Advertising Powers Google’s Future

Advertising Powers Google’s Future

Google

In recent weeks, we have seen a flurry of earnings announcements from the major digital advertising platforms, including the big three: Amazon, Facebook, and Google. Together these companies account for 62 percent of all digital ad spend, according to eMarketer.

Google dominates with 37.1 percent market share. And yet, during earnings season, Amazon and Facebook have dominated the news even though Google’s ad business grew by 20 percent (year over year) for the final quarter of 2018. Google’s advertising revenues for the quarter were $32.6 billion, accounting for 83 percent of Alphabet’s revenue. For the full year, Google achieved $116.3 billion in ad revenue compared to $10 billion achieved by Amazon Advertising.

Where’s the Love for Google?

So where’s the love for Google? Here’s what I think is happening:

  • Surprise is more interesting than predictability. Facebook surprised analysts by reporting strong advertising growth for 2018, as we noted on our blog. Here is a company that has been rocked by data privacy scandals for months. And yet, the world’s largest social media platform just keeps growing, which raises questions about how important data privacy really is to Facebook’s community. As for Google? Advertising growth is expected. Even when Google surpasses analysts’ estimations, the pundits say “Yes, but . . . “ With Google’s latest quarterly earnings, analysts noted that Alphabet is spending more to support its ad business.

Google’s Advantages

But make no mistake: Google is going to continue to grow its ad business and in doing so will draw upon several advantages, such as:

  • A massive user base that relies on Google across multiple platforms and apps ranging from the Google search engine to Google Maps and YouTube.
  • A head start in using artificial intelligence to make advertising smarter and more effective. True, Google faces competition from Amazon and Facebook. But as I’ve noted, Google’s extensive AI tools are rapidly evolving.
  • Global reach. Amazon and Facebook are improving their advertising products to support international ad campaigns, but Google commands an already established global presence.
  • Strong content marketing that educates advertises on Google’s products. You can see for yourself from Google’s blogs.

What Businesses Should Do

My advice to businesses:

  • Stay abreast of advances in Google’s ad tools, especially with AI.

To maximize the value of your digital ad spend, contact True Interactive. We’re here to help.

Get Ready for AI Everywhere

Get Ready for AI Everywhere

Artificial Intelligence

In 2019, artificial intelligence (AI) will make digital advertising more targeted, thanks in part to the efforts of Google. But marketers will need to invest more time and effort to make AI pay off.

It’s clear that AI is essential to Google’s growth. In February 2018, CEO Sundar Pichai said AI is more profound than electricity or fire. A few months later, he published a statement of AI principles in which he outlined seven ways Google will use AI (and ways that Google will not). The post focused on the importance of using AI for social good. Pichai did not mention using AI for advertising, but Google is certainly applying AI to make advertising smarter.

For instance, in 2018, Google launched a number of products that use machine learning (a form of AI) to improve online advertising performance. I recently blogged about one such product, responsive search ads. As I noted, responsive search ads make it possible for advertisers to enter multiple headlines (up to 15) and descriptions (up to four) when creating a search ad. Then Google Ads applies machine learning to automatically test different combinations and learn which combinations perform best. In addition, per Google, advertisers can add a third headline and second description to your text ads, and your descriptions can have up to 90 characters.

2018 was just a warm-up for what’s to come in 2019. Businesses demand more accountability and ROI from their online ad spend, and AI does just that. I expect Google will focus more on using AI to make YouTube more effective. Google has already injected AI into YouTube with features such as maximize lift, which is a smart bidding tool that automatically adjusts bids at auction time to maximize the impact a company’s video ads have on brand perception. Maximize lift is supposed to help businesses reach people who are most likely to consider their brand after seeing a video ad.

One concern we often hear from advertisers is that YouTube is not as useful for direct-response campaigns as it is for brand building. In 2019, we’ll see the emergence of tools that do a better job targeting video ad content to people who are in shopping mode and ready to buy as Google makes YouTube more of a lower-funnel platform.

AI will make online advertising better. But AI will also require marketers to invest more time and energy to make it pay off, as I discussed in my post about responsive search ads. It’s important that businesses understand its uses and requirements. For more insight, contact True Interactive. We help businesses maximize the value of their online advertising and understand where the industry is headed.

Image source: https://pixabay.com/en/artificial-intelligence-robot-ai-ki-2167835/

Google Broadens Exact Match: What You Need to Know

Google Broadens Exact Match: What You Need to Know

Google

Our clients have been asking us about some recent news regarding how Google defines exact match. Here’s what’s going on and what you need to know:

Broadening “Exact Match”

Exact match is a keyword match type. With exact match keywords, a business can conduct a paid search campaign and reach potential customers searching for a specific keyword that you’re bidding on; or some close variant of it.

Google recently broadening the meaning of an exact match. Google is now looking at user intent when matching a query against a keyword. As Google noted in a blog post, Google will show ads for searches that include implied words, paraphrases, and other terms with the same meaning. Here’s how Google explains the change:

Let’s say you’re marketing for a travel business. If you’re using the exact match keyword [yosemite camping], your ads may show on other terms like “yosemite campground,” “campsites in yosemite,” or “yosemite national park ca camping.”

