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Summary:

Google is making big changes to AdWords which is its main money machine and a major engine of online advertising. The company is framing the changes as a benefit — but they may shortchange advertisers and publishers.

Nikesh Arora
photo: Google

Google is overhauling its flagship AdWords service in an effort to raise mobile ad sales and to simplify advertising campaigns. Some advertisers complain that the changes mean a loss of control, in part because the new “Enhanced Campaigns” mean they can no longer create search ad campaigns aimed specifically at iPad and other tablet users.

Google’s Chief Business Officer Nikesh Arora, however, indicated at the Dive into Media conference in southern California that the company has no intention of changing course. Arora brushed off a question I posed about whether Google would reinstate the more granular ad options, and emphasized that the new AdWords system meant advertisers would no longer have to run hundreds of different ad campaigns to target all demographics and devices.

The changes to AdWords are important since Google has such an out-sized footprint in online advertising and because everyone is watching how the company is responding to internet users’ large-scale migration to mobile devices. So far, ads on smaller screens have proved much less lucrative than desktop ads — frustrating publishers and worrying Google investors.

Google announced its response last week in the form of a blog post describing the new “Enhanced Campaigns.” The new system means mobile ad purchases will be a default option when people sign up to buy Google AdWords (though they can turn the mobile part off). Another major change is Google’s decision to treat tablets and desktops as the same device for ad purposes. This goes against the philosophy of advertisers and publishers who consider the experience tablet a distinct, more immersive experience (though the distinction may be less when, as here, it concerns internet searching).

Ad industry blogs like 360i and AdExchanger have noted that Google is moving away from more granular forms of marketing while advertisers have complained about a loss of control.

On the flip side, some Google watchers have praised Enhanced Campaigns as a much-needed way to consolidate ad campaigns, and to make it easier for small ad buyers to join the mobile ad-buying landscape. At the All Things D event, Arora described how Google is also making it easier for advertisers to take advantage of distinct, new ad options associated with mobile — such as overlaying time and geographic location onto search queries.

In this context, the simplified options make sense, especially as advertisers right now confront the prospect of having to run hundreds of separate AdWords campaigns to account for all demographics and devices. And the Enhanced Campaigns will no doubt juice Google’s ad prices as more people join the mobile auction market, creating more competition for local searches such as “pizza Brooklyn Park Slope.” 

But overall, the new system still seems to shortchange publishers and advertisers. Tablets provide a unique user experience and could be a fount of advertising innovation; Google’s decision eliminates some of this potential. A better option would have been to unveil the Enhanced Campaign system but to also make the older, more granular options available to those who ask for it.

(Note: We’re going to be talking about alternative monetization strategies at our paidContent Live conference in New York on April 17).

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  1. This should have been rolled out at the same time as Universal Analytics for everyone and with perpetual free mobile/responsive web sites currently free for a year as part of their Howtogomo initiative with Duda Mobile, but I suspect the take up was lower than expected and they felt compelled to push the button.

    Nikesh is no stranger to controversy, he was the man responsible for the removal of the “agency discount” that enabled agencies to grow their businesses (and Google’s) until they tipped over 50% of the market and then withdrew that and replaced it with “best practise funding” to make it a “fairer auction” for all advertisers, and despite strong protests they persisted with it and the agency world has continued to grow without any slow down.

    It’s likely to lead to a need for sharper campaigns and an overhaul of the context of campaigns and a DEEP dive into analytics to see exactly how those tablet users perform.

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  3. Separate bids for tablets (like they are doing for mobile phones) would alleviate lots of concerns.

    In the aggregate, Google may see “similar” performance for desktops and tablets, but it’s not exactly the same and it can vary from advertiser to advertiser. We have some clients where tablets don’t convert well at all (think B2B lead forms) and we have others where we would love to bid in the 80-110% range depending on performance.

    Enhanced Campaigns are a good step forward and will bring additional efficiencies. However, they still need some tweaking and separate tablet bidding is a must.

  4. For the most part, more granular targeting which only benefits the agencies and other gurus who thrive on unneeded complexity. I admit there may be some situations when tablet targeting might be useful, but it’s an edge case.

    The explosion of Internet advertising channels is a much bigger problem for most marketers as it eliminates the economies of scale and raises our management costs.

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