Small Business News

Google’s New AdWords Changes And Your Business

It’s been a huge week of news in the online maketing industry, particularly when it comes to Google. For one, Yahoo announced that it has signed a contextual ad agreement with Google, which will see Google display ads appear on various Yahoo properties, and even some co-branded sites. Before that, Google announced the launch of enhanced campaigns for AdWords, which is a huge evolutionary step (for better or for worse) for Google’s ad product, and by default, that means it has huge ramifications for online advertising.

What impact do you see Google’s changes having on your online marketing efforts? Let us know in the comments.

WordStream was one of three companies outside of Google that worked with the company on the enhanced campaigns project over the last few months. Founder/CTO Larry Kim reached out to WebProNews with some perspective about what the offering brings to the table for businesses.

“Enhanced Campaigns represent the biggest single change to the basic structure of AdWords campaigns in the past 10 years,” he says. “The new campaign structure will greatly simplify targeting and bidding for different devices and locations. It’s a win-win for both Google and advertisers.”

One key feature is bid adjustments to help advertisers manage bids across devices, locations, time of day, etc. from a single campaign. “A breakfast cafe wants to reach people nearby searching for ‘coffee’ or ‘breakfast’ on a smartphone,” explains Google SVP of engineering, Sridhar Ramaswamy, giving an example. “Using bid adjustments, with three simple entries, they can bid 25% higher for people searching a half-mile away, 20% lower for searches after 11am, and 50% higher for searches on smartphones. These bid adjustments can apply to all ads and all keywords in one single campaign.”

Enhanced campaigns will show ads across devices with the right ad text, sitelink, app or extension, without advertisers having to edit each campaign for every combination of devices, location and time of day. “A national retailer with both physical locations and a website can show ads with click-to-call and location extensions for people searching on their smartphones, while showing an ad for their e-commerce website to people searching on a PC — all within a single campaign,” explains Ramaswamy.

The enhanced campaigns also come with advanced reports to measure new conversion types. For example, you can count calls and app downloads as conversions in your AdWords reports.

“Mobile search has been growing incredibly quickly – it’s actually expected to outpace desktop search by next year,” says Kim. “But Google has had a big problem monetizing that traffic. For one, setting up mobile campaigns was too complicated. Making matters worse, mobile CPC’s tended to be much lower. Enhanced Campaigns are a strategic effort to solve both those problems.”

“Enhanced Campaigns are great news for advertisers at small and medium-sized businesses,” he adds. “Previously, mobile campaign management was too complicated and time-consuming for all but the biggest-budget, most sophisticated advertisers. Now even small companies can take advantage of the exciting opportunities in mobile search.”

“With Enhanced Campaigns, you not only have more bidding options, but your ads are actually much smarter,” he explains. “Google will be able to choose and adjust your ads and settings based on user context, so mobile users will get an optimized ad experience, without you having to build out separate campaigns.”

“There has always been a big gap between the cost per click (CPC) on mobile versus desktop. For obvious reasons, Google wants to close that gap, and these changes will help it accomplish that. I believe that mobile CPCs will be similar to desktop CPCs by the time campaigns are auto-upgraded later this year.”

Adobe’s Bill Mungovan explores how Google’s changes will impact advertisers in terms of tablets being considered mobile devices.

“A 2012 Google study showed that the most pop­u­lar places to use tablets are, in order, on the couch, in bed, in the home, at the table, and in the kitchen,” he writes. “Indeed, the first out-of-home loca­tion to make the list was the car, which occurred only 3% of the time. So tablets appear to be closer to lap­tops than mobile phones, at least in terms of con­sumer usage.”

WIth Google’s offering, tablet users will be lumped in with desktop users, while smartphone users will be targeted through the enhanced campaign functionality. “Adver­tis­ers can no longer cre­ate sep­a­rate cam­paigns for desk­top, smart­phone and tablet tar­get­ing, but will instead be able to add a mobile mod­i­fier at the cam­paign level to mod­ify bids on smart­phone traf­fic,” says Mungovan. “Google has made a clear state­ment to its adver­tis­ers: tablets aren’t mobile. But they’ve taken it a step fur­ther and effec­tively said that tablets are desktops.”

“Cur­rently, CPCs are lower for tablets given that com­pe­ti­tion for tablet traf­fic is still rel­a­tively low (but increas­ing),” he says. “By lump­ing the higher per­form­ing tablet traf­fic in with desk­top traf­fic, rev­enue per search (RPS) will increase for Google as CPCs increase on the com­bined desk­top and tablet traf­fic. This, pre­sum­ably, will address Google’s mobile mon­e­ti­za­tion gap as an increas­ing share of searches is com­ing from tablets and smartphones.”

“The down­side for adver­tis­ers in the long run is they may see lower over­all ROI as these CPCs creep up,” he adds.

As far as Kim is concerned, small businesses should be big winners with Google’s changes.

“Small businesses in particular have never been able to fully take advantage of the potential ROI in mobile search,” says Kim. “Not only was the setup and maintenance process prohibitively complex, but conversion tracking was much more challenging, and the reporting costs were being offloaded onto the advertiser. All of these factors acted as disincentives. With Enhanced Campaigns, Google is making it much simpler and more attractive for even small businesses to get ROI from mobile advertising.”

You can read more of Kim’s analysis here.

Apparently some advertisers aren’t thrilled with the direction Google is taking, expressing concerns with a loss of control.

Neil Sorenson, the head of PPC at ZAGG.com, says enhanced campaigns “aren’t really an upgrade or improvement’”. He writes, “What can we expect? Some advertisers might welcome Enhanced Campaigns with outstretched arms. It is entirely possible that these advertisers will see continued success using the new campaigns. That’s fantastic for them! Search marketers who have noted varying conversion rates across devices and taken steps to reduce or eliminate unprofitable traffic sources are likely worried. At this point it is for good reason.”

Business Insider points to some others in the industry who are expressing concern. For example, an anonymous search marketing professional said of the “smart pricing” behind enhanced campaigns, “They’re stealing money from advertisers because they can. It’s the most lowbrow thing Google has ever done. The damage this is going to do to advertisers is big. They’re going to sell a story to the public and be the Wizard of Oz behind the curtain.”

iProspect says, “Advertisers who do not have a smartphone strategy will be forced to come up with one, or leverage the bid multiplier workaround (setting the bid multiplier to negative 100 percent) to opt out of smartphones. Advertisers who don’t take the time to make this adjustment, or are unaware of it, will start serving ads on smartphones unintentionally. This is an example of Google deciding what is best for the advertiser – however, in this case they’re not just opting you into a setting by default, they’re removing the option of opting out or using a workaround.”

Enhanced campaigns will roll out to advertisers as an option over the coming weeks. All campaigns will be upgraded in mid-2013.

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