Is Google on the Decline in Australia?

James Lawrence: Welcome back to the Smarter Marketer Podcast. I am joined today by the Smarter Marketer resident in house marketer, Kayley Melham. Kayley, welcome back to the Pod. 

Kayley Melham: Thanks for having me. 

James Lawrence: Now we’re back on the pod because our first pod together is the number one ranking Smarter Marketer podcast of all time. We thought we'd make this a bit more of a regular occurrence. Let's see if we can do it even better this time. 

Kayley Melham: Outdo our first one. 

James Lawrence: 100%. So the reason this podcast came about is that we were having a really good and in depth discussion in the office last week and it was all around basically; Is Google on the decline in Australia? Which seems like a kind of controversial viewpoint, but probably for the first time in 20 years, it's a question that we probably need to ask. And I think as marketers out there, I think I do want to know where the platforms sit. And we've kind of got obviously, the huge stepchange of ChatGPT that we've seen since the back end of last year. We've got the absolute rise of Amazon, no doubt about that. Something which I think has snuck up on the community is the rise of search in social and users bypassing search engines altogether, and using social media as the way that they actually search for products and services. So we had a really good, interesting discussion with a bunch of the team. Someone said, hey, this should be a podcast. So we've done more digging around to get some meat on the bone. So Kayley, I'm going to throw it over to you to put me in the hot seat, but let's make this a discussion.

Kayley Melham: Awesome. I think the first place to start really is the history of Google; kind of from its inception in Australia to where it is now. 

James Lawrence: We'll do this super briefly, but this probably shows my age a little bit. When I was at university, I was running an internet marketing consultancy and it might sound unbelievable, but at the time Google wasn't the kind of preeminent search engine in Australia. We were kind of doing very rudimentary SEO campaigns and some very different pay per click campaigns at the time. Like Google was in the mix for sure, but there was Looksmart, which was a big Australian search engine at the time. Microsoft has always kind of dabbled in the space with having search engines. There was Ask Chiefs and a whole bunch of other ones. And basically Google took over the dominance of search in Australia as it kind of has throughout the English speaking world. The stat on Google is that it has higher penetration in Australia than it does in any other market around the world. And we've kind of seen over that period, the rise of Google search. We've seen advertising plowing into the Google AdWords as it was then, into the Google Ads as it is now, moving away from Yellow Pages, moving away from TV. 

James Lawrence: No exaggeration to say that Google probably has 95%-97% ownership of the search engine space in Australia, where in America they'll kind of talk 80/20 between being in Google. We've never seen anything less than kind of 94%-95% with Google looking at our clients. Sometimes you look at sales decks from being in Google and they'll talk about maybe a 90/10 split just depending on the data you're looking at. But I think a lot of that's been driven by the platform's interests. Google kind of doesn't want to be seen to be a monopoly. This is a worldwide thing because it potentially puts them under more scrutiny with kind of regulation. Bing likes the idea of having a bigger market share to go out and kind of sell ad space. So it's kind of been just a one horse race for so long. Google had its attempts of building out a social media network in the late noughties, didn't work, fell to pieces… They've never been able to buy a social media platform.

Kayley Melham: Which is so interesting when you actually think about it. I had no idea that they tried to introduce a social media platform.

James Lawrence: I think it was Google Wave and then it got rolled into a different product and just obviously the rise of Facebook kind of in the mid to late noughties was seen as; what's eyeballs, impressions and how do we play in that space as well? And they could never nail it. They've obviously put a heap of effort into YouTube as a kind of growth engine to compete with TV to get eyeballs and it's been tremendously successful. But Google Search has been to a large extent - don't want to say one trick pony - but it has been the absolute kind of 80/20 for the company. I think the last data I saw was that Google was about $54 billion of turnover, and a quarter of that was search ads fundamentally. But it is very much search driven. Yeah, and I guess over that time, we'll jump into it later on in terms of social and whatever else, but it has very much been a landscape dominated by Google. If you look at all the graphs of increase in usage, increase in ad spend, it's just this beautiful kind of high growth curve for Google and they're still growing. Google Search ads is growing. I think it'll be interesting to look at data from the last twelve months as to whether that is still the case and it's still a complete behemoth. So we're not trying to suggest for a minute that Google's over and it's a flash in the pan, but there's serious competition for the space now, and I think let's dig into that because I think it's something that marketers need to know about

Kayley Melham: Yeah, well, I think jumping on from that is your perspective on the search dynamic in Australia at the moment and what the different kind of parties involved in that are. 

