Googles Mobile Mandate

How Marketers Can Prepare for AdWords Enhanced Campaigns February 2013
By Jason Hartley, Group Media Director, Search Marketing Practice Lead, and Hank Beaver, Group Media Director, Search Media Operations at 360i

Executive Summary
Google has announced an update to its advertising model that will formally usher all of its advertisers into the mobile era. The new Enhanced Campaigns will bring mobile to the masses in a manner that will help resource-strapped small businesses, but will pose challenges for larger, more sophisticated search marketers in their perpetual quest for granularity, transparency and associated ROI. As a trend, most Google advances (Universal Search, Google+ and others) have rewarded sophisticated search advertisers by delivering solutions that hold new opportunities for those leveraging superior technology, targeting and talent. Google has established a reputation for creating innovations that benefit the upper echelon of advertisers, and for lifting search from the top down rather than focusing on the challenges faced by smaller advertisers. Enhanced Campaigns, however, take away some of the bidding, device and structural granularity that has established AdWords as the dominant search advertising platform among large-scale advertisers. The good news is that sophisticated marketers have been optimizing their campaigns for mobile devices for quite some time. Advertisers that have positioned themselves ahead of the pack those having already established and tested mobile strategies for bidding and optimization will need to identify new approaches for meeting their goals within a new environment.

Key Takeaways
1. With Enhanced Campaigns, Google is forcing mobile adoption on all advertisers. The recent update is a clear play to bring less-sophisticated advertisers to the next level. For smaller advertisers, Enhanced Campaigns will simplify the process of running on mobile devices, which to date has been complex and technical, and allow them to more easily scale their campaigns beyond PC-based paid search. For larger advertisers not yet investing in mobile, the announcement serves as a mandate that mobile is too big of an opportunity to miss. For large advertisers that are ahead of the curve when it comes to mobile, this announcement may be viewed with disappointment. Historically, Google has been synonymous with granularity after all, the QS (Quality Score) metric at the heart of the algorithm is all about rewarding all parties for the best ad match to the right user, right device and right time. Enhanced Campaigns seems out of step with this mantra. 2. The single-campaign format will lead to a loss of some targeting and control at least in the short term. Since advertisers will no longer be able to create granular campaign segments for

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PC/Laptop, mobile and tablet, they will need to incorporate and test new methods for optimizing across devices within the singular Enhanced Campaigns format. For luxury retailers and advertisers whose research has clearly demonstrated that tablet users have different demographic, consumption and behavior patterns, this is a net negative in the near term as tablets are no longer broken out as unique targeting options. 3. The auction will get more heated, with a probable rise in mobile CPCs. There likely will be more net mobile competition and less net granularity, which theoretically will be a recipe for increased mobile CPCs. On the consumer side of the coin, it is reasonable to assume that the mobile ad experience will improve. By taking control of where certain ads are displayed, Google will be able to use its data to decipher good mobile experiences from bad ones. For example, insight into bounce rate or other metrics will allow Google to re-assign poorly optimized mobile ads to the desktop. When Google announces any change to AdWords, its news. And when the change is a major one as is the case here as it represents a significant shift in its view of search it is huge news. The following report outlines the update and implications for sophisticated AdWords advertisers.

Googles Mobile Mindset

To understand what precipitated the introduction of Enhanced Campaigns, some context is necessary. At the 2012 Open Mobile Summit, Google announced that it was moving toward a mobile first philosophy. Obviously mobile which in this case includes smartphones and tablets has exploded in terms of users, comprising about 25 percent of all searches today. But due to the complexity of managing and tracking mobile campaigns in addition to their PC/Laptop campaigns, marketers have been somewhat slow to adapt to that change even though the tools to do so have long been in place within AdWords. Google decided that to help marketers adapt more effectively, it needed to restructure how AdWords users manage their accounts. Whereas media managers must currently create multiple iterations of essentially the same campaign one for PC/Laptop, one for tablets, one for smartphones the new system will require just one campaign that can be targeted to multiple devices and platforms. Google has also taken away the ability to target tablets, because its data show the gap in performance between PC/Laptop and tablets has shrunk due to the proliferation of cheaper tablets. (Historically tablets have converted better and had higher AOVs because tablet owners were more affluent.) Additionally, it will no longer be possible to run a mobile-only campaign. While this could streamline workflow, there are some tradeoffs especially in terms of bid and budget management.

