By Chantal Tode
February 8, 2013
Google’s most sweeping overhaul to AdWords in several years is geared toward driving more revenue from mobile, which it could accomplish in the short term. However, these changes could also make it more difficult to optimize for the medium, something that could hurt mobile advertising more broadly.
The new functionality, called Enhanced Campaigns, aims to simplify AdWords by enabling marketers to set up and manage separate campaigns across all devices based on their location, time of day and device type from the same location. However, at the same time, Google is removing the device targeting functionality that is currently available.
“It's a big deal for AdWords advertisers, perhaps the biggest announcement in a few years,” said Marc Poirier, co-founder and chief marketing officer of Acquisio, Brossard, Canada. “Advertisers will now have a simplified workflow to market across devices, which is good news.
“However the transition will hurt,” he said. “Among other things, advertisers will lose the ability to deploy mobile specific bid and budget strategies.
“Because mobile campaigns do not behave in the same way as desktop campaigns do, we'll have to find new ways to optimize. In a nutshell, lots of work for marketers who will want to get ready for this change.”
Lower ROI a possibility
Google has been dealing with declining CPCs for some time now as consumer use of the Internet and search increasingly migrates away from desktop to mobile, where CPCs have traditionally been lower.
The new Enhanced Campaigns functionality is expected to increase mobile CPCs in the short term, thereby driving Google’s results.
However, looking further out, marketers are not so sure that these changes will be good for mobile.
“This is a big issue for marketers as it is going to lower performance ROI and increase costs,” said Howie Schwartz, CEO of Human Demand.
“Without very clear targeting of smartphones vs tablets vs desktop web, marketers cannot optimize their landing pages/offers for the specific device, which will lead to poor campaign performance,” he said.
“For Google, short term it is a positive as it will increase CPC rates/revenue - but long term I believe they are damaging the mobile ecosystem by limiting targeting and lumping tablets in with the desktop Web is a big mistake.”
Streamlining multi-device strategies
In a blog post announcing the changes, Google pointed to the way that consumers are moving from one device to another to communicate, shop and stay entertained while the number of devices continues to proliferate. As a result, it can be complex and time-consuming for marketers trying to reach users across these many devices.
Enhanced Campaigns enables marketers to manage bids for ads across devices, locations, time of day and more from a single campaign. They will also be able to show ads across devices with the right text, site link, app or extension without having to edit each campaign separately.
Additionally, marketers will be able to easily count calls and app downloads as conversions in their AdWords reports.
However, advertisers will no longer be able to target or exclude devices at the campaign level. All keywords will trigger ads across all devices.
As a result, a smartphone only strategy is not an option and advertisers who do not have a smartphone strategy could find themselves serving ads on smartphones unintentionally, which could mean a lot of ads being served in mobile that do not have the mobile user in mind.
While advertisers can no longer create separate campaigns for desktop, smartphone and tablet targeting, they will be able to add a mobile modifier at the campaign level to modify bids on smartphone traffic.
“For advertisers who are not currently segmenting campaigns by device, setting up smartphone-specific ad copy will be much simpler,” said Jeremy Hull, associate director of paid search at iProspect.
“This is an example of Google deciding what is best for the advertiser,” he said. “However, in this case they’re not just opting you into a setting by default, they’re removing the option of opting out.”
Undermining mobile advertising
As a result of the changes, advertisers could begin to see lower performance from running non mobile optimized campaigns on smartphones and tablets, ultimately causing rates to fall.
The impact of these moves could even undermine mobile advertising more broadly.
“Marketers will have to develop landing pages for the 'lowest common denominator' since they will not easily be able to target specific devices - so no Flash - as it won't work on iOS - no custom creative for a tablet experience as you can't address the device directly in the new AdWords world,” Human Demand’s Mr. Schwartz said. “This is a big mistake.
“Confidence in mobile as a vibrant advertising ecosystem will fall without direct device targeting,” he said.
However, not everyone is convinced of the potential negative impact of these moves.
With mobile search expected to outpace desktop search by next year. The changes simplify how mobile campaigns are set up, making targeting and bidding for different mobile devices and locations much easier.
“It's a win-win for advertisers, Google, and its shareholders,” said Larry Kim, chief technology officer of WordStream.
“There has always been a big gap between the cost per click on mobile versus desktop,” he said. “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.”
Chantal Tode is associate editor on Mobile Marketer, New York