Micro-markets

I had an interesting conversation earlier with Neil and Steve. We were talking about how companies treat small discrete markets and how that affects their larger markets.

My example Google is that have Ad Sense rolled out to many many markets. While many of those markets probably don’t generate much revenue individually as a group the time to integrate into those markets probably pays for itself. However I see two more distinct advantages.

By being an early mover into a market you help to invigorated it to stimulate growth and, of course, get the first mover advantage of hearts and minds. In an area where the product offerings are very similar this is a distinct advantage, since unless there is an actual problem inertia sets in and people generally don’t switch providers.

The next advantage is ubiquity. Ad Sense is everywhere. This makes it more attractive to both advertisers and sites that show advertising (let’s call them partners). Since wherever you go partner sites carry Ad Sense advertisers are more happy to use the service because there is a better likelihood that their ads will be shown to the right user group to generate the best click-throughs. This of course means there are better advertisers for the partners who like getting the ads shown on their site and getting the highest click through rates.

More than that users like that the ubiquity makes Ad Sense non threatening now, because they’ve seen it hundreds of times before. So they are more willing to click. All in all this makes for a very tidy circle.

My thought is simple; The internet is global. If you can launch a lightweight product to as many markets as you can you will gain market share not only in the smaller markets, which will grow, but across all your markets.

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