Why Businesses can’t run without Google and Facebook

Google controls many of the ways businesses access customers online making it almost impossible to run a company without buying advertising from the internet giant. As politicians increase scrutiny of large technologies companies, Google’s lock on these digital relationships is becoming a potential liability. While consumers pay nothing for most Google services, some businesses say they often can’t avoid giving more money to the company because the internet giant is the main source of answers when go online to get information.

While Facebook matches advertisers with people interested in certain topics, Google can tell what a person really wants, right as that person types their query into the search bar. Showing up at the top of search results is imperative for most companies and in recent years Google has changed its software, especially on smartphones, to make buying ads the best way to achieve that goal. It’s not possible to run a business without advertising on Google.

Nowhere is Google’s power more pervasive and potentially damaging to businesses than in the esoteric market for ‘branded keywords’. This is where businesses buy ads based on their brand names. Some businesses say that they have to buy these ads whatever the cost because rivals can bid on the keywords too. In recent years, this pressure has increased because on mobile devices Google search ads show up at the top of the results, rather than on the side of the page with desktop results. This means people are more likely to click on the ads, rather than the free, ‘organic’ links to companies’ websites.

Google has said in the past that it doesn’t break antitrust laws and that competition online is just a click away. Google also regularly stresses that it never accepts payment to be included in or to be ranked higher in organic search results and doesn’t manipulate search rankings to benefit advertisers. Beyond just branded keywords, the cost of all types of Google search ads has been rising at about 5% a year, according to Merkle, that’s well ahead of US inflation, which is running at 1.6% currently.

Many Google advertisers are happy to pay more because the company has so much data that it can target the marketing messages and generate big returns on that spending. When it comes to brand keywords, some advertisers will spend beyond what makes sense. These decisions are not as rational. That’s a question that comes up when advertisers see costs go up. People are thinking about that and testing it by stopping buying those branded keywords to see what happens. These tests usually result in a decline in traffic, both from search ads and from free, on organic results.  How big depends on the advertiser.

PPC changes 2018 and their impact on advertisers in 2019

Major changes in SEM made waves throughout 2018 and are redefining nearly every aspect of paid search marketing. There were a number of momentous shifts, nearly all with a common thread of more automation and machine learning.

Google Ads: New brand name, new UI – The name change from AdWords to Google Ads is indicative of the fact that keyword selection plays a lesser role in paid search marketing than even a year ago, but more broadly the name change reflects the platform’s growth from one created for text ads to one that now includes dozens of ad formats across Search, YouTube, Gmail, Maps and a network of partner sites and apps. With the new interface, we lost some things such as Display Planner and gained a YouTube reach planner, notes and the ability to make changes from the Overview page in addition to other new features.

Responsive Search Ads – RSA are part of the continuum of letting machine learning models do the work of ad creative optimization. Some of the initiatives that have come before it: dynamic search ads, automated ad suggestions and Google efforts over the past years to get advertisers to give up manual A/B testing and add at least three ads per ad group. An ad strength indicator and somewhat more extensive reporting for RSA were introduced in August. Same month, Google said it would soon roll out RSA to more languages and in the meantime extend the extra character benefits of RSA to text ads for everyone. This fall, Bing added support for the third headline and second description in text ads, including the ability to import the longer ads from Google.

Exact Match – As with ads more machine learning was injected into keyword-to-query matching in 2018 with the inclusion of same meaning words in close variants of exact match keywords. The match type lost its literal meaning and forced marketers to rethink how they use match types altogether.

AI-powered insights – Google and Bing have dedicated significant resources to developing much more robust recommendation engines in their interfaces. Bing introduced a competition tab, performance insights and location recommendations that highlight performance changes and competitive pressures, all delivered with machine learning. Google also continues to iterate on the data visualizations available from the overview page. The goal is to spend less time downloading and analyzing spreadsheets and more time focused on strategy and creative tactics.

AI-powered bidding – The manual bidding option is now buried below a growing list of machine learning driven bidding strategies, including ECPC. On the smart bidding front, Google introduced Target Impressions share, Pay for Conversions in Display Campaigns when Target CPA is the bidding strategy and rolled out Smart Bidding for search partners. Bing introduced Target CPA and Maximize Conversions bidding strategies.

