Gist: Google gives campuses free, branded, ad-free usage of Google Apps, their cloud offering, familiarizing the students with the product, which will result in workplace purchases (which do generate revenue for Google.) They hold almost a 60% market share in campuses that recently migrated to cloud email and services options. Google’s smart in targeting campuses: they are also the perfect adoption point for Google Chrome OS.

Advertising Age recently profiled Google’s brilliant Cloud conversion plan targeting college campuses. It’s a fantastic article documenting how Google is going for wide adoption of their OS.

For more than two years, Google has approached colleges and universities with a near-unbeatable offer: provide unlimited hosted e-mail and other applications, all branded by the institution and delivered free of charge.

The colleges take the hook of using Google (GOOG) for replacing their IT infrastructure, and it gives an immense cost-benefit. AdAge says that Google signs up 70 to 75 campuses per quarter (!), an astounding rate, given how large of a market they have. With a total United States number of two-year and four-year colleges of approximately 4,000, Google’s cloud offering is gaining 2% market share each quarter (not to mention word-of-mouth marketing for a perhaps increasing derivative of market share gain.)

Indeed, Google already holds incredible market share in the campus cloud market, as the article quotes: “On campus, Google is making inroads. In its annual study of the role of technology on campus, the Campus Computing Project found that two-fifths of participating campuses had either migrated to outsourced e-mail and services or planned to. Of those, 56.5% opted for Google, 38.4% for Microsoft (MSFT) and 4.8% for Zimbra, an open-source software maker owned by Yahoo (YHOO).”

Not only does the campus receive free, branded, and ad-free email, calendar, and various other services from Google through the cloud, Google also gains three things. One, familiarity of students to the service. Two, and connected to one, future use of the Google cloud offerings on their own after college. Three, knowledge of this cloud service, and with a positive experience, this may transfer into the workplace which will allow Google to convert more business (profit-making) customers for their Google Apps cloud offering. (Interestingly, this is similar to why the piracy of Photoshop is beneficial for the application: users of Photoshop make their workplace aware of the positives of the software package, and the workplace purchase the application, generating revenue for Adobe (ADBE).)

Furthermore, these campuses are the perfect place to target for the adoption of Google Chrome OS. The cloud-only, thin-client offering (discussed here in Google Chrome OS: Google’s Master Plan) to run on netbooks is a perfect offering for college students running on the cheap: cheap netbooks, open-source software, Google Apps cloud including Google Docs, Google Calendar, Gmail, and all other university-branded solutions that are already available to them, and Amazon one-click delivery of ramen. Google is undoubtedly aware of campuses as the perfect adopter of Google Chrome OS, and they’re smart to target the campus at first for a can’t-say-no adoption offer for Google Apps.

Startup Takeaway: Although Google presents itself as an immovable market leader (and offering these services for free, even), take away the power of other methods of marketing. Google’s marketing play here is brilliant: target users from the ground up, by offering an exceptional service for a price that can’t be argued against (free). Find other sources of marketing that can be used to bring, primarily, awareness, and let the product follow through for a positive experience.