Why You Shouldn’t Move Your Online Advertising Budget From Google to Amazon

Why You Shouldn’t Move Your Online Advertising Budget From Google to Amazon

Google

In the advertising world, the meteoric rise of Amazon Advertising is capturing a lot of buzz and inspiring commentary, including posts we’ve published on our own blog. At the same, Amazon Advertising’s biggest competitors, Google and Facebook, are as strong as ever. Consider the growth of Google’s own advertising business, which dominates the world of online advertising, even as Google’s share of the online ad market drops slightly, per eMarketer. Here’s the skinny:

Alphabet Reports Strong Earnings

Alphabet, Google’s parent company, surprised analysts recently by reporting stronger-than-expected earnings. As reported in Search Engine Land, Google produced $32.6 billion in advertising revenue in Alphabet’s second quarter. That’s a 22 percent increase year after year, and an uptick after several quarters of slowing growth.

The surge in advertising revenue for Google has a lot to do with Alphabet’s strong earnings. And advertising simply grew a lot better than expected. As Business Insider reported, “A resurgence in Google’s core advertising business, after a weak performance in the first quarter of the year . . . pushed Google’s net revenue up.” Interestingly, the earnings report came out on the same day that Amazon announced mixed results.

Why did Google Report Strong Growth for Its Advertising Business?

No one knows exactly why Google’s been nailing it with its advertising, because the company remains mum about the details. But as The Street pointed out, YouTube probably had something to do with it. Ruth Porat, Google’s Chief Financial Officer, revealed that YouTube revenue represented the second-highest growth of any segment for the search behemoth. And as management noted, “[W]e are building momentum with our subscription services, YouTube Music and YouTube Premium, now available in over 60 countries, up from five markets at the start of 2018.”

We also believe Google is succeeding because the company isn’t standing still and taking success for granted. As we discussed on our own blog, Google continues to launch new features and tools such as artificial intelligence (AI) to help advertisers launch smarter, more targeted campaigns. The headline is this: whether through paid search ads or display ads, Google has been making it easier for advertisers to do the work.

What You Should Do

What does Google’s trajectory mean to the savvy marketer? We recommend that you:

  • Stay abreast of the industry, and keep your options open. That includes staying calm in the face of inevitable fluctuation. For example, according to ad industry sources, some advertisers are defecting from Google and moving 50 to 60 percent of their ad budgets to Amazon. But news like this isn’t a reason to get rattled—or abandon Google. It doesn’t mean advertising should be an either/or between Amazon, Google, or Facebook. Ebbs and flows notwithstanding, the opportunities Google represents can’t be discounted. And no matter how much Amazon grows, Google is not going away. Brands that devote all their advertising resources to one outlet are likely to get burned—or miss out on opportunity.
  • Understand how Google is evolving. Google will continue to grow its ad business, drawing on several key advantages:
    • A head start in using AI with the specific aim of making advertising smarter and more effective. It’s true: AI is hot, and Google faces competition from Amazon and Facebook in this arena. But as noted above, the company is holding its own with a battery of AI tools.
    • An established global presence that reflects Google’s efforts to tailor advertising products in support of international ad campaigns.

Google continues to sense and respond to consumer tastes, even when Google’s profit motive is not evident. A good example is the forthcoming release of Stadia, the cloud-based gaming platform that Google announced recently. How Google will make money off Stadia is not clear immediately. But one thing is clear: Google is finding a way to keep people using Google by launching new products accessible through Google.

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What Is Stadia?: Advertiser Q&A

What Is Stadia?: Advertiser Q&A

Google

Over the last decade, streaming has become one of the most disruptive forces media, changing the way we experience everything from movies to music. Now Google, with a new cloud-based gaming platform called Stadia, hopes to use streaming to irrevocably shape the way we play. Here are answers to questions you may have about it.

What Is Stadia?

Stadia is Google’s new cloud-based gaming service that will be accessible through multiple mobile devices including PCs, laptops, smartphones, and smart televisions and tablets. Instead of purchasing a game at a brick-and-mortar store or downloading a title on their console, gamers will simply stream the games running on Google’s cloud servers. As announced at Google Stadia Connect and Gamescom 2019 in August, the catalog currently includes 39 games ranging from Cyberpunk 2077 to Mortal Kombat 11, Attack on Titan 2: Final Battle, and Kine.

According to John Justice, VP of product for Google Stadia, the goal is to bring “all the games you’d expect to have” to Stadia, as well as games “only possible in the cloud.” Games are streamed from Google’s constantly upgraded servers, which means players don’t have to monitor (or wait for) downloads or updates.

