Google (GOOG) held a conference call today to remind Wall Street about its search business. Sounds like it was mostly a snooze except for the bit about some new ad formats. We could see those driving per-click revenue up fast.
JP Morgan’s Imran Khan summarized the call:
- Overview of the search market. 20% of queries have never been seen before. Additionally, 10 terabytes of new data are created each day. Speed is very important in search behaviour. In a map search, Google found that increasing the speed of a search almost doubled usage of maps (increased from 4 pans to 7).
- Search product developments. In an effort to increase speed, Google introduced snippets that allow users to see some information on the search results page itself, query input suggestions, and locate specific results. Search tools have also increased access to information. The cross-language information retrieval and the translate tool have increased access to global data.
- Google plans to introduce new ad formats. Google hasn’t made many changes to its text ad format and now sees this as a big opportunity. For example, advertisements for movies may be best in the form of trailers, and product advertisements may be best in the form of pictures and descriptions. The team is currently working on ad formats better suited to mobile, video, picture, maps and local searches.
- The company rolled out an improved advertiser interface for the first time in 6 years. This interface has been rolled out in all locations. Some notable features include the search-based keyword tool, which helps find keywords, better pricing tools such as a bid simulator, which projects the impact of lower or higher bids on clicks, ad extensions, which can, for example, link a successful map campaign to multiple addresses, and alerts, which will send advertisers an email when a pre-specified change in cost, position or other attribute occurs for specified keywords.
- Google analytics and website optimizer can increase ad spend. Google analytics measure how long visitors stay at a website, what they look at, and conversion. Search benchmarking compares an advertiser’s search performance with overall search performance in the vertical. The map overlay tool shows what geographies’ traffic is from and the impact on revenue. Traffic source tools help see which internet sites are a source of traffic. Conversion tracking and funnel visualisation can help indicate the best methods to attract visitors and behaviour in website navigation. Finally, the website optimizer tool can test changes to a website.
And here’s more detail on the ad formats from Citi’s Mark Mahaney:
In an effort to bring more relevant ads to users, Google recently launched four new ad formats and expects to expand these over time:
A) Video Ads – Users can play a video ad within the sponsored links section. This would be ideal for movie trailers, video games or companies selling complex products;
B) Site Ads – An ad would contain sublinks to more specific products that take users directly to those products on the site;
C) Product Ads – Ads that show pictures, prices and description of products;
D) Local – Google shows address, directions and in some cases logos of local establishments; and
E) Mobile – Google added click-to-call which is a new mobile monetization ad format. We believe these ad innovations should have a positive long-term impact on CTRs and CPCs.
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