Why Google Is Doubling Down on E-Commerce

Why Google Is Doubling Down on E-Commerce

Advertising Google YouTube

How often do you go shopping on Google? If your answer is “Never,” you’re not alone. Google is feeling the heat from Amazon’s rise as an e-commerce giant. Most product searches begin on Amazon, not Google. Amazon is easily the Number One online retailer, and that’s saying something at a time when e-commerce growth overall has accelerated by five years.  And throughout the past few years, Amazon has been building on all that search and purchase activity to create a gold mine of customer data that it has used to develop a thriving advertising practice. Although Google remains the largest online advertising company, Amazon is coming on strong. All this is why Google announced a major change September 29 to compete more effectively with Amazon.

What Google Announced

Google announced that it is:

  • Making online searching and shopping more visually appealing by emulating the product display features you see on Amazon. For certain items such as apparel, Google will return search results with a product results that page that resembles a visual store, not a list of links and text descriptions.
  • Soon introducing a new way to search visually, with the ability to ask questions about what you see. According to a Google blog post, “With this new capability, you can tap on the Lens icon when you’re looking at a picture of a shirt, and ask Google to find you the same pattern — but on another article of clothing, like socks. This helps when you’re looking for something that might be difficult to describe accurately with words alone. You could type ‘white floral Victorian socks,’ but you might not find the exact pattern you’re looking for. By combining images and text into a single query, we’re making it easier to search visually and express your questions in more natural ways.”
  • Including in search a feature, “Things to know,” that will make it easier to explore and understand new topics. For example, if a person searches for “acrylic painting,” Google understands how people typically explore this topic, and shows the aspects people are likely to look at first though “Things to know.” Google says it can identify more than 350 topics related to acrylic painting in this example.
  • Introducing a new experience that identifies related topics in a video, with links to easily dig deeper and learn more. Per Google, “. . . we can even show related topics that aren’t explicitly mentioned in the video, based on our advanced understanding of information in the video.” Interestingly, Bill Ready, Google’s president of commerce, told the Wall Street Journal that Google “wants to stitch e-commerce across Google’s entire suite of offerings from search to maps to YouTube. Mr. Ready envisions people watching a YouTube video of someone unboxing new apparel and viewers being able to click nearby to purchase the items, or being served an ad on Google Search if they later look for the clothes.”

What Advertisers Should Do

  • Capitalize on Google’s advertising tools that are designed to be more visually appealing. For instance, Google recently rolled out Discovery ads, which are image-rich ads designed for a more “laid back” search experience (more about that here). Google is clearly doubling down on the visual web, and advertisers should expect more visually appealing ad products as it attempts to become a stronger e-commerce player.
  • Make use of more tools that make it easier to connect online searching and shopping. Google isn’t the only company figuring out search and commerce. Instagram is another, as we discussed in a blog post recently. And there are many more apps doing the same thing.
  • Do a gut-check with your organic search team. How well are they aligning content with visual search, for example? How will Google’s “Things to know” feature affect the depth and breadth of content that you provide on your website, Google My Business listing, and elsewhere?
  • Keep your eyes open and your budgets flexible. The online advertising space is getting more competitive and interesting for retailers. We have been blogging about the rise of Amazon Adverting for some time – as well as the growth of advertising services from retailers such as Macy’s, Walmart, and Walgreens. They’re all using their first-party customer data to build online advertising platforms. Depending on your target audiences, they may provide very competitive alternative to Google – an example being Macy’s for fashion-conscious shoppers or Walmart for advertisers whose audience aligns with Walmart’s multi-channel customer. (And we can help you succeed on all these platforms.)

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Why Facebook’s Ad Business Will Take a Hit — and What Advertisers Should Do

Why Facebook’s Ad Business Will Take a Hit — and What Advertisers Should Do

Apple Facebook Uncategorized

On September 22, Facebook made an unusual announcement well ahead of its third-quarter earnings, which won’t be shared until late October. In a blog post, Facebook indicated that its third-quarter results will take a hit because of the impact of Apple’s increased privacy controls. Let’s take a look at the news and what it means.