Impact on Media Strategy

The following section outlines the key changes that come with Enhanced Campaigns, their implications and some thoughts about how advertisers should manage their campaigns when the switchover goes into effect.

Bid Strategy
As stated above, rather than using disparate campaigns to manage across devices, advertisers will now create a single campaign with bids that are tied to a default PC/Laptop bid. This is important because marketers will no longer be able to manipulate mobile and desktop campaigns within their respective silos. Instead, advertisers will need to introduce new tactics, such as using a bid multiplier a percentage of the default desktop bid to bid for mobile at the campaign level. For instance, if you see that the ROI for smartphones is lower than it is for PC/laptop, you will set your bid lower until you reach target ROI. However, just because a keyword is in a campaign with other similar keywords, there is no guarantee that the mobile multiplier will be the same because performance often varies from keyword to keyword. Before the change to Enhanced Campaigns, advertisers could bid based on those variations across all devices. Now, marketers will need to identify an acceptable average across keywords in a campaign (which involves overpaying for some keywords and underpaying for others), limit campaigns to just variations of a keyword, or come up with workarounds. For advertisers, more labor will be required to achieve the same result as in the past. Large advertisers will have to create more campaign-level granularity, putting in greater effort for a result that seems to be less certain than before.

Managing Creative
Creative messaging will work a bit differently as well, and advertisers will likely find the difference an improvement. Since marketers will be running what are essentially blended campaigns simultaneously targeting mobile, tablets and PC/laptops, their creative will automatically display across all devices. Marketers with a mobile messaging strategy will still be able to craft ads that are only assigned to smartphones. There will also likely be some ability to customize creative by location, but like many things at this early stage, how that will be managed remains unclear. What is clear is that advertisers with creative strategies tailored to each device will be better positioned within the new environment.

Measurement
Last March, Google updated its privacy policy and Terms of Service. This update allowed individuals to work more seamlessly across all Google products and made it easier for Google to tailor the experience to each individual, as well as increase the ability to share information. This was the first step in Googles effort to track users across products and devices. That step, coupled with this new approach to AdWords, results in a greatly improved attribution solution, as Google will be able to track conversions across devices. Google will also start tracking more types of conversions (e.g. app downloads and time per call) to help marketers measure searchs worth beyond direct sales, and will do away with the $1/call charge for phone extensions. There are two things to consider, however: the advertiser must use Google Conversion tags and the cross-device attribution will work only for users who remain signed in (that official number is not available, but assume a small percentage of overall users). Brands that are wary of sharing their data with

Google will have to decide whether the benefits of better attribution outweigh their concerns about keeping the data. Perhaps the most interesting aspect of Enhanced Campaigns is that even though Google is embracing a mobile first mentality, it appears as though it has, at least for now, prioritized streamlined workflow over greater control of mobile campaigns. Search marketers have had the tendency to see mobile as an add-on to traditional search campaigns, and initially Enhanced Campaigns could reinforce that perception by using PC/Laptop as the foundation for campaigns. In the long term, though, we expect to see improved tools and targeting specifically designed to make mobile campaigns more advanced.

Conclusion
The introduction of Enhanced Campaigns represents a very mixed story for search marketers. For the average search marketer, Enhanced Campaigns represents a win as now those who have not had the time, or perhaps resources, to develop their search programs will be empowered to leverage the mobile opportunity. For more sophisticated marketers, the change initially represents as many challenges (e.g., loss of bid control and loss of tablet granularity) as opportunities. As usual, the race will now be on to figure out how best to compete in this new game. Editors note: This report was updated from its original version.

About 360i
360i is an award-winning digital marketing agency that drives results for Fortune 500 marketers through insights, ideas and technologies. 360i helps its clients think differently about their online presence and evolve their strategies to take advantage of the new world of marketing communications one where brands and consumers engage in interactive and multi-directional conversations. Ad Age recently named 360i the #2 Agency in the country in its 2013 A-List issue and also named it one of the Best Places to Work in Marketing & Media for two years running. Current clients include Oreo, Capital One, Coca-Cola, Bravo and Diageo, among others. For more information, please visit blog.360i.com or follow us on Twitter @360i.

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