Google bids for more mobile ad revenue

Enhanced Campaigns let retailers customize paid search ads in one account.

Katie Evans

If the new campaign management updates for Google Inc.’s AdWords paid search advertising product had their own keywords they might be “mobile” and “money.” The surge in mobile web use has created both complexities and revenue opportunities for Google and its advertisers, and Google is addressing both in a major change it’s making to AdWords. The net effect for retailers, experts say, will be to simplify campaign management for advertisers that target consumers using mobile devices as well as PCs, while increasing the cost per click on paid search ads that appears on tablet computers.

The complexity in managing paid search campaigns stems from consumers accessing the web from just about anywhere using a desktop computer, laptop, smartphone or tablet. Retailers want to customize AdWords campaigns because consumers respond differently to online ads based on the devices they are using, what they are searching for, their location, and other factors such as the time of day.  

All those variables added up to big headaches for brands trying to run effective ad campaigns for both mobile devices and computers. In an effort to make managing effective, targeted campaigns easier for its advertisers and aiming to generate more revenue from ads, Google has unveiled Enhanced Campaigns—a strategy to help retailers customize ads across many devices and for other variables such as time of day and location in a single AdWords account.

With Enhanced Campaigns, instead of having to cobble together and compare several separate campaigns, reports and ad extensions, advertisers now can manage them all in one spot, Google writes in a blog post announcing the feature.

“Enhanced campaigns help you reach people with the right ads, based on their context like location, time of day and device type, across all devices without having to set up and manage several separate campaigns,” Google writes.  

Google uses the following example: “A pizza restaurant probably wants to show one ad to someone searching for ‘pizza’ at 1 p.m. on her PC at work (perhaps a link to an online order form or menu), and a different ad to someone searching for ‘pizza’ at 8 p.m. on a smartphone a half-mile from the restaurant (perhaps a click-to-call phone number and restaurant locator). Signals like location, time of day, and the capabilities of the device people are using have become increasingly important in showing them the right ad,” Google says.

Enhanced Campaigns will also enable advertisers to target consumers and change their ad word bids according to all these variables. For example, if a bar wants to reach people nearby searching for “happy hour” or “drink specials” on a smartphone, it can adjust its bids in one account with three entries. The bar might bid 20% higher for searches after 5 p.m., 50% higher for searches on smartphones, and 30% higher for consumers a half mile or less away.

Other updates include Google automatically showing ads across devices with the appropriate ad text (for example, appropriate character counts per line for smartphone ads compared with desktop) and app download (for example, Google will only show an ad to download an Android app on an Android device). Before, advertisers had to edit each campaign for every possible combination of devices, location and time of day.

For instance, a large chain retailer with both bricks-and-mortar stores and a web site can set up in a single campaign an ad with click-to-call and location information for consumers searching on a smartphone and an ad for its e-commerce site for consumers searching on a PC, Google says.

Brands and retailers can also more easily measure ad performance across devices with the update, Google says. For example, a retailer can now set parameters and see, for instance, the number of phone calls that last at least 60 seconds that stem from a click-to-call smartphone ad or the number of consumers that downloaded its app by clicking on a mobile paid search ad.

While advertisers before could check a box in their general AdWords management campaigns to have their traditional PC ads delivered to smartphones and tablets devices as well, if they wanted to create a targeted mobile campaign that fit the different needs and desires of a mobile shopper, they had to create separate accounts for smartphones and tablets, says Melissa Parrish, interactive analyst at Forrester Research Inc. Before Enhanced Campaigns, Google, in fact, strongly advised advertisers serious about mobile paid search to create separate campaigns. 

However, one word absent from Google’s examples in its blog post is tablets. That’s because with Enhanced Campaigns, advertisers can no longer target tablet users individually. Tablet ads will be lumped in with desktop ads, and smartphones alone will have their own modifier options, such as adding click-to–call, adjusting bids and changing ad copy.

Many industry observers say lumping tablets with computers is a move by Google to drive up the fee Google collects for each click. “Google has made a clear statement to its advertisers: tablets aren’t mobile,” says Adobe Systems Inc., which operates Adobe Media Optimizer, a digital advertising platform. “But they’ve taken it a step further and effectively said that tablets are desktop.”

Adobe says Google likely made the change in part because tablet traffic patterns more closely resemble desktops, as does a consumer’s propensity to purchase, at least when one compares them to smartphones. For example, a 2012 Google study finds the most common places consumers use tablets are, on the couch, in bed, at the table and in the kitchen. In fact, the first out-of-home location to make the list was the car, which occurred only 3% of the time.

However, Adobe says, despite some similarities, tablets and computers are different animals—particularly when it comes to ad performance. Paid search conversion rates for tablets are 20% higher than for desktops, while paid search conversion rates for smartphones are 42% lower than for desktops, according to Adobe research. “If you factor in that cost per click on tablets are 30% lower than on desktops, paid search return on investment on tablets is 70% better than desktops,” Adobe says. “By lumping the higher-performing tablet traffic in with desktop traffic, Google is increasing its revenue per search and cost per click by combining desktop and tablet traffic. However this also means advertisers may see their return on investment fall as cost per clicks increase.”

Google confirmed that the new format now does combine tablets with computers.

Still, others think the updates will help advertisers navigate the complex waters of managing mobile and PC campaigns and tailoring ads for each.

“Mobile search has been growing incredibly quickly—it's actually expected to outpace desktop search by next year,” says Larry Kim, founder and chief technology officer of search engine marketing services firm Word Stream. “But setting up mobile campaigns has been much too complicated. The new campaign structure will greatly simplify targeting and bidding for different mobile devices and locations.”

The Enhanced Campaign feature will be offered as an option for advertisers over the next few weeks and will become standard for all AdWords accounts in the next six months, Google says. 


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