What Facebook Announced

  • Facebook confirmed that for the third quarter, the company’s advertising business will take a financial hit because of the impact of Apple’s Application Tracking Transparency (ATT), which went into effect in 2021 with a recent iOS update on users’ personal devices.
  • Under ATT, users are asked to give apps permission to track their behavior on their Apple devices. Facebook needs Apple users to give apps permission to track their behavior; Facebook has built a thriving advertising business based on its ability serve up targeted ads to iOS users based on their behavior off Facebook. But as many as 96 percent of users in the United States are opting out of having their behavior tracked.
  • In a blog post, Graham Mudd, vice president of Product Marketing, Facebook, wrote, “As we noted during our earnings call in July, we expected increased headwinds from platform changes, notably the recent iOS updates, to have a greater impact in the third quarter compared to the second quarter. We know many of you are experiencing this greater impact as we are.”
  • Mudd also said that Facebook underreported iOS web conversions by approximately 15 percent. “We believe that real world conversions, like sales and app installs, are higher than what is being reported for many advertisers,” he wrote.

What Facebook’s Announcement Means

  • Facebook’s war with Apple will intensify. Apple could find ways to impose even more privacy controls.
  • More advertisers will bolt to the Android operating system and take their ad business to Google.
  • Facebook will be forced to become more transparent to ad partners about its ad performance, especially after admitting that the company underreported iOS web conversions.
  • Facebook will probably devise more ways to mine first-party data from its own platform and Instagram to sell ad space.

What Advertisers Should Do

  • Consider tapping into your own first-party data more effectively to create ads (and True Interactive can help you do so). For example, collect more first-party data by using cookies to understand who visits your site; or run a promotion that collects email addresses. Collect purchase data if applicable to your site.
  • Consider relying on advertising platforms such as Amazon and apps such as Snapchat and TikTok that have strengthened their own ad products through their own proprietary first-party data.
  • Watch for the emergence of new tools and approaches. Apple’s ATT will inspire the emergence of workaround tools as well as approaches for developing personalized content. This is happening already as Google adopts privacy controls.
  • Review Facebook’s advice for how to analyze your performance and adapt your ad strategies on Facebook (or ask your agency partner to do so for you). Mudd provided some detailed steps to take in his post.
  • Consider negotiating more favorable rates for your ad account with Facebook if your performance is dropping but you still want to work with Facebook.
  • Don’t panic and change your ad strategy completely. This situation is still evolving.

At True Interactive, we’re doing the heavy lifting to help our clients navigate these changes. Bottom line: be ready to adapt.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

The Impact of Apple’s New iOS Privacy Controls

The Impact of Apple’s New iOS Privacy Controls

Apple

Earlier in 2021, Apple tightened privacy controls through an update to its iOS operating system. The news created alarm among advertisers and ad platforms (notably, Facebook) who said they believe Apple is hurting their ability to serve up effective and relevant advertising. So, what’s happened since then? Let’s take a closer look at the aftermath of Apple’s controversial decision.

Apple Announces Application Tracking Transparency

The privacy control that Apple launched is known as Application Tracking Transparency (ATT). ATT requires apps to get the user’s permission before tracking their data across apps or websites owned by other companies for advertising, or sharing their data with data brokers. Apps can prompt users for permission, and in Settings, users will be able to see which apps have requested permission to track so they can make changes to their choice at any time.

When Apple previewed ATT in 2020, Facebook led an angry protest from advertisers who were upset that the new opt-in program would result in plunging ad revenues and less relevant advertising resulting from a loss of personalization. Facebook argued that ATT would be unfair to the many small businesses that rely on Facebook.

The Impact of Application Tracking Transparency

So, what has happened since ATT went live? So far, here are the major developments:

