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

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

Google

Recently Google announced that over the next few years, it will stop supporting third-party cookies on Chrome. With Chrome currently accounting for more than half of all installed web browsers, this is big news. It follows actions by Apple and Mozilla to block tracking cookies in Safari and Firefox respectively, too. In light of this news, we’ve answered some questions you may have. A big caveat: this is an evolving story, and one being played out over the next two years. A lot can happen yet. That said, here’s what we know:

What Exactly Is Google Doing to Third-Party Cookies?

Google announced that over the next two years, it will not support third-party cookies on its Chrome browser. Let’s break down what this means:

  • A third-party cookie consists of text stored in a person’s computer that is created by a website with a domain name other than the site a visitor is visiting.
  • Third-party cookies make it possible for an advertiser to track a person’s browsing history and, in theory, serve up more personalized ads that follow a person around the web.
  • Typically web browsers allow third-party cookies.

But over the next few years, Chrome will replace third-party cookies with browser-based tools and techniques aimed at balancing personalization and privacy. So, third-party cookies are going away from Chrome – but that doesn’t mean advertising is. Far from it.

Google said it will replace third-party cookies with a (vaguely defined) browser-based mechanism as part of a new “Privacy Sandbox.”  The Privacy Sandbox is an evolving and (equally vague sounding) “secure environment for personalization that also protects user privacy.” Google describes the Privacy Sandbox an “open source initiative is to make the web more private and secure for users, while also supporting publishers.” In an August 2019 blog post, Google said the Privacy Sandbox would be a place to collaborate on better ways to provide relevant ads while protecting personal privacy:

Some ideas include new approaches to ensure that ads continue to be relevant for users, but user data shared with websites and advertisers would be minimized by anonymously aggregating user information, and keeping much more user information on-device only. Our goal is to create a set of standards that is more consistent with users’ expectations of privacy.

The unplugging of support for third-party cookies looks like a way for Google to get the industry to start playing in its Privacy Sandbox, resulting in a mechanism that will replace the cookie, protecting user privacy while also supporting advertisers. No one knows what that mechanism is going to look like yet.

Why Is Google Going to Stop Supporting Third-Party cookies in Chrome?

Google says it’s trying to balance personalization and privacy. Google’s stated objective is to create “a secure environment for personalization that also protects user privacy.” In announcing the change, Google said, “Users are demanding greater privacy–including transparency, choice and control over how their data is used — and it’s clear the web ecosystem needs to evolve to meet these increasing demands.” At the same time, Google wants to make it possible for businesses to continue to offer personalized content. Google intends for the still-evolving browser-based mechanism envisioned by Google to do that.

How Will Ads Be Affected?

If you use a Google ad products, you will not be affected. Google will still be able to use data from its own search and other properties to target ads to people. But once Google phases out third-party support, you won’t be able to use third-party cookies to follow users around on Chrome and retarget with an ad them after they’ve visited your website.

How Has the Industry Reacted?

The move has received a mixed response.

Some critics point out that phasing out third-party cookies on Chrome is a cynical play to strengthen Google’s ad business because Google’s ability to use data from its own search and other properties to target ads to people remains unaffected.

Others have speculated that the change will make obsolete many tools that advertiser have been relying on. As Adweek noted,

Marketers wary of the industry’s reliance on Google will have to figure out how they can adapt their first-party data strategy as some of the de rigueur marketing tools of recent years are rendered redundant in most internet browsers. These include third-party data and data management platforms, and multitouch attribution providers, all of whose days would appear to be numbered (at least in their current guise), as third-party data has been a critically important part of how marketers shape their communications strategies with consumers for close to 25 years. For instance, Procter & Gamble, one of the industry’s largest-spending advertisers, this week effused over its frequency capping efforts at the National Retail Federation’s annual conference.

The Association of National Advertisers and American Association of Advertising Agencies issued a joint statement that said, “We are deeply disappointed that Google would unilaterally declare such a major change without prior careful consultation across the digital and advertising industries. In the interim, we strongly urge Google to publicly and quickly commit to not imposing this moratorium on third-party cookies until effective and meaningful alternatives are available.”

In fact, it’s possible that backlash will cause Google to reverse its course. A lot can happen in two years.

What Should Advertisers Do?