James Lawrence: Yeah, I think the first one to talk about is Amazon. Right. So Amazon has been a complete behemoth in the United States for a very long time. 

Kayley Melham: Absolutely. 

James Lawrence: You jump back ten years and at that time, Amazon was already part of the fabric in the States biggest retailer, putting huge amounts of pressure on traditional retailers like Walmart. It's had a much deeper cut through in Europe, in countries like the UK, than it has in Australia. And Australian ecommerce, up until probably the last couple of years, was always viewed as a complete laggard, where the things that were happening in the US and the things that were happening in the UK in the ecommerce space, they would look at Australia and kind of just say, it's a backwater. And part of that is a very small market. You're dealing with a market of 255 million versus a market of close to 300 million or 50-70 million in the UK. Part of that is just the vastness of the land where. The population is so spread out, logistics are difficult, so it became a very difficult place to kind of come into. So you'd stick to your strengths there. 

James Lawrence: Amazon, we do some work with them. So kind of just talking from the outs, what we see publicly and making that clear to listeners, there's no conflict. But Amazon's clearly come in very aggressively into the country in recent years, and this is all public information. The intent isn't to kind of be where they are now. The intent is to be at a similar place in Australia as to where they are in the States and in Europe. And if you look at the stats out of the US, Amazon plays a more significant role in the path to purchase in ecom in the States than Google does. I think it kind of depends on the survey and emarketer, which is a really legitimate research house, this is data from May 2022, saying that 61% of US consumers start their search in Amazon and 49% are using a search engine. Then it jumps down to Walmart 32%, YouTube 20%. What I do want to talk about is Facebook, 19%, Instagram, 15%, and TikTok, 11%, which we'll talk about a little bit later on in the pod. There's a really good article in MI3, which I think we'll link to in the notes to the pod, which is on a similar topic to this. And they were kind of saying that by 2030 what was the stat, Kayley?

Kayley Melham: Do they’re saying that by 2030, Amazon will capture a quarter of Australian ecommerce. 

James Lawrence: Yeah, which is huge. It's huge. But to me that seems highly conservative when you look in the States. And Search Engine Land was saying last month, so May 2023, Amazon was roughly 50% of online retail in the States versus Google kind of driving 31%. I just don't think that we get to 2030 and Amazon sitting at 25%. I just see it playing a much more significant role like that. So if you're selling a product, if you're not using Amazon at the moment, you're kind of going to have to be basically within two, three, four or five years. So I think consumer behavior will change and talking before recording, and it's a sample of one, but it's essentially how I do pretty much all of my online shopping now - with Amazon. You don't, which is interesting, but that's just preference. And the stats don't lie internationally and I suspect they won't lie locally. And with Amazon, you have all the big studies in the States talk about not only the numbers there, but you've also just got trust. So it's just it's a bit different. It's a more contained ecosystem. So being there as a seller, you kind of have the credibility around trust, delivery logistics, which can sometimes not be there if you're kind of buying direct outside of that network. So I think just in terms of this conversation, the genie's not going back in the bottle on Amazon. So I think if you're in the space where you're selling and you're not starting to take that seriously, then you kind of need to. That would be my perspective on Amazon and Ecom. 

Kayley Melham: I think jumping forward, we'd be silly not to discuss Chat GPT and the kind of impact that that's having on Search. And I think there's a lot of fear around that over the next few years and what that's going to look like for businesses in terms of creating content and whether they are going to get as much traffic to their website and whatnot. So would be keen to hear your thoughts on that one. 

James Lawrence: It's a really interesting one and there's kind of two sides to that coin right there's. Probably less relevant to this conversation is the impact of ChatGPT on us as marketers, on our jobs and what we do? Are there things that will now become automated that previously a person in our team, or we ourselves, used to do as digital marketers? Running an agency like us, obviously we're starting to create content, do research, content briefs, a whole bunch of stuff we're doing through ChatGPT or through Google Bard. We're pre, obviously, that was toil and hours, so I don't want to talk about that. I think that's more about AI's impact on us as professionals and white collar work. And that's not just us as marketers, that's a whole bunch of different industries. But that's one side of it. 