  • Users reject tracking. As many as 96 percent of users in the United States are opting out of having their behavior tracked. Those high opt-out rates out do not kill advertising at all. In fact, businesses that have amassed proprietary first-party user data should continue to provide relevant ads. But businesses that rely on tracking behavior across the web will need to accept the reality that their ads are less targeted.
  • Advertisers flee Apple. Many advertisers are not waiting to discern the potential impact of ATT. According to The Wall Street Journal, prices for mobile ads directed at iOS users have fallen, while ad prices have risen for advertisers seeking to target Android users. That’s because a number of businesses are shifting their ad budgets to the Google Android operating system and away from Apple’s iOS. This shift does not affect Apple because Apple collects no ad revenue from third-party iOS apps. We do not yet know how Google may benefit from the shift (and Google does rely on ad revenue heavily).
  • No impact on Facebook – so far. Facebook announced its second-quarter 2021 earnings on July 28. The company’s ad revenues showed no sign of slowing down and beat Wall Street expectations: $29.08 billion, vs. $27.89 billion as expected by analysts, according to Refinitiv. Facebook said advertising revenue growth in the second quarter of 2021 was driven by a 47 percent year-over-year increase in the average price per ad and a 6 percent increase in the number of ads delivered. But Facebook has not backed off from its position that ATT is going to hurt the company and advertisers. The company lowered is earnings outlook for the third quarter partly because the company believes ATT’s impact has yet to be felt. In its earnings announcement, Facebook said, “We continue to expect increased ad targeting headwinds in 2021 from regulatory and platform changes, notably the recent iOS updates, which we expect to have a greater impact in the third quarter compared to the second quarter.”
  • Twitter shrugs off ATT. Twitter, like Facebook, says it has not been affected by ATT (so far). In its latest quarterly earnings, Twitter showed robust revenue growth. Twitter also said that the impact of ATT was lower than expected. And Twitter is more optimistic about the potential impact of ATT going forward. In its earnings announcement, Twitter said, “We continue to expect total revenue to grow faster than expenses in 2021 — assuming the global pandemic continues to improve and that we continue to see modest impact from the rollout of changes associated with iOS 14.5.”

What Advertisers Should Do

  • Examine your ad performance. Examine the effectiveness of your advertising on iOS. Have you lost your ability to bid on ads because of users opting out of being tracked? Is your ad performance actually slipping? If you work with an agency to manage your ads, ask them for a complete report. And then examine your performance throughout 2021. If you see a noticeable slide, then adapting your spend to Android may make sense, but if your performance is only marginally affected, remember that your competitors are probably experiencing the same outcome.
  • Consider tapping into your own first-party data more effectively to create ads (and True Interactive can help you do so). For example, collect more first-party data by using cookies to understand who visits your site; or run a promotion that collects email addresses. Collect purchase data if applicable to your site.
  • Consider relying on advertising platforms such as Amazon and apps such as Snapchat that have strengthened their own ad products through their own proprietary first-party data.
  • If you rely heavily on Facebook as an ad partner, heed Facebook’s detailed advice for adapting to ATT (or ask your agency partner to do so).

At True Interactive, we’re doing the heavy lifting to help our clients navigate these changes. Bottom line: be ready to adapt. But don’t panic.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Photo by Zhiyue Xu on Unsplash

For More Insight

Apple Announces New Privacy Features,” Mark Smith.

The Facebook Spat with Apple: Advertiser Q&A,” Taylor Hart.

Google Responds to Apple’s App Tracking Transparency,” Taylor Hart.

 

Google’s Optimized Targeting Feature: Advertiser Q&A

Google’s Optimized Targeting Feature: Advertiser Q&A

Google

Managers of Google Ads accounts were surprised recently when Google began to gradually roll out a new feature, optimized targeting, apparently with little fanfare. It’s important that Google Ads users understand what’s going on with optimized targeting. The new feature may provide benefits but also higher costs for performance marketers. Let’s take a closer look.

What Is Optimized Targeting?

According to Google, optimized targeting helps businesses using Google Ads to reach new and relevant audiences who are likely to convert. Optimized targeting looks beyond manually selected audience segments in a campaign in order to find audience segments that an advertiser might have missed. The overall goal of optimized targeting is to improve the campaign’s performance.

When Should a Business Use Optimized Targeting?

Per Google, optimized targeting works best when a business wants to expand an audience segment most likely to convert, acquire new customers (beyond existing segments), identify new audiences who will perform well for an existing campaign, and increase conversions without increasing bids or the cost per customer. A recent Search Engine Land article notes that optimized targeting is beneficial if an advertiser is not sure who their audience is.

What’s the Difference Between Optimized Targeting and Audience Expansion?

