Glass – Google’s Biggest Opportunity And Challenge
Much has been said and written about Google Glass over the last months. It was also one of the topics at this week’s Contagious Now / Next / Why event. Glass was presented as part of the ‘Beyond screens’ trend, which is looking at the post-mobile era and asking the question of what new interfaces mean for brands creating marketing content? The interest behind Glass is understandable as it is the biggest innovative leap from Google launching a market-ready consumer product. It challenges the way we think about interfaces and what the future of interacting with technology might look like. What hasn’t been really discussed in much detail however, is the impact Glass might have on the future of Google’s business. I tried to look at Glass through the strategy lens: It has strategic importance and might leverage all of Google’s innate competitive advantages at once.
Glass epitomizes Google’s biggest opportunity and threat at the same time. While the opportunity lies in using Glass to further leverage Google’s advertising model, the threat will be around privacy issues. It looks like Google’s biggest challenge will be to drive adoption and trust at the same time. User trust and advertising revenue are both crucial for Google’s future success – and both are depending on each other.
How to bake competitive advantage into the ecosystem
Google has made it quite clear that Glass will not be used for advertising. However, looking at the core of Google’s business model and the way Google is pushing Glass at the moment, it seems unlikely that this is the long-term plan for this new device. Glass makes best use of Google’s innate competitive advantages. The core of Google’s business model – the search engine and the original PageRank – had an innate competitive advantage from the very beginning. “PageRank has the benefit of learning from the whole of the World Wide Web.” (Larry Page in Levy, 2011, page 22) ‘For most of the early search engines, the rapid expansion of the web was a problem, a drain on their resources.’ But because of the original PageRank algorithm, the quality of the search engine gets better as the web grows. That basically means that Google has an innate competitive advantage baked into their business model. Their core product gets stronger the more complex the web gets.
Google has done this in many other ways since they launched the company in 1998 and extended this principle to other key areas of their business. The way they embraced cloud computing and mobile led to pressures on their main competitors (mainly Microsoft and Apple) reacting in ways that helped Google. They create a service based around a great user experience, users adopt it, competitors react and by doing so increase Google’s advantage. This dynamic is brilliantly described by Steven Levy in his book ‘In The Plex – How Google Thinks, Works and Shapes Our Lives‘ – “What was good for the web, the cloud, mobility – was good for Google.”
Google has created an ecosystem of devices and services. Glass could bring all of this together. As the Glass Product Director Steve Lee says in this video – “Building an ecosystem around this is very important to our strategy.” I think Glass has the potential to become the centre of the existing Google ecosystem.
The opportunity is to create contextual advertising on steroids
“We don’t monetize the thing we create. We monetize the people that use it. The more people that use our products, the more opportunity we have to advertise to them.” (Andy Rubin – founder of Android, in Levy, 2011, page 229)
Now imagine what happens if Glass really takes off and people will adopt it like they adopted smartphones over the last 5 years. The essence of the Google’s business model is an advertising model that is built around the best possible user experience. While the traditional advertising model is based on propensity, Google’s system is based on precision. The audience buying model is actually just about to take off with mobile. This adidas case illustrates the full value of mobile brilliantly.
Glass and the whole Google ecosystem around it could take that model to the next level. Some people might think about it as science fiction but the cliché example of Minority Report is actually not that far away. Glass might be the next step of how we want to interact with technology and our environment. It might also be the main way of how brands want to interact with their customers.
Most importantly the immanent advantage is about providing the ultimate access to the Internet. We access the Internet physically, through a device (mobile, tablet, desktop, TV, car) and through an interface (a browser, an app, a search engine, a program, a website). The interface dictates the way we interact with content while the device is something we need to use with our hands. Glass is challenging both of those aspects. The device is taking technology out of the way, while the interaction is our voice.