James Lawrence: I think the side of it that is more interesting to this conversation is what impact ChatGPT as a place, where people go to find answers to questions and problems, where they once would have turned to Google. And that is something which probably needs a crystal ball to some extent. But the message to market as is, it's starting to happen so fast moving and it's really hard to get data. The two studies that I've seen, it's hard. The space is so fast moving. The studies themselves weren't huge. They were kind of I think one of them was a couple of thousand respondents and one of them maybe just a little bit bigger than that. That one through Finder was saying that 3 million Australians were using ChatGPT as of March 2023 and the other one was saying 25% of adults. So it's a huge volume of users that some of them may have been running admin tasks and helping them do their job, whatever else, but I think it's safe to say that a good chunk of those users would now be using ChatGPT to find the answers to questions that they once turned to Google for. 

James Lawrence: I think, almost useless to try to predict what happens in that space. Google has rolled out Bard, which is the equivalent to ChatGPT's product. We've got Google at the moment in beta in the States with Google SGE, which essentially is Google's equivalent to what the ChatGPT / Microsoft Bing integration has been in the States. The stuff internationally, which is bigger in terms of sample size and data, is saying that the early signals in the US and Europe aren't actually seeing much of a change in users' behavior in Google. There’s maybe a slight plateauing, but definitely not a huge drop off that can be attributed to what we're seeing with people turning to AI.

Kayley Melham: I think kind of food for thought, but something that I found really interesting, and this is popping up so much on TikTok and Instagram for me, is the way that people are using ChatGPT now and turning their answers into specialists. So you can actually go in and code it and say act as an IT specialist or act as a travel agent who is specialised in this particular area. And so you can kind of have those conversations and ask very specific and niche questions and get those answers. But I think an opposing thought is how many people actually know how to brief it properly to get those results. And unless you do, you are going to be turning to Google to get those answers.

James Lawrence: That's it for me. This isn't ChatGPT is going to kill Google or Microsoft, because of the integration with ChatGPT is going to beat Google because Google doesn't have enough AI. Smarts and devs. The reality is that Google has had AI in that organisation for almost 20 years. They've got a huge team, they've got deep pockets. It is a war, it is a battle, it is happening. I suspect that given Google's ability, kind of it's proven over the last 20 years that it has the smarts to move products in a way that people want to use them. So I don't want to be unnecessarily controversial on this, but I think what we don't know as marketers is what impact of this. 

James Lawrence: And my personal opinion is this will transform voice search. I think we've voice search similar to the smartphone where for probably five, six years before the iPhone, people tried, never worked. It was always, it will happen, it will happen. And then finally Apple nailed it. Similar thing with voice search. I think ‘next year will be the year of voice search’ has kind of been the thing that's been said for the last ten years and it never really has been. I think we'll find that AI virtual assistants, it will transform the way that we interact with technology to get answers to questions. So for me it's more of a watch this space, but it is so fast moving that if things move in a particular direction, we have to, as marketers, realise that the way that potentially our customers or prospective customers went about their research journey to find someone like us, it's going to be very, very different. So I'd be very cautious of that and definitely trying to educate stakeholders, C-suite, that we're not yet seeing a transformation with the way that users are searching for someone like us. But we're keeping an eye on it and I suspect it'll hit different sectors differently. Right? 

Kayley Melham: Yeah. And I remember reading an article, for the life of me, I can't remember what it was, but it was kind of saying that with every big technological advancement, things move slowly and then all at once. And I think we're kind of in that slowly stage, so it'll be interesting to see what happens when it hits all at once.

James Lawrence: 100%. But the idea that it's not going to impact things is pretty much fanciful now. So I think if you're not kind of on board with it being the direction things are going, you probably need to be. 

Kayley Melham: I mean, when you speak of certain industries, I'm Gen Z and I completely bypass Google when it comes to things like searching for restaurants, searching for things to do in the Blue Mountains, things to do in Sydney. I turn straight to TikTok, that's the first place that I go. I don't even consider Google for things like that. And I think that social is playing such a huge role, especially in Gen Z. But throughout all kind of demographics and searches, so keen to hear your thoughts on social and especially TikTok.

James Lawrence: I actually think this is the big one. Amazon will continue to grow. If you're an online retailer working in ecommerce, I think you know that and you'll steep up, you'll move a bit of focus there as buyer behavior changes. The AI impact is one that we don't really know and it could be flash in the pan and Google will integrate it so well into all its product stack that we're still using Google just in a slightly different way. The social one is not the case. So I think it's really interesting. When Google became the dominant player in digital, Facebook kind of had that period from probably the late noughties into the mid 2010s. Instagram social at the time was social. It was very much kids connecting with friends, family. Then Mum and dad got on it, and then it became a way of staying in contact with friends and family overseas. We would like and engage with brands. Probably was stronger on the publisher side where then we started to get users as our source of news. Still very much social; was socially led, would see things from our connections. 