And the platform is meant to allow for the multiple ways gamers play. As Google VP Phil Harrison told Eurogamer, “[The word ‘Stadia’ is] the plural of stadiums . . . A stadium is a place where you can have, obviously, sports, but it’s also a place where you can have entertainment. And so we wanted that to be our brand idea, which was a place for all the ways that we play and this idea of watching, playing, participating . . . where you could take a slightly ‘lean-back’ view of a game [if you wanted to]. You don’t necessarily have to be leaning into every last button press per second of a game.”

When Does Stadia Go Live?

Google Stadia’s Founder’s Edition will be released in November 2019 in 14 territories including the United States, UK, and Canada. Those who opt for the Founder’s Edition will drop $130—less than the price of a new PS4—for a Chromecast Ultra and a limited-edition “Night Blue” controller. These early adopters will receive not only the hardware, but also three months of free premium service (called “Stadia Pro”—more details below). They’ll also receive a three-month “Buddy Pass” so that a friend can also enjoy Stadia Pro.

Why Is Google Interested in Gaming?

A shift into the video game business may seem like a big move for Google, but gaming is a lucrative industry. According to market analysis firm Newzoo, the video game industry produced roughly $135 billion in sales in 2018. GlobalData predicts that number will balloon to $300 billion by 2025.

Who Is Google Competing against with Stadia?

As far as game streaming is concerned, Google isn’t the only company exploring this new frontier. Microsoft is in the midst of planning its own offering, called xCloud. Twitch is a well-known and popular platform owned by Amazon subsidiary Twitch Interactive and introduced in 2011, which focuses on video game live streaming.  And Playstation Now, from Sony, allows PlayStation owners to instantly access a library of (mostly older) games for $99 a year, even as Sony promises to take that service “to the next level later this year.” Meanwhile, Apple will launch its own subscription gaming service, Arcade, September 19.

How Will Google Make Money off Stadia?

Although Stadia has been predicted to be the “Netflix of games,” the analogy isn’t a perfect one: Stadia is not primarily a subscription service. Gamers should expect to purchase, not rent, the games they play using the service (with the exception of some free releases). As Google’s director of games Jack Buser told The Verge, “We will sell these games like any other digital storefront.”

The service itself comes in two tiers:

  • Players can get Google Stadia for free via Stadia Base, which is due out in 2020 and will allow streaming of purchased games with stereo sound. The catch? Gamers won’t have access to free game releases when they occur.
  • To get all features, including 5.1 surround sound and access to the free game library, users will pay $10/month for Stadia Pro.

What we no one knows yet is what kind of advertising opportunities might exist with Stadia. Knowing Google, the company will figure out an ad model to support its online advertising business, which is fending off the rising popularity of Amazon Advertising and long-standing competitor Facebook. Stay tuned.

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What Advertisers Should Do about Zero-Click Searches on Google

What Advertisers Should Do about Zero-Click Searches on Google

Google

Bad news for businesses in their ongoing efforts to optimize their websites for search traffic: for the first-time ever, more than half of search queries on Google result in no clicks to sites. According to marketing analytics firm Jumpshot, most people who search for content from Google find what they want from the search engine results page and don’t bother to click through to a website for more information. What happens on Google stays on Google.

In addition, per Jumpshot, Google continues to send “a huge portion of search clicks to their own properties . . . Those properties include YouTube, Maps, Android, Google’s blog, subdomains of Google.com, and a dozen or so others.”

Why the Rise in Zero-Click Searches?

Why the rise in zero-click searches? Because more than ever, Google is doing its job serving up essential information in response to queries. Over the years, Google has made it possible for business owners to build out rich, informative Google My Business (GMB) pages with information ranging from offers to customer/ratings reviews. Those pages form the foundation for businesses to be found on Google properties such as Google Maps.

GMB pages have become so useful and informative that people are finding what they want (“Find a grocery store near me”) in the knowledge panel of a business without needing to go to a business’s website. In fact, a company’s GMB page is now the single-most important way to attract local search traffic, according to Moz.

Meanwhile it’s no surprise that Google sends a huge proportion of clicks to its own sites. Facing rising competition from Amazon Advertising, Google is under pressure to keep its advertising business strong. To do so, Google needs to keep eyeballs on Google properties, where users are exposed to Google advertising (in May, we noted on our blog that Google is expanding its ad business on Google Maps, to name just one example).

