Gmail (Google implements the secret formula) – Online Marketing


Google (or whoever is running Gmail) is getting close to re-smashing the atom.

Gmail has just been upgraded to 2gigs of storage, and in the end, they jokingly claim (it is april fool’s day, but they are more or less serious) that Gmail will have infinite storage capacity.

There’s a secret formula at work in Google’s 50 billion market cap think tank that everyone knows, but very few people use that determines how much money your site makes:

Pageviews X Click-through-Rate X Revenue-per-click/sale/lead

Yes, that’s really obvious. Yes, anyone could have figured that out. Yet, most people don’t seem to get it.

If you increase any of the numbers in the formula, then you increase your profits. Pageviews can go up with link popularity or compelling content. CTR can go up with better targeted ads or better placed ads. Revenue/sales/etc. can go up based on how good your products and/or web design is or on how well your content is matched with the ads/products.

Even though I probably search with Google 100+ times everyday, I can’t tell you the last time I actually clicked on an ad there (heretical statement coming from an online marketing agency isn’t it?), but with Gmail I click. I’m in browsing mode when I read my personal email, and I’m ok with clicking to see where a link takes me instead of actively searching for something specific. All in all, Gmail’s CTR has to be, prima facie, extremely low- maybe even below .001%, but the amount of time spent on each page and the number of page views per session more than makes up for that so it’s in Google’s best interest to make Gmail the #1 email service.

Of course, there is a problem with that. Google has been scared to integrate their non-search services into an online “passport” (pardon the MSFT marketing jargon) that has been so successful at locking users into using and as their homepage. This is probably so because they are scared of being called a “portal” and trying to compete where MSFT and Yahoo already excel. So eventhough I still wish Google had purchased Flickr instead Yahoo, that they will eventually allow free integration with Typepad, and that they integrate Picasa with Flickr, I’ll have to wait till they start applying the secret formula to the rest of their business. They’re missing billions of pageviews and revenue by not taking advantage of the formula throughout their company.

Oh well, their Gmail department gets it at least.