In each case, the intent of the search still matches the original keyword: to go camping in Yosemite National Park. However, you wouldn’t show on terms like “yosemite hotel” or “best yosemite camping,” because while both refer to staying at the park, the intent is different. Instead, these terms would match to the broad match version of this keyword.

This update represents a major change to Google’s algorithm. Why the change? According to Google, roughly 15 percent of searches conducted every day are new. As a result, potential customers might be looking for products and services using terms and phrases that are not even on your radar screen. But now, with machine learning, Google can cast its net wider without advertisers needing to manage an ever-expanding keyword list.

Benefits

Both advertisers and Google should benefit from this change. Businesses should be able to reach more people using Google’s advertising products. According to Google, advertisers using mostly exact match keywords see 3 percent more exact match clicks and conversions on average, with most coming from queries they aren’t reaching today. Google also benefits by matching user queries to a broader pool of keywords – which means more clicks, traffic, and revenue for Google.

What You Should Do

I advise any advertiser to keep a close eye on your search query reports (SQRs). You may notice unexpected queries matched to your keywords. You may need to add keyword negatives to modify your campaign. All algorithm changes have an impact. So watch your reports closely and be ready to adapt as needed. If you have additional questions about exact match targeting, contact True Interactive. We’re happy to help!

Google Responsive Ads: What You Need to Know

Google Responsive Ads: What You Need to Know

Google

Google is working harder to woo advertisers as the company faces stiffer competition from Amazon and Facebook. For example, Google rolled out responsive search ads and responsive display ads to make the advertising platform more flexible for brands. It is important that advertisers understand these features and how to maximize their value.

How Responsive Search and Display Ads Work

According to Google, responsive search ads make it possible for advertisers to enter multiple headlines (up to 15) and descriptions (up to four) when creating a search ad. Then Google Ads applies machine learning to automatically test different combinations and learn which combinations perform best. In addition, per Google, advertisers can add a third headline and second description to your text ads, and your descriptions can have up to 90 characters.

Responsive display ads work the same way, with advertisers submitting up to up to 15 images, five headlines, five descriptions, and five logos for a display ad. As with responsive search ads, Google uses machine learning to test different combinations and show the ads that work best. According to Google, “On average, advertisers see 10% more conversions at a similar CPA when using multiple headlines, descriptions, and images with responsive display ads (versus a single set of assets).”

What You Need to Know

Based on our experience with clients, I see some near-term ramifications:

  • Your advertising will become more effective. These formats are exciting because they capitalize on machine learning to scale your advertising content. As Google notes, “Great display ads assist consumers using rich images and useful information. However, showing the most relevant and engaging ads across millions of sites and apps isn’t easy.” Responsive ads are a compelling solution.
  • Organic content pays a price. By making ads more effective, Google will push organic listings down in search results.
  • You need to invest more effort. Yes, Google does do the heavy lifting when it comes to executing on your ads. But to get the most out of this format, you’ll need to come up with more variants of your message and images. (That’s the point of responsive search and display: Google takes multiple inputs to give you optimal results.) In addition, you’ll want to monitor which assets are performing best, which takes time and effort (although Google provides tips for doing so on its blog).

What You Should Do

  • Review your messaging strategy. Having more variants of your content presents an opportunity to review your messaging and differentiators. You obviously don’t want to create content willy-nilly. All your content should support your brand in some way.
  • Learn. The Google blog links I’ve shared above contain a number of tips for maximizing the value of these ads. For instance, with responsive search ads, Google advises that you include at least one of your keywords in your headlines, and create headlines that are relevant to the keywords you’re targeting. Furthermore, provide as many distinct headlines as you can. Per Google, “More headlines gives Google Ads more options for assembling your messages into relevant ads, which may increase performance.”

At True Interactive, we’re working with clients to plan and execute advertising with these and many other tools. We’ll report our learnings on our blog. Watch for our posts, and contact us if you need help with your online advertising.

How to Succeed in Amazon’s World

How to Succeed in Amazon’s World

Amazon

One of the most significant advertising stories of the year is the rise of Amazon as an ad platform. As we discussed on our blog earlier this year, Amazon’s advertising products have been enjoying phenomenal growth albeit off a much smaller base compared to Google and Facebook.

And Amazon shows no signs of slowing down. In September, eMarketer reported that in 2018, Amazon will become the third-largest digital advertising platform behind Google and Facebook. On October 8, CNBC reported that some advertisers are moving as much as half of their search budgets from Google to Amazon. According to CNBC, “Amazon appears to be emerging as the most credible threat to Google’s cash cow advertising business since Facebook conquered mobile advertising beginning shortly after its 2012 IPO.” Those reasons include:

  • Amazon’s continued growth as an ecommerce platform beyond retail, which gives Amazon a larger pool of advertisers.
  • Amazon’s popularity as a search engine. According to Survata, about half of product searches begin on Amazon.
  • Amazon provides a seamless search-and-purchase option. Per CNBC, unlike the case with Google, “Using a Google search ad to lead to a purchase may require a person to set up an account and input their credit card information with a separate website. Especially for smaller brands, there’s not really an advantage between selling direct to the consumer versus selling through Amazon.”

