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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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 to Advertise to Gen Z

How to Advertise to Gen Z

Advertising

Generation Z is a fast-growing demographic, and savvy businesses are getting to know them and how to connect with them, as good marketers have done with generations that precede Gen Z, such as Millennials and Baby Boomers. Who makes up Gen Z, and why are they important? Read on for a thumbnail sketch of the generation that has grown up in an “always on” technological environment.

Who Is Gen Z?

Pew Research defines Generation Z as anyone born from 1997 onward. Bloomberg research indicates that in 2019, Gen Z will comprise about 32 percent of the population, making it the most populous generation — larger even than the Millennial generation, which, for years, has dominated the imagination and attention of advertisers.

Gen Z is different from any other generation because of one simple fact: they are true digital natives. They don’t know life without smart phones. In addition, they are growing up in an economy where ownership isn’t mandatory or even preferable: Older Gen Zers are comfortable renting someone else’s belongings to get from Point A to Point B (think Uber) or spending time in a new city (Airbnb), a pattern that will probably persist once they come of age and have real spending power. And this is a generation invested in meaningful social connection and expression, where “friend” count, or quantity, is less important than the quality and personal nature of one’s connections.

5 Way to Connect with Gen Z

It’s important that your business understand how to communicate with Gen Z. What are the keys to a meaningful connection with a tech-savvy generation that values just that — connection?

1 Lead with Digital

Use online advertising as the cornerstone for all your advertising. Remember, this is the generation that is growing up digital. As Jonah Stillman, the co-author of “Gen Z @ Work” and a 2018 panelist at Advertising Week in New York City, has noted, “[Generation Z] sees no difference between the physical and digital worlds. This is a generation that is native to technology and has complete comfortability with [their] phones.” This is also a multi-screen generation: if Millennials are known to use three screens at once, you can plan on Gen Z using five. Make sure your ads are present across multiple platforms in order to optimize views and clicks.

2 Be Visual

Gen Z is growing up in the age of YouTube and Instagram. For example, online videos are a key brand discovery platform: Marketing Dive reports that 56 percent of the group has indicated “they want video to reflect the products and services they already own or are specifically interested in.” As we have blogged, creating great visual content is no longer a nice to do – it’s a must-do.

3 Look beyond Facebook

In 2018, eMarketer senior forecasting analyst Oscar Orozco told Business Insider that “[o]utside of those who have already left, teens and tweens remaining on Facebook seem to be less engaged—logging in less frequently and spending less time on the platform.” A 2017 Piper Jaffray survey, in which only nine percent of teens designated Facebook as their preferred social-media platform, confirms this trend. As nineteen-year-old Ishan Goel, a marketing strategist with the Mark Cuban Companies, observes, being on Facebook is “not cool.”

So where is Gen Z spending its digital time? According to Ishan Goel, “Because Gen Zers are individualistic and value their privacy, they prefer anonymous social media like Snapchat, Secret, and Whisper rather than Facebook,” An Hodgson, an income and expenditure manager at Euromonitor International, notes that Instagram is also a go-to.

4 Be Authentic

This isn’t necessarily a generation invested in status. Piper Jaffrey reports that “refined-classic” brands like Ralph Lauren or Vineyard Vines are suffering record lows in the Gen Z market, dropping from a 14 percent average to a 5 percent market share among teens. (That said, according to a recent report from consultancy Irregular Labs, 25 percent of the 1,000 13- to 24-year-old females surveyed indicated that they are saving up to buy a luxury product.)

Gen Zers also value ads with everyday people in them, as opposed to celebrities. Look to retailers like Target for a sense of how to get it right when it comes to authenticity: in Target’s online as well as in-store advertising for women’s fashions, for example, models come in all shapes. And in the store itself, even the mannequins showcasing the clothing are different sizes.