We reached out to Google to find out what near-term steps businesses need to take. Here’s what Google says:

First, you don’t need to do anything with your Google ad products. Google will be updating the cookies that Google sets and accesses for our advertising products prior to the deadline

Google recommends that you:

  • Confirm with your own engineers that they have conducted testing on your sites to assess impact and are updating any third-party cookies they control. It is important to also check non-ads use cases (e.g., logins, shopping cards).
  • Confirm with your vendors (ads and non-ads) that any cookies they set and access on your sites will be updated.

This is an evolving situation. We recommend keeping a close watch. At True Interactive, we’re following the situation closely and will be ready to help our clients sense and respond.

Contact True Interactive

To succeed with online advertising in 2020, contact True Interactive. Read about some of our client work here.

 

What Is DuckDuckGo? Advertiser Q&A

What Is DuckDuckGo? Advertiser Q&A

Advertising Marketing

Part of the price of being popular is being a target. And as we enter 2020, Google is certainly a big target for privacy advocates, who are uncomfortable with the amount of personal data that the master of the search world collects. And when privacy advocates talk about Google, they mean more than Google.com – there’s also Google Maps, YouTube, and a host of other Google-owned properties to consider. Amid the ongoing discussion about Google’s size and reach, search engine DuckDuckGo has emerged as an alternative for privacy advocates. DuckDuckGo is cast as an underdog and defender of personal privacy, partly because of how the company positions itself (“privacy, simplified”) and partly because of DuckDuckGo’s operating model (DuckDuckGo does not store personal information, follow users around with ads, or track users).

What, exactly, is DuckDuckGo, and how big is it? Let’s tackle these and other questions we’ve been getting from clients.

What Is DuckDuckGo?

Founded in 2008, DuckDuckGo is a search engine whose claim to fame is protecting user privacy. DuckDuckGo does not store IP addresses or log user information; and DuckDuckGo uses cookies only when required. The search engine also markets itself with a bit of cheek (according to its website, “At DuckDuckGo, we don’t think the Internet should feel so creepy and getting the privacy you deserve online should be as simple as closing the blinds”) and defiance (“Too many people believe that you simply can’t expect privacy on the Internet. We disagree and have made it our mission to set a new standard of trust online”).

Think of DuckDuckGo as an alternative search engine for those who want to maintain a brick wall of privacy between themselves and the digital world when they search.

How Big Is DuckDuckGo?

DuckDuckGo accommodates 1.5 billion searches a month with nearly 15 billion searches conducted in 2019. By contrast, in 2019, Google accommodated 2 trillion searches a day. Although DuckDuckGo is tiny by comparison, the search engine is growing. Those 15 billion searches represent a 60 percent increase over 2018 (9.2 billion) and nearly a tripling of 2017 searches (5.9 billion). Clearly, DuckDuckGo is catching on – with a small segment of the population, yes, but a growing on.

How Does DuckDuckGo Make Money?

DuckDuckGo makes money through advertising and affiliate marketing. Just because DuckDuckGo protects your privacy, it doesn’t mean DuckDuckGo offers ad-free search results. If a user searches for, say, “vinyl records near me,” DuckDuckGo returns advertisements based on the keyword search. But DuckDuckGo does not track or use a person’s data after the search is completed. In addition, DuckDuckGo earns affiliate marketing revenue from sites such as from Amazon and eBay. When users buy something on those sites after reaching them through DuckDuckGo, DuckDuckGo collects a commission. For more insight about advertising on DuckDuckGo, check out this link from the company.

Is DuckDuckGo Reliable?

Your mileage may vary. The search engine has been called out for lacking certain functionality available on Google and Bing, such as custom date ranges. And to be sure, Google provides an interconnected universe of properties (Google.com and Google Maps being a good example). But DuckDuckGo is building out its functionality. For instance, you can do location-based searches through an integration between DuckDuckGo and Apple Maps. The best way to test it is to try it.

Should I Advertise on DuckDuckGo?

Businesses with a limited budget should focus on the properties where they’ll get the most bang for the buck, and without question there are bigger alternative such as Google and Bing that provide much more ad visibility. One of DuckDuckGo’s challenges is that the site itself requires a bit of word of mouth for people to find. But that said, businesses might want to consider DuckDuckGo for discretionary ad spend targeting a smaller privacy-conscious segment of the population.  According to research from SimilarWeb, loyal users of DuckDuckGo love tech, and they use DuckDuckGo as an alternative because they’re concerned about having their privacy protected while they search online. If that’s the type of audience for you, consider DuckDuckGo.