If Glass became the new smartphone, the competitive advantage would then not only lie in owning the device but also the complete interface. Access to the Internet would mainly lead through Google. Looked at it this way, Glass might become the out-of-home complementary device to the in-home access centred around the Smart TV. Glass becomes complementary to YouTube. While Glass plays a critical role for Google’s strategy to become the indispensable companion of our every day lives out-of-home, YouTube could own the traditional ritual of being at home – in front of the big screen.
The YouTube aspect will directly attack the traditional TVC advertising model. Glass is designed to become the direct link between accessing the Internet and interacting with the real world at the same time. It would finally close the magic loop between every digital advertising $ spend and return of investment in the real world – the holy marketing ROI unlocked. This is based on the original vision of Google. “We want Google to be as smart as you – you should be getting an answer the minute you think of it.” (Sergey Brin in Levy, 2011, page 35) The answer is relevant content from a user perspective. From a business perspective the answer is advertising that is even more contextual, relevant, targeted and profitable. For Google and for its clients.
When Google becomes a real threat to our privacy – and vice versa
So why is user acceptance the biggest threat in this? Well, everything Google offers depends on the users to trust it. The basic principle of the media economy is probably the one thing that will never change. The money goes where the eyeballs are – in the case of Glass quite literally.
Glass is built around the hypotheses that many people will start wearing it. Everything Google does is built around scale. As Larry Page is quoted in Levy’s book: “Ten years from now, what thing can we build at scale that’s going to have the maximum impact on humanity?” In order to not only change humanity but also the advertising world, people will need to adopt this on mass scale. But exactly in that lies the threat for Google. What if Glass is actually the tipping point of people realising the impact this has on their privacy?
Google is providing world-class products and most of them are for free. The price we as users pay for using Google products is our privacy (or data). That is a fair deal. While probably not everyone things about it this way now, there is also a realistic chance that with the next generation of internet users (if that is still what we will call them), the concept of privacy will change dramatically. But Glass is not only challenging your own privacy but social norms and the way we interact with each other.
There is a very interesting argument that the most important Google Glass experience is not the user experience but the experience of everyone else. Who knows who is recording their surroundings in which situation? Are friends really focusing on the conversation they have with you or do they check their E-Mails? This article about the Google Glass feature no one is talking about is definitely worth a read.
Glass will and already raises privacy concerns. In his reflections on Google Glass, Jan Chipchase even argues that Glass is Google’s unintentional public service announcement on the future of privacy. The adoption of Glass might be the tipping point of consumers refusing the presence of technology in our everyday lives. There is a certain irony in that: While the intention for Glass is about ‘making technology invisible (taking it out of the way)’, it might achieve the exact opposite. What might prevent Glass from really taking off is it’s obvious intrusiveness – not on a personal but on a social level.
The challenge is about driving user adoption and trust at the same time
It will be interesting to see how Google will push Glass adoption and how quickly we will see Glass being used and perceived as normal. Obviously there might be much more mundane reasons why people might not adopt it as quickly – price and vanity are two of them.
But rather than looking at the mass market, there might also be a different angle to this. While the B2C advertising model is based on scale, B2B is more about the scope in possible solutions and use cases for Glass. We might see Glass being used in professions where people might need equipment that allows them to operate better in their jobs. Imagine sales representatives using Glass to better serve their customers, retail staff and flight attendants providing better service, lab assistants recording their work. Probably business people will first adopt Glass to communicate with each other. Perhaps your car is the killer app for Google Glass. Adoption depends on the right applications and use cases. Perhaps people need to see it in action and use it in their professional lives before mass market adoption takes off.
Desktop computers and mobile phones also started as business tools before they were adopted by wider society. These were innovations that changed the way we access the Internet and how brands interact with us. Google Glass might be the biggest innovative leap Google has done so far with a market ready consumer product. Perhaps it needs more applications in the business world first to make the consumer market ready for Glass. But if that happens, it will not just change the way we will interact with technology and brands but also how we will interact with each other.
Source: Levy, Steven / 2011 / In the Plex – How Google Thinks, Works, and Shapes Our Lives