5 Tread Carefully with Cause Marketing

Gen Zers value social issues. In a new study from the consulting firm DoSomething Strategic, two-thirds of Gen Z consumers indicate that there is a correlation between a brand’s association with a social cause and positive impressions of that brand. That said, authenticity (see above) must be established: any whiff of a disconnect between the cause marketing and a company’s values, and Gen Z will not be impressed. Furthermore, a study published in the Journal of Advertising Research suggests that businesses should avoid relying on guilt in any cause-related marketing they pursue.

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Looking for more insight into how to reach Gen Z with your digital advertising? Contact us.

Photo by JodyHongFilms on Unsplash

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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At True Interactive, we know how to help businesses navigate the complex waters of online advertising, including advertising on Google. Contact us. We’re here to help.

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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Contact True Interactive. We can help you better understand voice search as you craft your strategy.

Photo by Sebastian Scholz (Nuki) on Unsplash

Why Yahoo! Scores An Advertising Touchdown with NFL Live

Why Yahoo! Scores An Advertising Touchdown with NFL Live

Advertising

As more cord-cutters embrace connected TV, advertisers don’t reach as many people as they used to. We blogged recently about the fact that even blockbuster TV shows like Game of Thrones attract a fraction of the audiences that used to gather in linear television’s heyday. The change has created an environment in which content creators and advertisers are invited to find new ways to make money from digital audiences. The shift isn’t limited to shows or series, of course. It also includes live sports, with platforms and publishers such as Facebook, Twitter, Yahoo!, and YouTube landing rights to broadcast games from the likes of Major League Baseball, the NFL, and the NHL. Yahoo!, for example, has adapted to the connected TV era by providing the NFL Live experience, which, in turn, creates an opportunity for advertisers: a less expensive, more targeted way for brands to reach NFL fans.

What Is NFL Live?

NFL Live is currently the only free mobile site for watching live NFL games. Yahoo! makes free NFL viewing a reality by empowering businesses to advertise on NFL Live. Some of the advantages to advertisers are straightforward: brands get their name in front of six million+ people who have downloaded the app, for example. But it’s not just the volume that matters—it’s the ability to target viewers. Instead of buying advertising spots for certain times during a game (the third quarter of a Bears/Packers game, say), advertisers on NFL Live can reach out to particular audiences. By targeting a group as specific as women ages 25-34 making $100,000+ annually, an advertiser may not reach the largest audience — but they can reach a market they determine is uniquely suited to their brand. It’s a trade-off that can be lucrative, bringing to mind the maxim “quality versus quantity.”

Another perk: it’s less expensive to advertise on NFL Live. A typical network ad during an NFL game costs about $300,000. By contrast, there is no minimum spend for advertising on NFL Live. Advertisers can spend as much or as little as they want.

How Is Yahoo! Expanding NFL Live to Yahoo!’s Fantasy Football App?

Yahoo! has done something else. The company is ramping up its NFL Live offering by also streaming NFL games on Yahoo!’s popular Fantasy Football app. As Yahoo! Fantasy analyst Liza Loza recently said, “NFL fans all over the country can root for their favourite teams and watch all local and primetime games free and unauthenticated in the Yahoo! Fantasy Football app, the Yahoo! Sports app and other Verizon and NFL media properties on phones and tablets.” Multiple streaming locations mean a larger audience. They also hold the promise of attracting new fans. Yahoo! Sports general manager Geoff Reiss said that the digital platforms have brought in a “concentration of younger fans watching the NFL . . . Half of our fans were under the age of 40. I think one of the reasons the league was interested in working with us is we would be a means for them to reach younger audiences.”

Contact True Interactive

Yahoo! is a prime example of a business that’s adapting with the times. It’s important that advertisers remain nimble and aware of what companies like Yahoo! are doing, and capitalize on the opportunities that the changing market affords. Accept the fact that you won’t be reaching as big of an audience. Embrace the reality that you can in fact reach a much more targeted audience: one that’s smaller but more measurable. Call True Interactive for more insight into how to do that.