comes across one of those 'Burgin twangers', he doesn't want to click twice to find the price."

Burgin has no hesitation in crediting Google with keeping him in business.

"If there was a sunspot and the internet collapsed for six months, I would be busking."

COMPUTER FOOD - E-COMMERCE VETERAN
When Pukekohe online printer cartridge shop Computer Food got going, print advertising and flyers were its main promotional tools.

Today, after more than a decade in business, Google brings the business many of its customers and accounts for a large chunk of sales.

"I think we're one of the longest surviving e-commerce sites in the country," says owner Richard Barnett, who bought the company and took it online in 1999.

"All my competitors at the time have since gone. I'm sure there are people who've been around longer but we've certainly been online a long time."

Computer Food, which uses the web address consumables.co.nz, began the shift from print to internet marketing via online directories such as Yellow Pages. But Google has since conquered all.

"Google is the main focus of advertising for most businesses of our sort these days - you have to have a Google presence."

The company uses both AdWords and Google search to bring traffic - and hopefully customers - to its site. But getting a high ranking in Google searches is a challenge, Barnett says.

About half the company's marketing spending ends up in Google's coffers, although flyers haven't been abandoned.

Google dominates not just because it is an efficient way of reaching shoppers for the wide range of consumables - ink, paper, storage media - that Computer Food sells. Barnett says AdWords has built-in power for analysing buyer behaviour that old media can't match.

"You put out a flyer or an ad in the paper and you really don't know how much business you're getting from it, but with AdWords you do. You can see how many people go to your site and how many make a purchase, which is a key difference from more traditional forms of advertising."

Next month, what began life as Google Product Search will turn into Google Shopping, a new service that Barnett says looks like cost comparison site PriceSpy. That spells more trouble for bricks and mortar retailers such as Dick Smith Electronics.

"That model of company will really struggle when more and more people search online; not necessarily buying online, but finding the cheapest prices near where they are, and if that Google service does that it will change New Zealand retail."

About a third of Computer Food's revenue of less than $10 million makes its way to the company courtesy of Google. Microsoft's Bing doesn't register as a significant competitor, and Barnett hasn't considered advertising on it.

He admires Google's "don't be evil" slogan, although he says it's a matter of debate whether it can always claim to have stuck to it.

"I think it's a brilliant slogan - it's a dig at Microsoft, I think. But you need to maintain trust."

- NZ Herald

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_n2 at 22 Sep 2014 21:01:01 Processing Time: 497ms