For a long time Google has dominated direct-response advertisers' online budgets by being able to show a direct correlation between clicks on its ads and purchases on brands' sites. But recently Facebook has been making inroads into Google's territory. Now the search giant is pushing back.
On Tuesday, Google announced new ways for advertisers to buy and measure search and display ads based on whether those ads actually lead to product sales, even if those purchases aren't made immediately. The company also unveiled new search ad formats aimed at direct-response advertisers in the hotel, auto and mortgage provider categories.
Traditionally Google has benefitted from so-called "last-click attribution," in which someone clicks on a Google search ad to navigate to a brand's site and purchase a product. However that model ignored all the other factors that may have led to the purchase, such as TV commercials, billboards or online banner ads. Facebook has recently been trying to move marketers away from last-click attribution models in favor of ones that judge an ad's impact based on sales. And now Google is doing that too.
Advertisers will be able to specify how they want to attribute the performance of their click-based Google search and display ads, which Google will incorporate into how those ads are sold. Advertisers will also be able to use their own data, such as anonymized in-store purchase information, to measure how a keyword-driven ad drove sales.
Like Facebook has, Google has begun connecting a campaign's performance across different devices to show, for example, that an ad viewed on someone's smartphone might lead to a purchase made later on that person's laptop. Later this year the company will enable advertisers to incorporate that information into the way they buy ads from Google.
Google is also rolling out tools for brands to gauge the specific impact their Google campaigns had in driving results. Using these tools, Airbnb rival HomeAway saw a 49% lift in click-related traffic to its site, according to Google.
Google's VP-product management for AdWords Jerry Dischler said the company's moves aren't a reaction to Facebook's moves. Instead, they're in response to the context in which people are searching, such as while standing in a retailer's store. In what should be a surprise to no one, Google said that more searches are being conducted on mobile than on desktop in 10 countries, including the U.S. and Japan.
That change in consumer behavior led Google to rethink the traditional conversion funnel that plots a person's path to purchase from an initial ad to raise awareness to follow-up ads designed to push them closer to purchasing the product to the final ad that directly leads to the purchase and finally the actual purchase.
"The purchase funnel, which was depicted as this linear process but was never really as simple as depicted, is officially dead at this point for the always-on consumer," Mr. Dischler said. In its place marketers must find ways to advertise based on "these short bursts of intentful [sic] activities throughout the day that we've been calling micro-moments."
To help advertisers market based on these so-called "micro-moments," Google is trying to give advertisers more flexibility with which search ads they show people. Google is now recommending which categories an advertiser should target based on the content on the advertiser's own site and is suggesting how much the advertiser should be willing to pay for each click on its ad based on the category. Advertisers will also get a clearer view into what the ads will look like when people see them and what people will see when they land on a page linked to within the ad.
Google is also adding new mobile search ad formats to help certain types of direct-response advertisers push people closer to the point of purchase.
Automotive brands can now purchase Automobile Ads that offer image carousels people can swipe through, a well as a link to the advertiser's site, a la Facebook's and Facebook-owned Instagram's carousel ads. Unlike Facebook's version, within Google's ads people can tap on one of the photos to view more information about a car.
Google also announced the global roll-out of its hotel ads, which show people room rates and link to the advertiser's booking site.
Google is also adding mortgages to the U.S. version of its Google Compare shopping tool, which launched as a way for people to compare auto insurance prices. Similar to Google's pay-to-play Google Shopping search engine, mortgage providers will be asked to pay Google to show their rates within the comparison shopping tool, which let people filter offers based on price, interest rate, terms and fees and connect with a lender through the ad.