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8 Digital Advertising Predictions for 2020

8 Digital Advertising Predictions for 2020

Advertising

Google takes control of advertising. More businesses feel the heat over consumer privacy. Voice search gets smarter. These are among the trends influencing digital advertising in 2020, according to True Interactive. Here’s a sample of what’s on our minds:

1 Google Takes Control of Advertising

Google is taking away manual control of Google Advertising with the removal of the average position metric and by continuing to implement automated bidding tools and metrics such as top impression share that make measuring search ranking less transparent. As a result, CPCs are going up.

Going forward, Google will continue to push automated bidding strategies. Google’s rationale is that its algorithms are smarter, making it possible for Google to adjust bids per auction. But smarter bids are not necessarily less costly ones in the short term, and there is still much trepidation by marketers in handing total control over to Google, who stand stands to profit from an increase in CPCs and overall spend. Bottom line: as Google continues to make manual bidding more challenging, advertisers will be forced to buy into automated bidding with less transparency.  Expect CPCs to increase at least in the short term as businesses hand more control over to Google.

— Beth Bauch, senior manager

2 The CCPA Throws Down the Hammer on Big Tech

By July 2020, we will see the first major lawsuit against one of the big technology firms – likely Facebook or Google – over a violation of the California Consumer Privacy Act (CCPA). The CCPA, which goes into effect January 1, is evolving. Businesses are still figuring out its vagaries and requirements. Google and Facebook are in interesting and vulnerable position because they touch so much audience data for businesses, increasing their risk level. And we know Facebook’s track record for privacy violations, don’t we? Watch for it: a major lawsuit will happen that forces businesses to come to terms with the CCPA.

— Tim Colucci, vice president

3 Netflix Adopts Advertising

Netflix will need to adopt some form of advertising. Netflix has achieved phenomenal growth, to be sure. But the entertainment company also faces unprecedented threats with Disney+ and, eventually, Apple+ once Apple figures out a long-term strategy that works. (Apple has a lot of cash and time to get Apple+ right. Just wait.)

In addition, the cost of creating content is putting Netflix in an interesting bind: when Netflix has a hit show, it has to spend more money to accommodate audience demand, creating even more costs. On top of all that, for the first time in a long time, Netflix has reported drops in membership levels.

Netflix will likely introduce a less-expensive ad-based model, but the company will also do something it has avoided pursuing: product placements in shows like Stranger Things, which popularized brands such as Kellogg’s Eggos without earning Netflix a dime in return. Those days will come to an end as Netflix responds to pressure from investors to cover its costs and respond to the threat of Disney.

— Héctor Ariza, manager

4 Voice Search Gets Smarter and More Useful

I’ve written often about the rise of voice search, and I continue to see more people using their voices to find things with their smart speakers, phones, and in-car devices. But what’s changing is that people are getting more comfortable buying things, not just searching for things, with their voices. That’s happening because as we get accustomed to the ease of using our voices to manage our lives, we are gradually becoming more comfortable accomplishing more complex tasks. In addition, thanks to improvements in artificial intelligence, voice-enabled devices are getting smarter and more capable of managing purchases and product orders. Frankly, the market got flooded with smart speakers such as Amazon Echo and Google Home before AI was adequately advanced to make a voice-activated speaker as smart as we’d like them to be. Those days are rapidly drawing to a close.

— Taylor Murphy, manager

5 Google Monetizes Maps and Google My Business

We recently blogged about the fact that half of searches on Google stay on Google properties such as Google Maps, YouTube, and a business’s Google My Business (GMB) listing. In other words, half of searches are not resulting in clicks on a business’s website. In addition, Google My Business is the most important local search signal according to the Moz Local Search Ranking Factors. These data points mean that businesses need to invest more time and energy maximizing the value of their presence on Google. Google knows this reality and is getting more aggressive about offering advertising products for businesses on these sites. Earlier in 2019, Bloomberg discussed how Google is evolving Google Maps with more advertising tools. Especially as more cars integrate mapping technology, Google is going to place even more advertising emphasis here. I also expect Google to provide more advertising options for businesses to promote themselves on their GMB listings. I also would not be surprised If Google introduces a premium version of GMB in which businesses will enjoy more features for a cost.