Audiences: LinkedIn data for Bing, MSAN and more – Bing launched the Microsoft Audience Network (MSAN) which encompasses native ad inventory on MSN.com, Microsoft Outlook and the Microsoft Edge browser, as well as syndication partner for what are now called Microsoft Audience Ads. It uses AI for ad delivery optimization and uses data from the Microsoft Graph for audience targeting, including web and search activity, demographic and consumer behavior activity and select LinkedIn profile dimensions. In October, Bing also made LinkedIn categories of company, job function and industry available for targeting in search and shopping campaigns in the US.

Universal Automation vs. Hybrid Management – Google introduced goal-optimized Shopping campaigns, Smart Campaigns for small businesses and Local campaigns for driving in-store traffic. With Smart Campaigns, everything from ad creation, audience targeting, ad delivery across Google channels and soon landing page creation are automated based on the advertiser’s goal. Goal-optimized Shopping campaigns employ machine learning to automatically optimize ad delivery to achieve the defined conversion goal value, such as revenue or return on ad spend (ROAS). It also combines dynamic remarketing and standard Shopping in one campaign to deliver an ad across Google properties and the Google Display Network. For Local campaigns, advertisers set a budget, and the ads are generated automatically based on ad creative elements from the advertiser and their location extensions. Google automatically optimizes ad delivery across Search, YouTube, Maps and websites and apps in its ad networks.

Based on the trajectory of automation in ads and exact match, this hybrid approach has the potential to spell the end of manual control of match types (except negatives), bid modifiers, geo-targeting and other tools we use for campaign management. This doesn’t mean people will be erased from the equations and certainly not in 2019 but it will require SEM specialists to adopt a very different mindset. We have to embrace machine learning as a tool that helps us find opportunities that are imperceptible through traditional techniques.

New Inventory Locations and Surfaces – There were a number of new surfaces for ad formats that opened up in 2018. Bing’s native ads extending across the Microsoft Audience Network is just one example. In November, Google made AMP Story ads available to all publishers, and there are now more than 100 ad tech vendors with AMP integrations. Hotel deals from Google Search are now featured on the Benefits tab of the new Google One cloud storage app (for Android only at this point). Expect to see more promotional opportunities. Google said more promotions from the Google Store and Google Express benefits and more will eventually be featured on the tab. Google has also been testing native ads in the Discover Feed (originally Google Now) on the front page of the Google app. It’s a limited whitelist test for now, but could open up more native inventory in a prominent location.

Connected TV advertising is growing rapidly, and YouTube says more people are streaming it on their televisions. This fall, “TV screens” became the latest device type for video and display campaigns in Google Ads. Eligible display and video campaigns are running on TV screens by default now, and can be managed with bid modifiers. Expect to continue hearing much more about connected TV advertising in 2019.

Amazon Ads – The Google - Amazon face off started with where consumers start their product searches. Now it’s extending to search and other advertising. Amazon was declared the third-largest digital ad seller in the US by eMarketer in September, (far) behind Google and Facebook. Its ad revenue is expected to increase by 50 percent per year through 2020, which would put its market share at 7.0 percent, up from 4 percent currently. In our Amazon Advertising Forecast 2019, 80 percent of Amazon advertisers said they plan to increase spends in 2019, with 30 percent saying they’ll shift some budget from search.

Google’s strategy to counter Amazon’s encroachment into product search is to partner with retailers. It debuted Shopping Actions in March to address three key challenges on the e-commerce front: (1) how to make mobile shopping from its properties like Search faster; (2) how to maintain market share for product search in a splintering mobile landscape of apps and digital assistants; and (3) how to compete against Amazon. Shopping Actions runs across Search, any Google Assistant-enabled devices, Google Express (which includes Shopping ads that now feature blue shopping tags instead of parachutes), and features a universal shopping cart and a Google-hosted checkout when users save their payment information in their Google accounts.

2018 is kind of a turning point in terms of SEM I think. “Keywords aren’t gone, but they’ve been greatly depreciated. SEM in 2019 is going to be much closer to modern programmatic than it is to the ‘enhanced’ era.