Google search revenue was down. Figure out why.

Clarify

• Google search revenue comes from ads shown on the search page and revenue comes from ad clicks

• Down for both desktop and mobile? Yes

• Down in particular geography? Say US

• Gradual or sudden? Gradual since a month

• How much down? Say 20%

Internal factors

Lets check for some internal factor that might be contributing:

• Search algo changes?

• Major UI changes?

• Downtime, bug, A/B test

• Change in metric calculation method?

External Factors

• Competitors gaining share? No

• Bad PR or a ban

Hypothesis:

Google ad revenue from search is a combination of follow:

• # of searches * # of ads shown * CTR * Cost per click (CPC)

• # of advertisers on the platform

We can dig it further to see where the drop is coming from:

• I will start with looking at the # of searches. Its unlikely they are going down as no competitor has gained share but if it is down I will further dig deeper into segmenting the type of searches, device, geography etc to see where the drop is coming from.

• # of ads shown: I will check for avg # of ads shown per search and see if there is a drop. I will also look into different segment of searches (popular/unpopular, questions, image search etc) to see if there is a drop in any of these sections. If I notice a drop I will dig deeper to see if we made any change to the algo which matches ads with searches

• CTR: If I see a drop, I will check for any major changes in UI, bugs in redirection, ad real estate etc. I will also segment ads based on product ads (with images) or sponsored links and see where the CTR drop is coming from. I will also check if the recommendation system for ads had any major changes

• CPC: I will check if we have started charging less due to market competition etc and dig further into the data if there is any drop in average CPC.

• Lastly, I will check if the # of advertisers on our platform have dropped. If I see a drop, I will look into different sections of advertisers (by industry type, small/medium/large budget etc). If there is a drop in particular section, we need to survey to find out if we aren’t meeting their requirements anymore

Structure would follow: 

1. Clarify 

   1. Describe product

   2. Ask Clarification questions

2. List out user journey 

3. List out potential issues (internal) based on user journey

4. List out potential issues (external) 

5. Evaluate/Conclude

1. Clarify

   1. What’s Google Search: Search engine that provides based on patented algorithm results (links to pages, images, videos) that are most relevant based on query. GSearch is available across all channels including mobile and web. 

   2. Google monetizes Gsearch by displaying ads on it’s site page including sponsored links that user can click or displaying ads along with site results. 

   3. Clarification questions:

      1. When you say GSearch revenue is down, I am assuming that the ads related revenue on Google’s search site is down. Is this correct? Yes

      2. Is this decline in gsearch revenue occurred recently i.e last quarter or so or is this being going on for long time or seasonality related? Occurred just last quarter for first time

      3. I am assuming the decline in revenue is significant. What I mean is higher % decline than usually seen if at all? Yes .

      4. Is this decline restricted to a channel e.g mobile or web? Its’ largely due to decline in searches on mobile devices

      5. Is this decline restricted to some geographical regions or worldwide? It’s worldwide..

   4. Okay..so before I jump ahead with defining user journey, would like to restate what have learnt as of now about the issue.

      1. This GSearch revenue decline is related to revenue from ads served for Google searches

      2. The Gsearch revenue decline is significant and occurred last quarter

      3. The Gsearch revenue decline was largely due to decline in searches on mobile devices.

      4. The Gsearch revenue decline was worldwide

      5. Is the Gsearch decline more for android or iphone users? Both

      6. Is the Gsearch decline more on some cell phone mobile carrier e.g AT&T, Sprint etc? No

   5. Right, to understand mobile Gsearch user experience and potential issues that could be a root cause, want to walk through the user journey as below:

      1. Mobile user (usually android user but could also be other device users) access gsearch using either phone touch screen or voice commands(i.e Ok Google) ..