— Mark Smith, co-founder

6 Cause Marketing Faces a Reckoning

Cause marketing has been around for years. Businesses have learned they can create stronger emotional ties with customers and job seekers by associating themselves with a topical issue such as sustainability. In 2019, businesses were falling all over themselves to promote a position on sustainability as the topic reached all-time levels of public awareness. But there’s just one hitch: we’re seeing a glut of cause marketing campaigns, and they’re not necessarily connecting with consumers. I was reading a recent report from DoSomething Strategic that discusses how businesses have struggled to make their cause marketing connect with young people. Gen Z definitely wants to associate with purpose-driven companies. But businesses still have a lot of work to do in order to convince them that they’re aligned with Gen Z values. Businesses are going to become more careful about how they do cause marketing. I believe we’ll see fewer online ads and a more thoughtful use of content marketing, PR, social media, and native advertising in which a business can spend more time having a longer-term discussion about issues it cares about. Businesses will humanize these conversations by sharing their position through the voices of their people.

— Kurt Anagnostopoulos, co-founder

7 Agile Advertising Takes Hold

We all know about real-time marketing, in which a brand uses social media to turn a news event into a marketing opportunity. Agile advertising occurs when a business acts on a recent event and creates a connected marketing experience that endures well beyond a single tweet, Facebook post, or other digital impression. We saw Bud Light exercise agile advertising during the World Series when it capitalized on the fact that a fan in the stands stopped a home run ball with his chest while holding two Bud Lights in his hands. Bud Light created a series of marketing moments including creating a branded T shirt depicting the fan stopping the home run ball. Bud Light paid the fan to attend another World Series game sporting the Bud Light attire. We also saw agile advertising in action when Aviation Gin created a slick ad online that gently made light of the controversial Pelton cycling ad. I see more businesses adopting this practice because the digital production tools have evolved to the point where talented storytellers can quickly conceive of an idea and get it into market with an ad that taps into current events and endures for days and weeks.

— Max Petungaro, associate

8 Hispanic Marketing Hits Its Stride

In the United States, 69 counties are majority Hispanic, doubling from 34 in 2010. Hispanics have increased their economic power, reflecting a growingly diverse U.S. population. In 2020, Hispanics will possess $1.7 trillion in buying power. The United States continues to reflect Hispanic tastes in all aspects of our culture (including and beyond the Hispanic community, ranging from movies to popular music). We’re going to see businesses apply research and targeting to do more effective, sophisticated Hispanic marketing that recognizes the diversity and tastes that reside among Hispanics. Brands are already capitalizing on this growing market. (For more insight about marketing to Hispanics, check out our blog post.) And tech companies such as Google are responding to a more multicultural world in general by making their platforms more open to people who speak languages other than English, an example being how the Google Assistant voice software can interpret 44 languages on smart phones. These types of developments will help bridge the world between businesses and Hispanics in 2020.

— Amanda Cortese, associate

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Photo by Diego Jimenez on Unsplash

Google Fights Amazon through Location-Based Advertising

Google Fights Amazon through Location-Based Advertising

Google

Amazon is gunning for Google. A recently published report by Forrester says that Amazon Advertising will have a break-out year in 2020, leveraging its popularity as a search platform to make its booming online advertising business an even bigger threat to Google than it is. Currently, Amazon is the third-largest online advertising platform – still far behind Google and Facebook in terms of market share, but rapidly growing.

But Google has many cards to play, and strengthening its advertising services at the local level is a big one.

Location-Based Digital Advertising Is Big Business

Location-based digital advertising is big business, as brick-and-mortar establishments capitalize on increasingly prolific tools such as search and display to attract customers. As well they should: in 2018, Google reported that the number of “near me” searches on Google has risen by 500 percent over a period of two years, meaning an explosion of searches for people seeking things to do, places to go, and purchases to make near their location. Google has seen an opportunity to monetize that kind of search behavior and acted on it.

How Google Is Developing Location-Based Advertising Tools

Here are some examples of Google products for businesses to use in order to attract those near me searches to their locations:

