Google’s changes to mobile advertising could fix company’s major problem


A Google homepage is displayed on a Motorola Droid phone in Washington August 15, 2011. (KEVIN LAMARQUE/REUTERS)
February 6, 2013

Google has announced that it’s making sweeping changes to simplify the way it sells ads for mobile devices — a move that some say could dramatically help the company’s bottom line.

The company will will now allow advertisers to centralize controls for mobile and desktop ad campaigns in one place and offer advertisers more data to demonstrate the true worth of their campaigns.

“This is the biggest change in AdWords over the last five years,” said Internet marketing analyst Larry Kim, founder of Wordstream, who worked with Google ahead of the company’s announcement.

Mobile searches hold about half the value of desktop hits, Kim said. But they’re also making up a growing part of all search hits. For that reason, analysts have identified mobile advertising as one of Google’s main roadblocks for the future, particularly if it can’t close the gap between the cost of desktop ads and mobile ads.

There are a couple of reasons that mobile advertising is such a challenge. First, it’s hard to deliver a good, but not intrusive, ad on a smaller screen. Second, it has traditionally been difficult to get a mobile ad campaign going. In the past, Google’s AdWords program has required companies to submit separate campaigns for different devices, locations and times — a labor-intensive process that often results in companies running hundreds of simultaneous, similar campaigns.

With the changes, however, advertisers will be able to control several branches of a single campaign, with options to control customized mobile and desktop ads for different locations and times from a single place.

For example, Kim said, a D.C.-based dentist could submit a desktop ad to attract regular customers and a mobile ad with a number to call for pressing health problems in the same campaign. She could also choose to have her campaign bid higher for people searching on mobile devices within D.C. during her business hours, then switch to higher bids for people in the suburbs looking for a good dentist at night.

“That makes it 10, maybe a 100 times easier to build these mobile campaigns,” Kim said.

Google is also offering advertisers more tools and more data on the impact of campaigns, which Kim said will prove the value of mobile ads to more advertisers, consequently driving up the cost of those ads — and Google’s bottom line.

However, Daina Middleton, the global CEO of the marketing agency Performics, noted that those metrics will be most useful to advertisers when users are logged into their Google accounts across devices.

“It’s great step forward, but not for everyone,” she said.

She added that advertisers will have to increase their online advertising budgets if the gap between mobile and desktop clicks narrows.

The changes should also require advertisers to be more thoughtful about the information they put on various devices, she said. That could result in better ads for the end-user but comes with its own costs.

“Advertisers primarily will have to think about what content they put on what device at what time,” she said. “It may require marketers to think about either having someone with those chops in-house or to have a partner to do that.”

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Hayley Tsukayama covers consumer technology for The Washington Post.
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