The AdWords, They Are (Always) Achangin’

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It seems like just yesterday that Google launched its AdWords advertising platform.

Actually, it was more like January of 2000, and those AdWords ads weren’t auction-based, self-serve or even pay-per-click (PPC). And they weren’t very profitable.

In the first year of its operation, Adwords ad revenue was not even a third of Overture’s, a company that ran its ads using a PPC model. Overture was eventually acquired by Yahoo!

In a real-life tale of turning lemons into lemonade, Google only kept AdWords because the company it planned to sell its inventory to (DoubleClick, which Google eventually acquired) had troubles of its own thanks to the tech bubble.

Fast forward to fiscal year-end 2013, when Google’s revenues stand just shy of $60 billion, with most of that money coming from AdWords.

Of course, in order to keep growing year-over-year, Google must continually look towards the future. Thus, the search engine mogul announced three major updates to its ad platform last week, with most of these updates targeted at bringing in newer and bigger revenue streams.

It’s a Mad App World

The Gartner research firm estimates that total app downloads for 2014 will reach over 138 billion; for 2013, app downloads came in at 102 billion. While many of these apps are free, significant revenue (as in $26 billion for 2013) is generated thanks to in app purchases (IAPs). Another significant revenue chunk comes from… yep, app advertising. As in online advertising.

Thus, it comes as almost no surprise that Google AdWords ads will soon have an optional feature that allows for better mobile app advertising. This app promotion feature, as it’s being called, will occur across search ads, the Google Display Network, and on Google’s other acquisition, YouTube.

The feature will conveniently draw on information generated on Google Play, which is Google’s own mobile app store. Because, Google Play users need to input keywords to find apps, Google can easily harvest that information and serve it to advertisers who want to optimize app installs and maximize IAPs.

One current issue with app installs, as noted by Google, is that 80% of downloaded apps are used just once before being deleted. Google’s upcoming app promotion feature will include “app deep linking,” which will direct app installers to pages on an app that will hopefully encourage longer and better app use (and IAPs).

What this means for you

If you have an app that you’ve been trying to develop or that’s been on your list of to-do items, consider this latest Google announcement as your wakeup call and get moving. Apps are a big and lucrative business- just ask Pat Flynn.

Enterprise-Class Tools

The launch of “enterprise-class tools,” as quipped by Jerry Dischler, the VP of Product Management for AdWords, means that Google wants to target big businesses with deep pockets.

One of the major pain points for big businesses trying to create AdWords ads is that the process is tedious. To begin with, there is the actual ad campaign generation. Great. But let’s say the business is seasonal and wants to edit all its ads to say “Summer Sale” instead of “Winter Sale.” It’s no small feat to change thousands of ads to such a format.

To address this issue, upcoming AdWords ads will be equipped with a bulk edit function. The question remains as to how different and/or better this feature will be compared to Google Editor, however.

Google’s enterprise-class tools will also enable advertisers to maximize their conversions as well as their highest value conversions via an automated bidding function. This means that an ad budget can automatically allot a greater percentage of funds to those campaigns that are generating a higher number of sales or higher dollar sales. This is especially useful if the cost-per-click (CPC) for certain ads is high.

In order to keep advertisers on the AdWords platform, enterprise-class tools will also offer a way to format, graph and chart campaign results as they are generated. Advertisers will be able to save and export these results.

Finally, and perhaps most exciting of all, is Google’s announcement that its tools will soon feature a live laboratory that will allow advertisers to test ad campaigns before they are launched (i.e., cost money). The lab will enable advertisers to test different versions of their ad copies and formats, keywords, bids, times, locations, etc. using live traffic in the experiment.

What this means for you

You may have assumed that, just because you’re not running thousands of ad campaigns, the enterprise-class tools don’t apply to you. However, the aforementioned features of these tools can be quite useful for anyone who is testing and running ads. Furthermore, being able to actually live-test ads before their launch can mean huge cost savings for any size ad campaign.

On a side note, due to the very real inconvenience of bulk editing and data analysis, a large pool of third-party software tools has already emerged over the years to help advertisers. The question remains: Will Google’s new enterprise-class tools replace those third-party tools or not?

Improved Conversion Tracking

In 2013, Google came out with something called Estimated Total Conversions, which enabled advertisers to better determine how many and what level of conversions they were achieving across different devices like mobile phone, tablets and desktop computers. Obviously, one of the big pain points with tracking conversions is how to tell if consumer interest sparked on a user’s mobile phone translated to an eventual purchase on his laptop, for example.

New updates will be made to Estimated Total Conversions to better account for where in the process of a consumer sale the advertising comes into play. This is especially tricky when accounting for offline sales. 

Of course, this also brings into question how much user privacy will be sacrificed to obtain such information. Currently, data mining of existing customers obtains the most relevant information on purchases and shopping behavior. It remains to be seen how Google will work around this thorny (i.e., litigious) issue.

What this means for you

As an advertiser, you might be enthusiastic about finding out deeper information about your customers. However, as a customer, are you happy to know that Google might be tracking your shopping trips? One need only to think back on the Target store teen pregnancy case to get spooked.

AdWords Ads and You

AdWords ads may not be an advertising platform you are currently using, but that doesn’t mean you can’t still reap their benefits. If you generate an AdWords account through Google, you gain access to a lot of the tools that are available to advertisers, including the Keyword Planner. With Google’s upcoming live laboratory, you may actually be able to try all kinds of ads without paying a single penny. Then there’s the conversion tracking feature, which can tell you exactly where you should be spending your advertising money.

And that’s just the start of what Google’s AdWords ad platform offers.

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