  • Promoted Pins. Google is barely scratching the surface for using Google Maps as an advertising platform. I mentioned local search ads on Google Maps above. But that’s not the only way to advertise there. Businesses can also use tools such as Promoted Pins, which are visually appealing markers that make a business’s location stand out. Earlier in 2019, Bloomberg discussed how Google is evolving Google Maps with more advertising tools. Especially as more cars integrate mapping technology, Google is going to place even more advertising emphasis here.
  • Location extensions.These make it possible for a business to show an address, phone number, and a map marker along with its ad text. There are two types of these extensions: Google Ads location extensions help people find a location by showing ads with address, a map to a location, or the distance to a business. And Affiliate location extensions help people find nearby stores of a retail chain that sell your products. Per Google, the Affiliate location extensions tool is useful if you sell your products through retail chains and want to reach consumers when they are deciding what and where to buy.
  • Google My Business. Google My Business (GMB) is the central repository for a company’s locations. Technically being on GMB is an organic play, and your GMB listing is crucial. It’s really like a second website. When businesses claim a GMB listing for a location, they can enrich it with location information, deep content describing their business, visual information, customer Q&As, and reviews. GMB is actually the most important local ranking signal on Google. But note the tie-in to advertising. Google allows a business to link its GMB to its online advertising via the location extensions I mentioned above. Doing so makes a business’s GMB an even more powerful tool to attract customers.
  • Local Services by Google. Google launched this offering to help businesses such as plumbers and contractors that provide services at a customer’s location. Businesses that participate in the program have their ads appear above search results (even paid search results). The compensation model is pay per lead, meaning that the advertiser pay only for leads resulting from the ad as opposed to clicks. Local Services ads complement paid search.

These and other location-based advertising tools will give Google a strong base to fight Amazon in 2020. Google has an already vibrant advertising business. Google didn’t become the leading online platform by sitting still. About half of all Google searches stay on Google properties, meaning people searching for things find what they need from search results without clicking through to a website. In 2020, look for Google to further monetize this ecosystem through local advertising.

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To learn more about how you can succeed with online advertising, including on Google, contact True Interactive.

Will Increased Scrutiny Make Google More Transparent?

Will Increased Scrutiny Make Google More Transparent?

Advertising Google

It’s been a tough week for Google from a PR standpoint.

On November 11, The Wall Street Journal published a story about how Google has been collecting Americans’ personal health data as part of an ambitious foray into healthcare. Although Google was not accused of any wrongdoing, the examination of its data collection practices resulted in the announcement of a federal probe. And then to cap off the week, on November 15, The Wall Street Journal published a lengthy article, “How Google Interferes With Its Search Algorithms and Changes Your Results.”

Let’s just say the title of that second article captured plenty of interest in the advertising world.

Do Google’s Actions Match Its Message?

The November 15 article, like the article about Project Nightingale, did not accuse Google of doing anything illegal. But The Wall Street Journal painted a picture of a company whose actions are not always aligned with its statements. For instance, The Wall Street Journal pointed out examples of Google intervening to manage search results contrary to what Google says on its blog, “We do not use human curation to collect or arrange the results on a page.” According to The Wall Street Journal, Google:

  • Weeds out more-incendiary suggestions in the search auto-complete function.
  • Has made algorithmic changes to search results that favor big companies over smaller ones and “in at least one case made changes on behalf of a major advertiser,eBay, contrary to its public position that it never takes that type of action. The company also boosts some major websites, such as Amazon.com Inc. and Facebook Inc.  . . . .” (The comment about Facebook and Amazon is especially interesting given how Amazon and Facebook compete with Google for advertising revenue.)
  • Employs thousands of contractors whose job is to assess the quality of the algorithms’ rankings. “Even so,” says The Wall Street Journal, “contractors said Google gave feedback to these workers to convey what it considered to be the correct ranking of results, and they revised their assessments accordingly, according to contractors interviewed by the Journal. The contractors’ collective evaluations are then used to adjust algorithms.”

For me one of the most fascinating details in the article is the inference that Google’s advertising growth has influenced how the company treats businesses on Google. According to the article:

Some very big advertisers received direct advice on how to improve their organic search results, a perk not available to businesses with no contacts at Google, according to people familiar with the matter. In some cases, that help included sending in search engineers to explain a problem, they said.

One former executive at a Fortune 500 company that received such advice said Google frequently adjusts how it crawls the web and ranks pages to deal with specific big websites.

Google updates its index of some sites such as Facebook and Amazon more frequently, a move that helps them appear more often in search results, according to a person familiar with the matter.

For its part, Google said it does not provide specialized guidance to website owners. Google said that faster indexing of a site isn’t a guarantee that it will rank higher. “We prioritize issues based on impact, not any commercial relationships,” a Google spokeswoman said.

I would urge any business to take the time to read the article. Here again, this is not an exposé of wrongdoing but rather an in-depth examination of how well Google’s practices align with its words.

The Core Issue: Transparency

Google is certainly not alone in facing increased scrutiny for its management of data and its relationship with advertisers, and the heat Google is experiencing right now is nothing compared to the firestorm that Facebook is enduring.