Many advertisers already use the Google Ads audience expansion feature to expand an audience segment. Audience expansion does so based on an advertiser’s manually selected audience segments. Optimized targeting uses real-time conversion data to find more users who are more likely to convert.

Google cites the hypothetical example of a business that wants to attract people to the upcoming launch of a new running shoe. The business targets people using two audience types: a custom segment based on top performing keywords from their search campaigns (e.g., “running shoe sale”), and the “athletic footwear” in-market segment. Audience expansion and optimized targeting may handle the company’s campaign as follows:

  • Audience expansion: in addition to the business’s manually selected audience segments, audience expansion includes similar segments such as the “trainers sale” custom segment and the “sporting goods” in-market segment.
  • Optimized targeting: optimized targeting expands to users who are likely to convert by creating a profile of what a converter looks like based on real-time conversion data. For example, that data could include Google searches for specific running shoe brands or clicks to a popular sportswear website. While advertisers’ manually selected audience segments provide a starting point, optimized targeting looks for conversions outside of their selected segments.

According to Google, Discovery and Video campaigns that use audience expansion will transition to optimized targeting.

How Do I Get Started Using Optimized Targeting?

If you manage a Google Ads account, Google already got the ball rolling for you by enabling optimized targeting for all campaigns automatically. And you might encounter an initial fluctuation in your Google Ads costs as a result. Per Search Engine Land, “This could potentially be an expensive option if your budget is lower as your initial conversion quality could fluctuate as the data is collected and optimized targeting figures things out.”

What if you don’t want Google to automatically enable optimized targeting? To disable it, you need to change your ad group settings. If an ad agency manages your account for you, ask them how they are managing this feature and the impact on your budget. At True Interactive, we’re keeping a close eye on this new feature and protecting our clients’ budgets.

Our advice to advertisers who use Google Ads:

  • Watch your account closely. As Search Engine Land reported, managers of Google Ads accounts began to notice the roll-out of optimized targeting through a new “Signal” indicator that appeared in their Google Ads account.
  • Watch your budget closely. As noted, the automatic roll-out of optimized targeting could create an increase in costs.
  • Work closely with your ad agency partner to understand what’s happening and why. If you work with Google directly, reach out to your Google rep and ask for clarity about any future product changes in store.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here, and learn about our services here.

Apple Announces New Privacy Features

Apple Announces New Privacy Features

Apple

Apple has once again made some moves to make the internet more private. At its 2021 Worldwide Developers Conference (WWDC), Apple announced new features intended to give consumers more control over how businesses interact with them. Let’s take a closer look.

What Privacy Controls Did Apple Announce at WWDC?

Apple announced that later in 2021, the company will roll out new features to help people control how their online data is used by third parties. They include:

  • Allowing people to disable the ability of marketers to see if and when an email is opened via Apple’s Mail app.
  • Making it possible for people to hide their internet protocol (IP) address information in order to prevent businesses from tracking web usage on the Safari browser.

In addition, Apple indicted that premium iCloud users will be able to access the internet with a feature called Private Relay. This feature will  block network providers from using IP addresses and web usage to create a user profile for tracking.

Why Does Apple’s WWDC Announcement Matter?

The news from WWDC is the latest in a series of actions from technology giants Apple and Google to make it more difficult for businesses to track users in order to deliver personalized advertising. For instance:

  • In 2020, Google announced it would stop supporting third-party cookies on the Chrome browser. In 2021, Google toughened its stance by saying it would not support workarounds for third-party cookie tracking.
  • Apple recently launched a privacy control known as Application Tracking Transparency (ATT), which requires apps to get the user’s permission before tracking their data across apps or websites owned by other companies for advertising, or sharing their data with data brokers.

The advertising world has reacted with a mixture of concern and resignation as businesses adapt to a reality in which third-party cookies will be less useful for creating targeted advertising. In addition, Facebook has argued that Apple’s ATT will hurt small businesses that rely on Facebook’s advertising tools to create personalized content.

How Will the WWDC Announcement Affect Advertisers?

It’s really too early to say yet how advertisers will be affected by Apple’s latest announcements. For one thing, they have not been launched yet. In addition, although Safari is the second-most popular browser in the world, it lags far behind Chrome in terms of usage. On the other hand, Chrome and Safari together constitute 83 percent of the global market share for browsers. The real impact will be seen when both Google’s and Apple’s tighter restrictions take hold together. It will be interesting to see the impact of the restrictions in Apple Mail, which has the largest market share among email apps.