What Advertisers Should Do about Zero-Click Searches

So what should advertisers do? You should:

  • Build up your GMB page. If organic queries are increasingly going to your GMB and staying there, then make sure you’ve optimized your GMB content – including images, customer ratings/reviews, and location data – to be found.
  • Link your GMB account to your Google Ads account. As Google discusses in this tutorial, linking your GMB account to your Google Ads account makes it possible for your ads to appear with location extensions, which encourage customers to visit your storefront. Through location extensions, customers can see your ads with location information such as your address. And then they can get more information about your location by clicking on location extensions.
  • Make sure you’re capitalizing on Google ad products throughout the Google ecosystem. With Google keeping more searchers on Google and its properties, it behooves advertisers to capitalize on where that search activity is occurring.

In addition, Jumpshot’s Rand Fishkin suggests that advertisers seek out keywords whose results have higher click-through rate (CTR) opportunity. He told Search Engine Land, “I think paid search CTR will probably decline over the next few months. That’s because historically, each time Google changes how paid ads appear in the search results (like the late May shift to the black ‘Ad’ labels in mobile SERPs), ad CTR rises, then slowly declines as more searchers get familiar with the ad format and develop ad blindness.”

At the same time, I would be surprised if Google were to leave itself vulnerable to the risk that searchers won’t click on ads.

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What Advertisers Should Do about the Rise of Voice Search

What Advertisers Should Do about the Rise of Voice Search

Search

We’re living in an era in which people are using their voices to do everything from shop to check the weather. Signs continue to indicate that the rise in voice is more than a passing trend. In fact, recent data shows that businesses need to pay closer attention to voice search and the impact it can have on advertising and organic content.

What Are the Latest Statistics about Voice?

  • According to a 2019 report from Microsoft, 72 percent of people use voice search through a personal digital assistant, and 75 percent of households will be outfitted with at least one smart speaker by 2020.
  • A 2018 BrightLocal study reveals that over a 12-month period, 58 percent of surveyed consumers used voice search to find local business information. In addition, Forbes notes that consumers want voice search to help them with myriad tasks, including:
    • Making reservations.
    • Gathering price data on services and products.
    • Confirming whether an item is available.
  • According to estimates from eMarketer, more than 74 million Americans — almost 27 percent of the U.S. population — will be using smart speakers in 2019, a 15 percent uptick from 2018.

What Should Businesses Do about Voice?

In short, it’s becoming a world in which businesses must be prepared to use voice for advertising. As Jelli CEO Mike Dougherty shared with Forbes, voice will “open up opportunities for marketers and brands to get creative and interact with customers in new ways . . . The goal of any marketer is to establish a genuine connection with customers. Voice is their chance to get one step closer.”

Jennifer Hungerbuhler, the EVP and managing director, local video and audio investment, at Dentsu Aegis Network, concurs. She also notes that voice search will not only be important in the marketing, advertising, and media worlds, it will continue to evolve.

How Should Businesses Prepare for Voice?

Part of staying relevant in a world of voice search means understanding voice, and creating content that optimizes how voice works. For instance, as we have discussed on our own blog, advertisers should evaluate voice search queries and pay attention to the conversational text that occurs.

Conversational text, which tends to be more complicated than simple Google searches, is a clear indicator of how people express themselves during voice search. It can be an excellent resource when companies want to write copy consistent with how people are using their voices to search. “Who,” “What,” “Where,” “When,” “Why,” and “How” are great words to focus on. Long-tail queries that include natural phrases such as “near me” or “can I get the number for” can also be useful/telling. These queries can help identify what consumers most want to know about a company’s products or services—and how they parse their request via voice.

As Hungerbuhler notes, “Advertisers will need to get better at understanding how consumers want to find them in voice, the language they will use to do so, and how they can get onto a shopping list.”

The bottom line? Search behaviors are different when consumers use voice. Because brands, increasingly, want voice assistants to find their site, savvy businesses will tweak their advertising and organic content accordingly.

What You Should Do Next

What are next steps in this brave new world?

  • Prepare now by rethinking your approach to content.
  • Don’t panic. Realize that even though people are using voice assistants, it doesn’t mean they are doing so in droves. According to research firm Stone Temple, voice assistants still rank behind other choices such as mobile browsers or search engine apps.
  • But do act. Voice search isn’t going away. Andy Franco, the founder of Facebook advertising agency Live Surge, explains, “Just like search has become second nature to people who used to use card catalogs, voice is likely to be well used by those who are multitasking and need hands-free tools.”

