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In Big Shift, Google Aims To Boost Mobile Ad Campaigns
It’s no secret that the rapid shift of online activity from computers to smartphones and tablets presents a big challenge to online advertising leaders, from Google to Yahoo to Facebook. No other issue weighs as heavily on these companies’ shares today as the mass move to mobile.
The reasons: On the smaller screens, ads are relatively bigger and more intrusive, so not as many can run. At the same time, the impact of mobile ads on eventual sales is harder to track, so marketers aren’t willing to pay as much for them–possibly a factor in a worrisome decline in Google’s ad prices, for one. But the biggest problem may be the sheer complexity of doing ad campaigns that can reach consumers who increasingly flit from computer to smartphone to tablet and back throughout the day.
At least that’s what Google is betting with a mildly labeled “upgrade” to its AdWords search ad system announced today. Google is rolling out what it calls enhanced campaigns to help marketers–especially small and medium-sized businesses with few resources to devise complex campaigns–to reach people wherever they are more easily than they can now.
It’s one of the biggest changes yet to the AdWords system that accounts for the vast majority of Google’s revenues. The most obvious outcome for Google is that it’s likely to see many more businesses bidding for mobile ad placement, increasing competition in Google’s auction-based system, and therefore raising prices. “It’s finally updating the platform according to how the world really works,” says Daina Middleton, global CEO of the search ad agency Performics. “It puts the sexy back in search.”
Of course, that mobile ad pricing upside for Google could be a downside for savvy advertisers that to date have been able to get valuable mobile ad inventory relatively cheaply. What’s more, while the changes may simplify the overall process of doing mobile campaigns, they also impose a new mindset for marketers. “This will force marketers to address mobile if they haven’t already,” says Middleton. And because marketers won’t be able to run ads only on mobile devices anymore, they’ll have to better integrate mobile, tablet, and desktop ad campaigns. “We’re going to have to think of everything more holistically,” she says.
Google’s making three main changes. For one, it will make it easier to vary bids by device, its location, and time of day, all of which Google knows from GPS, device signatures, and other data. Google’s example of how this would work: A breakfast joint might want to reach people searching for “coffee” or “breakfast” on a smartphone. Using the new bid adjustments, they can bid 50% higher for searches on smartphones (which indicates people are out looking to eat), 25% higher on people searching from less than a half-mile away than farther away, and 20% lower if the search is after 11 a.m. Here’s what it looks like on the Google ad dashboard:
Second, ads can be automatically varied depending on whether searches come from a computer or a smartphone. For instance, an ad for a retailer with both physical stores and a website could include a click-to-call button or map for people searching from a smartphone or, for people searching from a computer, a link to the website.
Third, Google is providing new ways beyond clicks for advertisers to measure the impact of the ads. In particular, they will be able to count calls and app downloads, with more metrics to come soon. “We now live in a multi-screen world where we move around quite a bit throughout the day,” says Nick Fox, VP of product management at Google. “These upgrades will make marketing more effective and easier in the multi-screen world.”
One search marketing firm that worked with Google on the changes, WordStream, says the changes should help its 1,000 or so small and medium-sized business clients. Founder and Chief Technology Officer Larry Kim says, for example, that only one in 25 advertisers are using the click-to-call option on mobile ads because it’s too complicated to set up multiple ads or targeting options. “Previously, mobile campaign management was too complicated and time-consuming for all but the biggest-budget, most sophisticated advertisers,” says Kim, who wrote a blog post detailing the changes. Now, he envisions many more businesses advertising to mobile users.
Of course, this could result in more revenue for Google, both by enabling more businesses to buy mobile ads and potentially by encouraging them to spend more to reach more attractive prospects. Nothing wrong with that if it pays off for advertisers too. But not everyone may be thrilled with the changes–perhaps least of all big marketers that to date have been able to run complex campaigns but now could face higher ad prices. Richard Zwicky, CEO of the digital marketing agency BlueGlass Interactive, outlined his concerns in a blog post before Google’s announcement, saying that Google was attempting to mask the lower prices of mobile ads.
Essentially, Zwicky says he’s worried that the changes will give businesses less control over how they bid for desktop vs. mobile searches and less insight into the cost and impact of each. Google declined to respond specifically to Zwicky, but the new changes appear to continue to allow advertisers to control whether and how they run mobile ads. Google also says it will continue to provide metrics on mobile vs. desktop prices, as well as additional information on which website links, click-to-call buttons, and other ad features are working best.
However, it does appear, from an analysis by Ginny Marvin at Search Engine Land, that advertisers will have somewhat less control over campaigns. For one, Google is grouping bids for computers and tablets together, since it has found they are used in similar ways (namely at home). Conceptually that may make sense, but for now, it means advertisers won’t be able to bid separately on ads for tablets, which have generally had better bang for the buck according to many marketers, probably because of less competition in keyword bidding. One commenter on Marvin’s post on Google+ offered this succinct analysis: “- THIS SUCKS VACUUM CLEANER-LIKE!”
And there are a few other wrinkles that, as Zwicky also said, could make bidding more difficult in some cases, Search Engine Land says:
In addition, advertisers will set a baseline bid that applies to both desktop and tablet, and then set the mobile bid as a multiplier of the desktop/tablet bid. There is little guidance at this point on how advertisers are to determine what that multiplier should be.
When asked whether advertisers could opt out of mobile or set mobile bids lower than desktop, a Google spokesperson replied:
“If someone doesn’t want to run on mobile, then they can decrease their mobile bid adjustment by -100%, which will effectively mean their ads don’t show up on mobile. So yes, all the bid adjustments can go up or down. If they value mobile more than desktop/tablet then they can set a lower base bid and then crank up the mobile bid adjustment by +300%.”
The spokesperson also clarified that advertisers can set mobile bids at -30%, for example, if they want to emphasize desktop — and if they know mobile CPCs have been historically lower. Interestingly, even as Google puts the focus on mobile, desktop is now a built-in foundation to AdWords — there is no way to have a mobile-only campaign.
Targeting at the operating system level will no longer be available. A Google spokesperson clarified, “One exception to this is click-to-download ads where an advertiser would only want to show an app download ad on a device that could actually download the app (obviously). The advertiser would tell us which app they want to promote and then we’ll make sure to only show it on the devices that can download it.” Again, the advertiser loses control of the targeting and has to rely on/trust Google to do it for them.
That said, other ad experts think the situation ultimately will prove positive for most of the players. A report from digital marketing agency 360i concludes:
Following a period of adjustment for advertisers, Enhanced Campaigns will present a win- win-win scenario for marketers, users and Google itself. With this update, Google is pushing the industry forward and allowing all advertisers to reap the benefits of mobile search optimization; we expect Google to provide the tools needed for more advanced mobile targeting in the future. As marketers better optimize campaigns by device, the consumer experience will also improve.
Google CEO Larry Page hinted at all this for much of the past year, saying he aimed to provide a more consistent experience for advertisers across desktop and mobile ads. During the recent fourth-quarter earnings conference call, he also said specifically that “we are working to simplify our ad system for advertisers.” This is some of the meat on those bones. We’ll soon find out whether or not marketers find it tasty.