What Should Advertisers Do?

As I noted in a recent blog post,

  • Don’t assume targeting and personalization are dead because of the way Apple and Google are focusing on privacy. You can still use your own data to buy targeted ads on Google properties such as YouTube, Gmail, and Google Search – so long as you bring their first-party data into Google through the company’s existing Customer Match product. Moreover, as we noted in a recent blog post, if you want to use your own data to serve up targeted ads outside Google’s walls, Google is developing its own cohort-based alternative to third-party cookies to help you do that. Stay tuned for more product developments.
  • Do consider tapping into your own first-party data more effectively to create ads (and True Interactive can help you do so). For example, collect more first-party data by using cookies to understand who visits your site; or run a promotion that collects email addresses. Collect purchase data if applicable to your site.

My blog post “Google Unlocks First-Party Data for Publishers” contains more tips.

At True Interactive, we’re doing the heavy lifting to help our clients navigate these changes. Bottom line: be ready to adapt. But don’t panic.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Photo by Laurenz Heymann on Unsplash

For Further Insight

Five Lessons From the 2021 Ad Spending Surge

Five Lessons From the 2021 Ad Spending Surge

Advertising

Ad spending is surging. As reported in The Wall Street Journal, U.S. companies are expected to spend 15 percent more on advertising in 2021 year than they did in 2020. That’s because consumer confidence is increasing, and the pace of Covid-19 vaccinations is accelerating. And digital is getting a bigger share than ever of the advertising pie:

Digital Share of Ad Spending

Announcements from technology giants and social media apps in recent days underscore just how much businesses are investing into digital advertising:

  • As we reported on our blog, Amazon Advertising and Facebook reported strong year-over-year ad revenue growth in their most recent quarterly earnings announcements.
  • Alphabet announced 32 percent year-over-year ad growth for Google, demonstrating an impressive rebound from a slump triggered by the pandemic.

Amid this spending surge, we see some important lessons emerging:

  • Businesses that maintained their spending levels during the depths of Covid-19 in 2020 are at an advantage over those who pulled back and are now kickstarting their spending. Consumer behavior and sentiment are changing faster than ever. We predicted in 2020 that reducing ad spend during the pandemic would catch businesses flat-footed when consumer behavior shifted again – as it has done in 2021.
  • We’ve hit an inflection point with digital. As the stay-at-home economy takes hold, consumers are remaining online at higher levels than ever. As a result, online spending continues to accelerate. Businesses that asked, “But how long will the growth last?” in 2020 fell behind those that saw the surge for what it is: a behavioral change. The faster businesses adapt to those changes by boosting their online advertising, the sooner they’ll attract shoppers online.
  • The tech giants are experiencing a golden era. We’ve seen the tech giants – namely Amazon, Apple, Facebook, Google, and Microsoft – experience heavy criticism in recent years for reasons too numerous to summarize in a blog post. And of course the specter of antitrust lawsuits looms over Facebook and Google (and Apple in Europe). On top of that, they’re at war with each other, and the demise of third-party cookies calls into question how well advertisers will be able to target consumers across these platforms. But guess what? Amid the blowback, the tech giants continue to run the table, as noted above. Smart advertisers aren’t allowing negative headlines to scare them away from the tech giants. They’re watching how these platforms innovate with new ad units that monetize the surging online audience.
  • Retail ad platforms are on the rise. Savvy marketers are capitalizing on the fact that retailers such as Amazon, Dollar Tree, Kroger, Macy’s, Target, and Walmart are monetizing their first-party customer data by building ad businesses. Each retailer can give advertisers access to different types of consumers. We expect more of these platforms to emerge, contributing to robust ad growth.
  • Social commerce is going to fuel more ad spending. As we discussed on our blog recently, businesses should capitalize on social commerce advertising tools such as Pinterest Product Pins, through which a business can connect its product catalog to Pinterest, filter and organize inventory, create shopping ads, and measure results; or numerous ad units on Instagram that make it easier for businesses to turn advertising into shopping experiences.