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Photo by Sebastian Scholz (Nuki) on Unsplash

Three Ways to Capitalize on Amazon Search

Three Ways to Capitalize on Amazon Search

Amazon

We already know that Amazon is the Number One website for people to do product searches: according to a 2018 Jumpshot report, from 2015 to 2018, Amazon overtook Google in this area, with Amazon growing to claim 54 percent of product searches while Google declined from 54 percent to 46 percent. Now we know something more. According to Marketplace Pulse, a majority of Amazon searches—78 percent, in fact—are nonbranded. Instead of pinpointing a specific company like lululemon, say, many customers are making broad searches such as “yoga pants for women” and seeing what comes up.

This data demonstrates the opportunity that exists — indeed, just how wide open the playing field on Amazon is for businesses that sell products there. People are searching with intent on Amazon: they want to buy something. But they haven’t yet decided on what to buy. And here’s where the savvy marketer can make inroads.

Amazon Is Growing as an Ad Platform

The data also underscores just how big Amazon has become as an advertising platform. As we recently blogged, Amazon continues to grow, and is biting into other companies’ share of the spoils. eMarketer’s report that Amazon is projected to capture 8.8 percent of U.S. digital ad spending in 2019 is telling. So was the GeekWire article from January 2019, which discussed record 2018 profits for Amazon, and gave props to advertising for contributing to that success. According to GeekWire, “Fueling its bottom line is Amazon’s growing advertising arm that generates revenue by charging companies to promote their products on Amazon properties.”

Three Ways to Capitalize on Amazon Searches

How can a business take advantage of these developments? That is, what sort of strategy should businesses embrace in order to capitalize on the possibilities Amazon affords?

1 Advertise on Amazon

First of all, make sure you advertise on Amazon and that you know how to do so. Familiarize yourself with the complete listing of Amazon Advertising offerings.

And check out our blog. We’ve published numerous posts to help businesses understand Amazon’s many advertising options, including:

  • Sponsored ads, the pay-per-click (PPC) advertising approach that takes a shopper directly to a product page or brand site within Amazon. Sponsored ads are available to sellers, venders, book venders, and Kindle Direct Publishing.
  • Video ads, which complement display ads by expanding beyond a single image to tell a compelling story. Video ads can be used to target a certain audience on Amazon as well as Amazon-owned and third-party sites (e.g., Twitch) and devices.
  • Display ads, which, like video ads, can be employed to reach people in a specific target audience.

Additionally, be aware that Amazon is constantly refining and improving its advertising offerings and creating new ones. Stay abreast of the changes.

2 Make Sure You Have Good Reviews on Amazon

Reviews carry a lot of weight and can help you. According to an oft-cited 2012 Nielsen release, 70 percent of respondents had some or complete confidence in online reviews of products, whether they knew the reviewer or not. Online reviews also tap into basic human psychology. In a description of Dr. Robert Cialdini’s six principles of persuasion, the Influence at Work website describes consensus as the phenomenon where “people will look to the actions and behaviors of others to determine their own . . . especially when they are uncertain.” Note that in the case of consensus, at least online, more is more. Five hundred positive reviews will impress consumers more than three will, no matter how glowing those three reviews happen to be. Ask customers to review you.

3 Be Aware That Advertising on Amazon Is Not a Slam-Dunk

Amazon has flooded its site with its own private label products. Understand Amazon’s generic product strategy — it’s huge —especially if you are a commodity brand such as a seller of batteries, vents, or paper towels. You’ll have to work hard.

There’s a lot of money to be made on Amazon. If you already have products there, know how to capitalize on Amazon’s tools to attract customers. If you don’t, think about making that happen.

Contact True Interactive

True Interactive knows how to build your business via advertising on Amazon in context of broader online advertising strategies. Want to learn more? True Interactive can help. Contact us.

What Is Machine Learning?: Advertiser Q&A

What Is Machine Learning?: Advertiser Q&A

Artificial Intelligence

Machine learning is affecting the way businesses operate – including how they advertise. Google, for instance, uses machine learning to help businesses optimize the performance of their search ads. But not everyone understands exactly what machine learning is. We thought we’d take a moment to break the topic down and answer some common questions.

What is machine learning?

Machine learning is a type of artificial intelligence (AI) in which computers literally have the ability to learn, and subsequently make increasingly more intelligent decisions. The learning happens when a computer program accesses and analyzes data — data in amounts generally too vast for humans to read through quickly or accurately. The computer looks for patterns in the data and learns automatically, without human assistance. Spotify, for instance, uses machine learning to understand the musical tastes of its subscribers in order to recommend songs that are more likely to match their interests.

