Google's step to increasingly push ad budgets into mobile seems to have forced the hand of advertisers asking for the ability to make separate base bid adjustments for ads running on smartphones, tablets and desktop devices. Advertisers call the move "significant" with challenges.
The change -- which applies to all campaign types, even when keyword targeting is not used -- benefits Google because advertisers are happier with the opportunity to get better overall returns from advertisers, and advertisers benefit by being able to have more control over their costs.
The move allows advertisers to anchor base keyword bids to a specific device and then set bid adjustments for each up to 900%. Greater control means that advertisers can optimize with greater precision for one campaign that can reach consumers across devices, rather than having separate campaigns specific for each device.
With the increase in mobile ads, the idea of having bids based on the desktop seemed like a step backward.
David Lau, VP of paid search and programmatic at iCrossing, doesn't think it's that cut and dry. The challenge to advertisers remains the same -- they're unable to set distinct bids by device type and instead need to set a base bid and use percentage modifications, he said. "The benefit to advertisers aren't drastically improved and the changes are not large enough that it reverses Enhanced Campaigns, where we'd be able to create, optimize, and track separate campaigns by device type," he said.
Lau admits it helps with the current limitations on bidding for devices because advertisers can now bid on tablets separately again, and separate the reports for desktop and tablet.
"Quite frankly, this was long overdue, and Google should have always allowed advertisers the opportunity to control bids on tablet devices," said Brian Valentini, VP, group director at DigitasLBi.
Valentini believes the change will send CPCs lower. The opportunity to bid separately on tablet ads provides reach that advertisers will not want to give up.
"Most advertisers see significantly different conversion performance for tablets vs desktop; often times tablet traffic is less efficient from a conversion standpoint, but it still converts," he said. "Advertisers will likely want to decrease their max CPC bids across tablets to take advantage of the search volume, but improve their efficiencies."
The move does not come without challenges. Advertisers will need to spend additional time segmenting their data by tablets to dig in and see the performance, and create next steps, Valentini said. Savvy advertisers focused on performance marketing will likely increase their time spent on analyzing reports to ensure they’re taking full advantage of this feature.
Aaron Levy, manager of client strategy at Elite SEM, expects the change will lead to a net increase in CPCs for mobile. "Advertisers will be able to more precisely isolate what works and what doesn't, which in turn will allow them to get more aggressive for mobile as a whole once it's isolated," he said. "Competition should rise for terms that tend to skew mobile-specific -- location queries, voice-and-question driven queries and the like will have more advertisers fighting for a now smaller sized screen."
Tablets should see a sharp drop, says Levy, who says that nearly all of Elite SEM's clients have a lower conversion rate due to the way people use them, Levy said. He suspects most advertisers will either abandon them entirely or drop their bids. He suggests that advertisers who have specific tablet strategies should find a nice little efficient pocket and capture more impression volume.
"As a result of the tablet drop, expect a bit of a nudge in CPCs for desktop computers," Levy said. "As the inefficiencies from tablets are cut, advertisers will be able to be more aggressive for what really works."
Agencies and technology providers are torn between whether the move will increase or decrease CPCs for advertisers. Ted Schuster, director of advertising at Resolution Media, said advertisers may begin "throttling" bids according to performance more finely and, in doing so, it shouldn't have a significant impact on overall CPCs, but advertisers could see a slight decrease.
Claire Sheils, senior digital media specialist at Chacka Marketing, expects CPCs may rise on mobile with a more aggressive push compared to desktop. She does anticipate lower CPCs on tablets, and mentioned that CPC costs on mobile and desktop will largely depend on the nature of the business, whereas Chris Costello, senior director of marketing research at Kenshoo, thinks this could be the change that narrows the gap between desktop and mobile click pricing, and plans to monitor it closely.
With regard to Google's redesign of AdWords to focus on mobile, Tim Krozek, CEO at Boost Media, calls the "flip" to mobile overdue by between 18 and 24 months, meaning that more searches on mobile devices occurred more than a year ago. Many, like Krozek, could see the trend coming long before.
"Google has been providing a sub-par mobile experience for both consumers and marketers for well over a year," he said. "Now that they’ve done it -- moved to the new ad formats -- and they’ve done their research and testing, it’s going to work and it’s going to work for online marketers and for Google."