Despite Device Targeting Flap, Mobile Has Plenty To Celebrate In Google's AdWords Changes

Google CPC Growth

Google’s changes to AdWords mean that advertisers will be less able to run device-specific campaigns. 

But there are positive sides to the changes too. Let’s look at both. 

Here are the key changes Google has made to its hugely successful pay-per-click ad product: 

  • An end to most tablet-only campaigns: As revealed on an AdWords support forum and Google’s guide for the new AdWords, Google will lump tablet and desktop clicks together. After the change, advertisers will not be able to target ads to tablet users. With some exceptions for tablet-exclusive ad campaigns like those for tablet apps, tablet clicks will be treated as equivalent to desktop clicks and vice-versa. 
  • An end to smartphone-only campaigns: Instead, advertisers will be able to adjust their bids on smartphone clicks based on their desktop/tablet bid. Bids on smartphone clicks can be -100 per cent to +300 per cent of what advertisers are bidding on desktop/tablet clicks. A bid of -100 per cent, of course, means a 0$ bid. So, for example, if an advertiser’s bidding $1 on a desktop/tablet click for the search keywords, “Waterproof Winter Boots,” they can adjust their settings to make their smartphone bid anything from 0$ (to opt out of smartphones) to $3. A higher bid on smartphones will tend to get a higher proportion of smartphone clicks, but won’t necessarily eliminate desktop/tablet clicks. 

(Similar options allow advertisers to weight bids according to location and time.) 

Some advertisers wondered angrily why device targeting was being limited, but the biggest single concern seemed to be with the blending of tablet and PC clicks.

Photo: BII

Google maintains that for most advertisers, the performance of tablet ads is converging with those of desktop ads. So most advertisers should not lose out because they’ve lumped tablets and desktops together. And there is data that backs Google up. Marketing agency Performics has said that tablet CPCs (Cost-per-click) have been converging with desktop CPCs, which presumably means conversions are nearing parity too. (See chart, right.)Most observers have interpreted the AdWords changes as an attempt by Google to boost their CPC metric, by consolidating bid streams. As we’ve noted, Google’s CPC has sagged for five straight quarters in year-over-year terms, as cheaper mobile-based clicks drag on prices. 

But whatever Google’s true motivations for rolling out what they’re calling “enhanced campaigns,” there are other implications beyond more expensive clicks and loss of control, and some will be healthy for the mobile ecosystem. 

  • To begin with, it’s a clear signal of mobile’s importance and consumers’ multiscreen reality. Google’s AdWords is arguably the single most important digital ad product around. Advertisers must now integrate tablets into every campaign, and will have to consider smartphones (even if they choose to set their bid for smartphones at 0$ to opt out of smartphones). Google’s nudging all digital advertisers toward some semblance of a mobile strategy. 
  • In other words, advertisers will need to have mobile-optimised sites. With the changes, many advertisers on Google AdWords— and that’s hundreds of thousands of small businesses and large enterprises— will find it necessary to create a mobile-friendly site. Otherwise, any tablet and smartphone clicks will take a potential customer to a clunky website that’s difficult to navigate. Before the change, businesses could say, “I won’t build a mobile site, I’ll just design my AdWords campaign to target only desktop PCs.” It’s not that simple any more. 
  • It does simplify the AdWords process for advertisers interested in mobile. As Larry Kim of WordStream writes, designing mobile-only campaigns on Google was “torture,” since advertisers needed to create separate campaigns for every device and location combination. For smaller businesses without third-party help, this was even more of a headache. Now, there’s no need to create dozens of campaigns. A single campaign will allow for multiscreen targeting of mobile and desktop users along with geo-targeting. Plus, Google will know whether the user is on a smartphone or desktop and serve ads customised to device type. Reporting improvements will make it easier to track mobile ad performance. 
  • Finally, it eliminates needless confusion. The new AdWords may be a blunt instrument in some respects. But in the long-term it will help eliminate counterproductive hard-and-fast distinctions between mobile and desktop that are getting blurred in the real world. Phablets like Samsung’s Galaxy Note II erase the line between smartphone and tablet, while tablets are in fact increasingly used to replace desktop PCs, as Google itself notes: ” … as devices converge, consumer behaviours on tablets and desktops are becoming very similar.”

Google says the changes will be rolled out across all AdWords campaigns by mid-2013. 

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