Is machine learning the same as AI?

Machine learning is one aspect of AI. AI in fact encompasses many things, including:

  • Natural language processing, or NLP, a technology that equips machines to interpret what people say in words or text. Advanced NLP not only deciphers speech, it teases out context and detects nuances like sarcasm.
  • Chatbots, the programs operating inside messaging apps or on websites, which allow consumers to accomplish simple tasks like e-commerce transactions.
  • Neural networks, which are AI programs that use the human brain as a model. Neural networks incorporate aspects of AI like NLP in order to perform duties such as recognizing handwriting.
  • Dynamic pricing, in which programs use consumer data to set prices that are most likely to ensure a sale given various factors.
  • Content Curation, an aspect of AI that can be used to figure out what specific goods to recommend to consumers based on data about that consumer.

In short, AI is a supercategory describing and encompassing the many ways computers emulate the way people think and act. In the vast universe of AI, machine learning is one subcategory.

How are businesses using machine learning in online advertising?

Machine learning can help businesses test the effectiveness of different forms of advertising. Not only can it prioritize ads that are doing better, machine learning can even pinpoint what ads are performing best at certain times.

Google’s efforts to stay competitive in a field shared by powerhouses such as Amazon and Facebook exemplify an effective use of machine learning. As we recently discussed, Google’s responsive search ads and responsive display ads make it possible for advertisers to enter multiple headlines, descriptions, and logos. Machine learning figures in by automatically testing various combinations of these factors and highlighting the ads that perform best.

What are some tips for succeeding with machine learning?

Like any tool, machine learning can be used wisely—or abused. To glean the best results, keep in mind that:

  • Machine learning is not a replacement for humans. Use it as a complement to human judgment.
  • Machine learning is a dynamic field. This is not a topic you can learn once and then consider it mastered. Machine learning tools evolve quickly, with new ones coming along seemingly on a weekly basis. Stay on top of the changes.

Contact True Interactive

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Photo by Franck V. on Unsplash

Why the Amazon/Sizmek Deal Matters

Why the Amazon/Sizmek Deal Matters

Advertising Amazon

On May 31, Amazon said it will acquire assets from Sizmek, an advertising technology firm. The announcement consisted of three paragraphs with little detail. But the deal is valuable for Amazon as the company builds a stronger advertising platform to compete with Facebook and Google.

Amazon Advertising Gains Market Share

Amazon’s advertising business is slowly taking market share from Facebook and Google. According to eMarketer, Amazon will capture 8.8 percent of U.S. digital ad spending in 2019. This amount trails far behind Google (with 37.2 percent market share) and Facebook (22.1 percent). But Amazon is building its advertising operation from scratch, and in a short time it has emerged as a threat primarily to Google, as consumers shift their product searches away from Google and toward Amazon.

How Sizmek’s Assets Will Help Amazon

Amazon purchased Sizmek’s ad server and dynamic creative optimization tools, the latter of which helps personalize ads using data. Sizmek’s tools will bolster Amazon’s already strong warehouse of customer data with even more data from ad serving. Doing so will give Amazon more targeted ways to advertise to the millions of people who search for products on Amazon and willingly share their personal information with the company. The deal isn’t making Amazon bigger, but it will make Amazon smarter.

What Advertisers Should Do

At True Interactive, we help businesses capitalize on Amazon as an advertising platform as part of our broader digital advertising offerings. We’ve been actively blogging about the many features Amazon Advertising is developing, such as video ads on Amazon’s mobile app. Based on our own experience, we suggest advertisers:

  • Examine how partnering with Amazon Advertising will help you attract and acquire customers, even if you don’t sell products on Amazon. As The New York Times reported recently, Amazon is tapping into its rich vein of customer data to help companies create more targeted ads across the digital world – an “insanely powerful” capability, according to the article.
  • Watch as Amazon’s competitors evolve their platforms to compete with the Amazon threat. For instance, Google recently announced new features intended to make it a stronger mobile advertising platform (which we discussed here). And, don’t forget Microsoft. Its own advertising business, while small, gives businesses an alternative to the Big Three of Amazon, Facebook, and Google.

Online advertising is changing rapidly as the major players make acquisitions and develop their products organically. Advertisers will benefit so long as you remain vigilant and capitalize on these improvements. True Interactive can help you. As an outside party, we constantly evaluate new tools and ensure that our clients benefit from them with effective digital advertising campaigns. Contact us. We’d love to make your online advertising more powerful.