James Lawrence: We then started to advertise as marketers. We're like well there's eyeballs there, we can do it. Great targeting, let's get some ads in there. Instagram kind of took off. More visual probably to a slightly different demographic, slightly different type of brand, consumer engagement, more visual type thing, lots of eyeballs. But there was kind of almost this nice relationship between Google for search, social as a way of keeping in contact with friends, don't mind getting advertised to and that was kind of where things are at. What we're seeing now is very different to that, and it started with Snapchat. Snapchat probably isn't the growth engine that it kind of appeared it would be. But you look at TikTok now and it's a step change, it's a step change in terms of how it presents itself and how users engage with it. We had TikTok come out and present to Rocket and they unashamedly said; ‘we're not a social media network, it's just not what we are’. They say; ‘we're an entertainment platform and it's what they are’. 

James Lawrence: And the algorithm is so compelling, it's so powerful in serving up content that we as users are interested in. The time spent in platform is staggering. Like the numbers that they presented to us, I think it was 110 minutes per day average user would stay in platform in TikTok. The numbers in YouTube I think were around 67 minutes around the hour mark. So not quite double, but a lot more. And then Facebook and Instagram much less than that in terms of time spent in platform. You then kind of couple that with the fact that it is huge in terms of Gen Z and that younger demographic. But the numbers that came out last month were, I think it was around 6 million Australians are now on TikTok, which is just a huge stat right in terms of growth in a really short space of time and why that matters for us as marketers is that the pattern has changed where in TikTok, we're not really as interested in the content we're getting from friends and likes and people on holidays and baby photos. We're getting served up content but we're also now starting to search for content through the platform. I think it'd be interesting for you to kind of share the anecdotal - once again sample of one, so this isn't indicative of everyone in Australia's behavior - But I think it's interesting, the one you shared of your friend. 

Kayley Melham: Yes. I had a friend that just came back from Europe, and her exact words were, ‘TikTok was our Google’. And they just searched on TikTok; ‘restaurants to eat in Monaco’, ‘10 things to do in Sicily’. And that was how they found their itinerary. That's what they used to determine what they were going to do. And because it is visual, you're not having Google say, here's this place, you're literally seeing all of the videos play out, you're saying, that place looks amazing. Look at how cool this is. And it's kind of the same for a lot of instances. I mean, I saw something on Instagram a few weeks ago that said, really cool thing to do in Sydney. And I did it with my friends last night. Saw the video, said, hey guys, let's do it. We all went. And it was a group thing that we did. But that's what it is.

James Lawrence: That's it. And you see the rise of the platform. There's a really interesting quote from a Google, and I'll actually read it out. I've got the note here. Prabhakar Raghavan, a Google's senior vice president, said at a technology conference in July, I think it should have been last July, 40% of Gen Z prefer searching on TikTok or Instagram over Google. So that's in a New York Times article, which is titled, For Gen Z, TikTok is the New Search Engine, which goes into some detail, and it kind of mirrors what we're saying in that in certain categories. If you're looking at restaurants, if you're looking at recipes, those types of categories, TikTok is becoming a very interesting place to play and definitely cannibalising volumes within Google. So I think it'd be very naive to not look at user behavior within TikTok as something that we need to pay a lot of attention to, I think.

Kayley Melham: An interesting point also, and this has been brought up a number of times on the Pod, whether that's B2B or B2C, whatever type of business you are, the importance of referrals. And I know that we did have that episode with Sharon Smith on influencer marketing, but when you look at Instagram and TikTok, if you're watching a video and someone says go to this restaurant, it's amazing. You go in the comments and there's 300 comments of everyone else saying it's amazing. That's kind of a referral in and of itself. It's kind of a different way to get that trustworthiness and have those ideas shared.

