Exercise 24 – Google search revenue was down. Figure out why.

Post and review answers and feedback to answers in the comments section of this post.

See also:

List of problem solving questions for product manager job interviews

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First Clarify
Is this in a given geography?
Is this a seasonal trend?
Have we seen this elsewhere i.e. youtube video searches?
Do we have competitive product launch or an alternate internal launch?
Bug / tool / system uptime

Then I will find out by How much? Is this hockeystick or is this gradual? For how long = 1 month or a year or more?

Google ads revenue is mostly ads
Google revenue = Ads revenue = number of impressions * click through rate * CPC

Figure out which of this is an issue:
– If Impressions went down = explore 1) if we are not showing ads or there is change in showing ads, 2) if there is decline in number of users due to social changes, 3) is there a competitive launch or 4) did we have bug or system downtime affecting this
– If Clickthrough rate is down= this is due to 1) irrelevant or misplaced ads due to internal algorithm changes 2) UX or Layout making the ads invisble
If the CPC is down = Find out 1) if avg $ of bids have gone down, 2) if overall economy is affecting this 3) if number of business advertising on Google have declined


Thanks for the answer. Was really helpful for me. Should we say what needs to be done to increase revenue or just discover the cause?


Google search revenue is driven by ads. When we say, revenue is down is it steady yoy, qoq OR we see a sudden dip? Is this an industry trend or company wide trend or only affecting Google search? Let’s say, it is a steady decrease from last year. I would look into following areas to diagnose the problem.
1. Company:
– Has the business model changed? Ex. We were are making revenue on ads using tech fee+ data fee+ % of spend.
– How revenue is recognized over the past year?
– Bad PR for the company
– Changes in the Govt Policies that affect the company/ google search product
2. Competition
– New platform that serves ads. Example snapchat, Facebook etc. Have their revenues increased?
3. Product
– Change in Algorithms
– Increase in support tickets
– Cannibalization from another product within Google
– Is the revenue decreasing for specific feature: CPC, CPA, CPM?
– New feature that affected it over this year
4. Customer (consumer and advertiser).
– Specific location
– Specific vertical of advertisers or end users (Ex. Retail advertisers and teenagers) leaving the platform