We urge businesses to take a fresh look at how your customers’ journeys are changing amid the rise of digital-first living and spending. Monitor performance closely as consumer behavior fluctuates. Businesses that invest in strong real-time analytics tools will have the upper hand.

Contact True Interactive

At True Interactive, we know how to help businesses navigate the complex waters of online advertising. Contact us. Learn more about our work here.

Photo by Adem AY on Unsplash

Google Unlocks First-Party Data for Publishers

Google Unlocks First-Party Data for Publishers

Google

Google continues to nudge businesses away from using third-party cookies to personalize ads and toward the management of first-party data. On March 11, Google announced some product developments intended to make it easier for publishers to use their first-party data programmatically for ad buys. Let’s take a closer look.

What Google Announced

Google is going to help publishers expand the use of Publisher Provided Identifiers (PPIDs) in Ad Manager to more programmatic campaign types, including the Open Auction. PPIDs are created from anonymized first-party data and then fed into Google Ad Manager by the publisher. PPIDs improving functions such as audience segmentation and frequency capping. Publishers will now be able to surface their first-party data programmatically for buyers — so long as they use Google as their intermediary.

As AdExchanger explains,

The PPID’s technical setup works like this: the publisher will create a unique ID for users, based on a first-party cookie or a log-in ID. Then it will put that ID into Google Ad Manager, and choose who it wants to share that data with. Google will hash that ID and pass it through to buyers.

Buyers won’t know that PPID 123 is a sports fan in an open auction. But as they observe the ID in bid requests, they may notice that the user ID goes to a sports site frequently, for example, and deduce that a buyer is a good fit for an ad campaign.

Google also said it is experimenting with functionality that will provide publishers with the option to share encrypted data directly with advertisers with whom they already have a direct relationship. Publishers will have full control over what data is collected, and who can receive the data. Google will not be able to read or decrypt the data. Ad Manager will only act as an intermediary on behalf of the publisher to pass the signals to the third-party bidders they choose.

What the News Means

The announcement is another sign of Google’s intention to bring about the demise of third-party cookies and push businesses toward using first-party data to personalize content. Over the past several months, Google has announced that it would stop supporting third-party cookies on its Chrome browser and that Google would reject alternatives to third-party cookie tracking. As an alternative, Google is developing alternatives to third-party cookie tracking in Google’s privacy sandbox. Tellingly, Google also noted in a March 3 blog post:

We will continue to support first-party relationships on our ad platforms for partners, in which they have direct connections with their own customers. And we’ll deepen our support for solutions that build on these direct relationships between consumers and the brands and publishers they engage with.

Google’s March 11 post now shows that Google is going to nudge publishers to use their first-party data more effectively.

What Advertisers Should Do

Flexibility and patience are key. Don’t assume targeting and personalization are dead. You can still use your own data to buy targeted ads on Google properties such as YouTube, Gmail, and Google Search – so long as you bring their first-party data into Google through the company’s existing Customer Match product. Customer Match takes information a consumer gave to a brand, such as an email address, and determines whether it matches data Google already has. If so, advertisers can work with Google to send an ad to that individual. Moreover, as we noted in a recent blog post, if you want to use your own data to serve up targeted ads outside Google’s walls, Google is developing its own cohort-based alternative to third-party cookies to help you do that. Stay tuned for more product developments.

Do consider tapping into your own first-party data more effectively to create ads (and True Interactive can help you do so). For example, collect more first-party data by using cookies to understand who visits your site; or run a promotion that collects email addresses. Collect purchase data if applicable to your site. Note that brands that have relationships with publishers can pass first-party data directly to those publishers, outside the Google environment, and still manage the buy inside Google’s automated ad-buying system Display & Video 360 (often called DV360). But the use of data and the ad buy will be supported by proposed methods that enhance privacy as discussed in Google’s March 11 blog post.

At True Interactive, we’re doing the heavy lifting to help our clients navigate these changes.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

For more reading:

Google Rejects Alternatives to Cookie Tracking: Advertiser Q&A.”

Google to Stop Supporting Third-Party Cookies on Chrome: Advertiser Q&A.”

Photo by Mitchell Luo on Unsplash