James Lawrence: 100%. That's the beauty of the platform, right? There's a couple of things going on there. One is video, right? So the whole thing, a picture tells 1000 words and what does the video tell then? It does just cut straight through. Right? It just very quickly allows you to kind of be more into that experience. The nature of the content being created. Well, the nature of the content that works on the platform. It's snackable, it's fast paced, it very quickly cuts to the chase and then it contains exactly as you said, right? It's got those social proof elements. We're kind of seeing it. So the reality is that social search is now a phenomenon. And depending on the category you're playing in, you need to be looking at where your potential customers are. And it's classic old marketing; right message to the right person at the right time. But the space has changed and like all of these platforms, it starts off with the kids, as Facebook did, as Instagram did, as Snapchat did, and it then changes. And it won't be long before Mum is on TikTok. We'll see if she's listening to the Pod, she might already be. 

Kayley Melham: Well, when the TikTok rep came out and kind of discussed the demographics of people on TikTok, they said that the idea it's just young people on TikTok is not the case. I mean, there's different sides to the platform, but it's definitely not just 18-24 year olds. Good to get clarity around as a marketer, what can I be doing today? So there is lots of things that we know are going to be changing in the future and lots of developments that will occur and changes to the space. But what can we be doing today? What channels or activities are valuable for us to do to get the most out of right now, but also plan ahead for the coming years? 

James Lawrence: Yeah, it's a great question. We kind of talked at the beginning of the pod about this not being deliberately controversial or deliberately inflammatory. And it's definitely; don't panic. I often push back really hard when people say SEO is dead, because I've been hearing it for the last 15 years. And if clients had done it or if I'd believed it, they'd be in a much worse place. Like, the reality is that Google still pushes roughly half of the traffic around Australia every day into websites. And there is still downside in social media platforms, you're very much locked into those ecosystems. You don't get people to your website. You kind of get less first party data so the numbers don't lie. And you need to look at - we've got a very diverse range of listeners to the pod - you need to look into your vertical and your market, what's the user behavior look like, and is it changing, and it may well be? And if you're in ecom and you haven't yet looked at Amazon, then you probably should be. If you're in hospitality, if you're in events, if you're in travel, if you're in certain areas, you probably should be playing around with TikTok if you're not. But does that mean that you should abandon your entire Google strategy? Absolutely not. 

James Lawrence: Right, so things are changing. That's part of the beauty of the space we play in. But I think for me, the purpose of the pod is to effectively communicate the kind of more macro trends, because I think it is easy month to month, month to month. Well, if we are seeing a decline in Google, is it because our search engine is not doing a good job? Or is it simply there's a rise in zero click searches in our space? Or because actually users are now turning to different platforms to find answers to those questions and problems. So for me, it's very much know the reason for listening to the pod is to maybe just take some time to actually think about it and look into it. Like, are our best prospective customers still playing in Google? Or actually might they be looking at getting answers through an AI platform like ChatGPT? Or are we skewing younger? And are we finding that we're getting a bit of anecdotal feedback that our TikTok thing isn't performing? Those are the types of questions that I'd be asking and I'd be arming myself with information to effectively communicate this to stakeholders in my organisation. Because you want to be ahead of the curve. You mentioned it earlier. Which is I don't think you want to be at the bleeding edge on a lot of this stuff. Like sometimes there is first mover advantage, but a lot of time there's not. So I think I wouldn't be rushing to move all my budgets out of the things that have worked into stuff that might. But we're big believers at Rocket of having a test budget on stuff. So if it is spending a 10% budget for the next three months testing something that you think will work, whether it's Amazon or whether it's TikTok, then I'd be a big advocate for that.

Kayley Melham: And I think it does come back to strategy. In what you were saying before; reviewing your buyer personas, what's their sales journey? What touch points do they have with your brand or with products or with services that you're offering? And are there spaces that you're not playing in that you could be; have that test, see the opportunity there, maybe trial it for two, three months? Is there opportunity or is it just not working?

James Lawrence: 100% and have an open mind? Right. I think it's very easy to dismiss things like Snapchat and TikTok as being a kids platform, but it's just not the case anymore. And I'm glad you raised it, which is the reality that the demographic data that we last saw was, I think I know they're actually mentioning certain demos being the fastest growth areas within TikTok, and they weren't the young kids anymore. The young kids have already jumped on there and there is this explosion of content for much older demographics. I think just bring an open mind to it and definitely businesses out there that are marketing B2B through TikTok. So that'd be an interesting thing to explore. 

Kayley Melham: Yeah. 

James Lawrence: Awesome. Well, Kayley, thanks for coming back onto the pod. We'll have to do it again sooner rather than later. 

Kayley Melham: Absolutely. Thanks, James.