Search Results Follow Market Share Rules

Many years ago, I learned that there are fairly reliable relationships between market share and profitability. Basically, the rule is that the number-one provider in any market has twice the market share of provider number two, which in turn has twice the share of provider number three. It's a remarkably useful rule of thumb.

A new examination by Chitika, looking at the value of Google search results, ranked by share, is remarkably consistent with those rules of thumb about market share.

As it turns out, the number-one search result tends to get double the traffic of the number-two result. The Chitika data also shows that search result three has 11.4 percent share, while the number-four result has eight percent share. That's pretty close to what the rule of thumb would suggest.

If the number one result has 34 percent share, the rule would predict the second result to be 17 percent, which is precisely what Chitika found. The rule also would suggest result three would have 8.5 percent share. In the Chitika data, the third search result has 11 percent share. The fourth result has eight percent share, as the rule suggests would be the pattern.

In search results, as in other markets, share makes a huge difference. The other thing you might recognize is a standard Pareto distribution, sometimes known as a "long tail" or 80/20 rule.

Rules of thumb can be excellent guides to strategy, if a company really wants to lead a market. It's also nice to know that at least some things one learns in school turn out to be correct in real life. 

The Value of Google Result Positioning | Chitika Insights