To me, the core issue of the November 15 article is this: transparency. Google’s practice of holding its cards close to the vest has created an impression of a business that has something to hide – perhaps not a fair impression, but as they say, perception is reality. As Google manages the fallout from the November 15 story, I do think we may see some interesting outcomes for advertisers:

  • Smaller businesses — which the article characterizes as second-class citizens groveling for fair consideration — may receive more responsiveness than they typically get from the advertising giant when issues arise that demand attention.
  • All businesses may see more transparency from Google, such as how the algorithm works and the explicit impact of the many algorithm changes that Google enacts through the year. A message of “Trust us – we know what we’re doing” just isn’t going over very well. At the same time, Google needs to protect its intellectual property, and the company says that revealing too much of how the algorithm works will make it easier for parties with bad intentions to game the system. It will be fascinating to see how Google reconciles these factors amid increased scrutiny.

In many ways, Google is grappling with issues that social media platforms do all the time – providing an open forum for the exchange of ideas among people while at the same time making it possible for businesses to succeed through advertising and commerce. What exactly goes on behind the scenes to represent the interests of both people and businesses is not always clear. But that situation may change soon.

Contact True Interactive

At True Interactive, we live in the world of online advertising. We know how to help businesses succeed with Google, Facebook, Amazon, and many other advertising platforms. Contact us to learn how we can help you.

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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Contact us to learn more about how online advertising might figure into your strategy. We’re here to help.

Why Digital Ad Spend Is on the Rise

Why Digital Ad Spend Is on the Rise

Advertising

Digital advertising is not only growing, it’s becoming more mainstream. As noted in two recently published research reports, internet advertising spending is hitting record highs and is projected to soon exceed 50 percent of all advertising spend for the first time. Let’s unpack what this information means for your business.

Trends in Growth Reflect Value

According to a report issued by the Interactive Advertising Bureau (IAB) on August 6, “U.S. digital advertising revenues reached a landmark high of $28.4 billion in the first quarter of 2019. This is the industry’s strongest Q1 on record.” The 18 percent rise over Q1 2018 digital revenues are part of a trend, as David Silverman, Partner, PwC US, sees it: “These historic Q1 figures are in keeping with digital’s ongoing rise,” he notes. The leaps in growth are also telling, reflecting the value digital ad spend can yield. Sue Hogan, IAB’s Senior Vice President, Research and Measurement, says that “[t]he continued growth of digital ad spend is a reflection of its ability to help brands and publishers reach consumers and build meaningful one-to-one relationships.”

The Balance Is Tipping

Digital advertising isn’t just strong and growing, it’s also overtaking offline advertising. In a report released July 8 by Zenith, internet advertising is predicted to account for 52 percent of global advertising expenditure in 2021. This development would mark the first time digital advertising exceeded the 50 percent mark of all ad expenditures, overtaking analog advertising formats such as linear television, billboards, and print. According to Zenith, print in particular is on the decline, and traditional television ad revenues can be expected to dwindle every year from now to 2021.

Brands should note that internet advertising isn’t a monolithic spend. Ongoing technological improvements to smartphone technology and connection speeds, paired with strong content investment, have informed the growth of ad spend in online video and social media, in particular.

What Does It All Mean?

The reports suggest a few takeaways, including:

  • Digital ad spending is finally becoming mainstream. It’s no longer part of a company’s advertising, it’s central to a company’s strategy.
  • Businesses are getting more sophisticated about how they advertise. They are increasing and decreasing their digital spend in different types of digital advertising to suit the specific needs of a campaign, and to adapt to changes in consumer behavior. The fact that advertisers are upping their spend in video and social media reflects an understanding of the surge in consumer social media usage and, as we’ve noted on our blog, the demonstrated appetite for visual content.

What You Should Do

Taken together, these reports underline how important it is that advertisers constantly assess and respond to consumer behavior. By staying current, savvy advertisers can be leaders, not followers—and reap the benefits of being an informed early adopter. For example, businesses that reacted early to the rise of visual storytelling already have a leg up on those that waited too long. You want to be one of those businesses that monitor how consumers are acting and adjust advertising strategies accordingly — before your competitors do.

A really good example of a trend to watch? Voice search. Per Zenith, “A lot of innovation in search is taking place in voice, which is currently not monetised.” Voice-based advertising may not be paying off yet across the board—but it’s only a matter of time before it does. Smart brands will keep an eye on voice search and take action before it’s mainstream.

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How are you sensing and responding? Contact us. We can help you maximize ROI of your online advertising.