      2. If user is android user, can use search bar directly on home screen to search or can use browser (e.g chrome) to search

      3. If user is iphone user, can use entire browser (e.g chrome, firefox) to search or gsearch app 

      4. Once user fires up search, the results are displayed either on browser or directly sent over as SMS or text message to user

      5. User can then view directly ads in browser, or be provided with some options (e.g burger shops near user location) with option to directly call the number on file using smartphone 

   6. What can go wrong with above user funnel

      1. Internal aspects

      2. External aspect

         1. Internal factors:

            1. Evaluate if a new feature was launched either for android/iphone/both recently that impacts gsearch 

               1. Get data of % of unsuccessful queries in gsearch prior and after launch of feature if there was a significant feature that gsearch launched recently

            2. Evaluate whether there are some issues with browser to access search results

            3. Evaluate if there was an issue with clicks or display of ads on search results

               1. % of ads CTR  before and after the decline can be evaluated to see if there was decline in clicks 

               2. % of ads that were displayed before and after decline per gsearch result to see if there was significant decline in rendering 

            4. User preferences

               1. % of increase in  users selecting ‘opt out’ option for ads in settings for both android and iphone device

               2. Was this increase more than usual for either or both types of devices

               3. As android and smartphone phones are almost split 50/50, even if apple made it easier for user to opt out of ads in settings, this would sginficantly impact Google search ads revenue 

         2. External Factors:

            1. Competitive Changes in recent quarter:

               1. Was there a new competitor that entered the mobile search space with a new product Or

               2. Was there a change recently made by apple or mobile carriers for android phones that made it easier to access search results using competitive search engines eg. bing?

               3. Was there a governmental/ regulatory requirement (e.g default opt out in settings) for mobile based ads that made the search revenue go down?

   7. Conclude

      1. Based on above factors and root cause, there could be a combination or just one reason that might have resulted in decline in gsearch revenue

      2. Once, pinpoint the factors, following would be some of the mitigation options :

         1. Internal factors:

            1. Feature that resulted in lower gsearch mobile results: roll back feature, fix the issue, retest, deploy with fewer users, scale

            2. Browser related issues e.g majority of searches (mobile) using Chrome on Android or Safari/Firefox on iphone/other. So should be easy to pin point which browser causing issue and come up with mitigation plans to remove the issue

            3. User preferences if an issue specially assuming on iphone , work with Google apple partnership team to try and address the issue. Mitigation options could include working to evaluate why users are opting out , if some obvious privacy concerns try to mitigate through messaging, some tweak in functionality to fix the issues. 

         2. External factors:

            1. Competitive changes can be mitigated by incentives or providing improved functionality

               1. Incentives more short term/immediate approach to stop the drop 

               2. Features /functionality longer term approach based on usability studies, partnerships to improve user experience with product

            2. Regulatory issues would result in working with governmental agencies to understand the concerns and come up with a mitigation strategy that could result in enabling ‘alerts’ or ‘notifications to user to update ‘opt out’ in settings or to make it easier for users to toggle across settings in mobile device etc.

Looking into internal and external factors will make us understand more about the issue. 

Narrowing down the scope

• Specific region or global? global & overall
• Specific period? YoY May2020 compared to May2019. 
• To be on same page, the business model is still the same, Search Revenue is based on Ads with classified search ranking, right? yes. 

Let's breakdown the analysis into two main aspects

• External Perspective
  • Competitive Advantages > have we lost any competitive advantage? any new market insights that can help - Businesses are looking into social media ads more? Instagram & Facebook. A financial report might help here to understand the market dynamics. 
  • Supplier Power
    • Do we have a problem with new ads and compaigns on adwards and adsense? any other substitutes here?
  • User Power
    • more breakdown on user behavior and classification will help here. Demographical details are required and that include other aspects such as mobile vs web. 
    • Do we see the same behavior/attitude on other company's platforms?
• Internal Perspective
  • Product Aspects, new changes in our search results that impacts the Click-through-rate. 
  • Any applied A/B test that impacted a specific cohort?
  • Did we change the calculations of cost-per-click mechanism that might impact the results. 

with that said, I do think if we figured out the why? then we can work accordingly to adapt and tune in order to bring our revenues in shap again and dominant.