Google holds a strong lead over Facebook and Amazon. But especially for businesses that sell products on Amazon, Amazon’s advertising products are increasingly attractive.

To help our readers better understand how to succeed with Amazon’s advertising solutions, on our blog we are casting a spotlight on three Amazon products: sponsored ads, display ads, and video ads. The first post in our series, “Advertiser Q&A: Amazon Sponsored Ads,” is live. As my colleague Samantha Coconato writes, Amazon’s sponsored ads are Amazon’s pay-per-click (PPC) advertising solution. They are available to sellers, venders, book venders, and Kindle Direct Publishing. Sponsored ads take a consumer directly to a product page or brand site within Amazon.

To maximize the value of sponsored ads, advertisers should spend time to really think through which products and offers would make the most sense on this platform. For example, putting up ads for a seller’s entire inventory all year round would probably not be a wise use of your money. Pulsing the ads on and off during seasonal or clearance sales and using a promotion or discount would be a better way to generate sales and to raise awareness of your products or store.

For more insight into Amazon sponsored ads, check out our post. And stay tuned for more insight. If you have questions about maximizing the value of digital advertising, contact us. We’re here to help.

Photo by Christian Wiediger on Unsplash

Google Ruffles Feathers with Suggested Search

Google Ruffles Feathers with Suggested Search

Search

One of Google’s many useful search features is the “users also searched for” suggestion that appears in your search results. When you make a query for, say, car insurance or car loans, Google suggests similar phrases or words that people are also using. It’s a great feature, right? But not everyone thinks so.

Here’s why Google is ruffling some feathers with suggested search: businesses have begun to notice that Google has been dropping suggested searches amid advertising results. And those suggested searches can lead people to an advertiser’s competitor sites – potentially hijacking the ad. For instance, as depicted in Search Engine Land, if you search for car loans, Google may serve up ads for car loan offers, but then also tell you that people are also searching for car loan rates, new car loans, and other similar phrases:

The problem is that if you click on the eight suggested searches depicted in the above options, you may very well be taken to a site that competes with the advertisers such as Lending Tree and CarMax where the suggested searches appear – which is hardly good news for Lending Tree or CarMax.

Why Suggested Search Is Good for Advertisers

As Search Engine Land reported, advertisers are annoyed. But maybe they shouldn’t be. Here’s why:

  • If your ads are compelling with good creative and strong calls to action, you have nothing to worry about.
  • With the suggested searches, Google is providing ideas for you to test copy and to bid on keywords that might have escaped your notice.

By meeting the needs of users first, Google might actually be helping advertisers.

What do you think?

Amazon’s Advertising Business Explodes

Amazon’s Advertising Business Explodes

Marketing

 

Is there anything Amazon cannot do?

In its second quarter earnings announcement, Amazon reported another stellar performance, with earnings that far exceeded analysts’ projections. Its growth was uniformly strong across its businesses, ranging from its cloud computing operation, Amazon Web Services, to its core retail store.

The most intriguing aspect of Amazon’s growth is the way its advertising arm is faring.  As Reuters reported, “Highly profitable ad sales were a bright spot last quarter. The company said revenue from the category and some other items grew 132 percent to $2.2 billion. Analysts were expecting $2.1 billion, according to Thomson Reuters I/B/E/S.”

The company has now been profitable for three straight years. And although online advertising is not the biggest reason for that profitability, it’s becoming crucial to the company’s future, as Amazon continues to look for ways to counterbalance eroding margins from retail. What’s more, advertising growth means Amazon threatens Google and Facebook, with Facebook’s stock being battered in recent days as its advertising business faces a downturn. The Wall Street Journal sums up Amazon’s advertising growth as follows:

Amazon’s advantage is that it can tell advertisers when a consumer bought a product, showing an ad’s effectiveness. Amazon also is attracting spending that would have traditionally taken place in brick-and-mortar stores to ensure good shelf placement.

“Stepping back, it’s now a multibillion-dollar business for us,” Mr. Olsavsky said.

The hundreds of thousands of customers buying up ads include merchants and brands selling on the site, as well as authors and other advertisers who want to reach Amazon customers. The company is going to keep working on automating more of the process and inventing new products, too.

As we have noted on our blog, Amazon is growing its advertising services the way Google has always done: by offering tools that make it easier to rely on Amazon as an advertiser. For instance, Amazon’s Marketing Services and Advertising Platform products offer options ranging from Sponsored Products (a keyword-based campaign promoting a single product) to Amazon Managed Service (Amazon manages display ads on an advertiser’s behalf). These products make it possible to capitalize on Amazon’s increasing popularity as a search platform.

Amazon is building a strong advertising ecosystem that is now extending beyond its core website. As Amazon develops more advertising products, the company will continue to threaten Facebook and Google. Our advice to clients: pay attention to Amazon’s growth and begin to experiment with Amazon advertising if you have not done so already. Get smart on the platform. For more insight, contact True Interactive. We’re here to help.