Google Enhanced Cam­paigns is fun­da­men­tally chang­ing the world of search adver­tis­ing by group­ing desk­top and tablets and dis­tin­guish­ing them from smart­phone and other mobile traf­fic. The new, uni­fied device tar­get­ing func­tion­al­ity in Enhanced Cam­paigns no longer allows mar­keters to sep­a­rately tar­get mobile, desk­top and tablet devices . Instead, desk­top and tablet bids are forced to be the same and mobile bids are sim­ply set as a per­cent­age adjust­ment rel­a­tive to desk­top and tablet bids.

Do adver­tis­ers need to recon­sider their search adver­tis­ing strat­egy given these changes? The answer is yes, absolutely. We looked at the lat­est search mar­ket­ing and cost-­per-­click (CPC) trends across nearly 100 major U.S. adver­tis­ers rep­re­sent­ing more than $100 mil­lion in ad spend from March through May 2013. Here are some of the findings:

Strong CPC Growth Expected with Google Enhanced Campaigns

With the intro­duc­tion of Enhanced Cam­paigns, the his­tor­i­cally lower CPCs for tablet cam­paigns should increase to reflect desk­top CPCs. We’re only just begin­ning to see this trend mate­ri­al­ize with a 3% increase in tablet CPCs with respect to desk­top CPCs, along with a smaller 1% increase in mobile CPCs. These per­cent­ages will likely rise as adver­tis­ers con­tinue migrat­ing to Enhanced Cam­paigns until the July 22 dead­line set by Google.

Overall Google CPC Increase

The over­all CPC trends across all devices includ­ing desk­tops also show strong growth. Google CPCs increased more than 6% over the last three months alone — a sig­nif­i­cant jump. Although CPC increases typ­i­cally occur in spring, espe­cially in retail as mar­keters increase their ad spend for the sum­mer months, sea­son­al­ity can be ruled out as the sole dri­ver for this trend. Enhanced Cam­paign migra­tion is one con­tribut­ing fac­tor to over­all CPC inflation.

One other trend we noticed is that CPCs on Google have sta­bi­lized. For the past two years, Google CPCs fell on a year-­over-­year (YoY) basis due to the increase in mobile and tablet traf­fic where CPCs were lower. How­ever, for the first time in seven quar­ters, the CPCs on Google are flat YoY and we antic­i­pate that CPCs will rise on a YoY basis again start­ing next quar­ter. We expect this trend to pos­i­tively impact Google’s ad revenue.

YoY CPC Change

Google Mobile Bid Adjust­ments (MBAs) vs. Adobe MBAs

Due to increas­ing CPCs, mar­keters must ensure proper migra­tion to Enhanced Cam­paigns in order for their cam­paigns to effec­tively and effi­ciently per­form. Prop­erly set and man­aged MBAs, which deter­mine bids on mobile devices rel­a­tive to bids on desktops/laptops and tablets, are crit­i­cal to a suc­cess­ful tran­si­tion. With Enhanced Cam­paigns, MBAs con­trol how much mobile ad spend is allo­cated ver­sus desktops/laptops and tablets – there­fore, it is imper­a­tive for MBAs to be set pre­cisely so return-on-ad-spend (ROAS)/ROI is max­i­mized across all devices.

Google’s MBA sug­ges­tions are based on how “sim­i­lar adver­tis­ers” bid on mobile com­pared to other devices, but we have found that these num­bers typ­i­cally don’t reflect the per­for­mance of indi­vid­ual cam­paigns and ad groups. The mobile bid sug­ges­tions are not tai­lored to an adver­tiser and the per­for­mance of a spe­cific cam­paign. When com­par­ing the dis­tri­b­u­tion of Adobe MBA rec­om­men­da­tions ver­sus Google MBA sug­ges­tions for sev­eral adver­tis­ers, we found that Google MBA sug­ges­tions only take on a few val­ues. More than 90% of all Google MBAs were either –20% or 0%, which is less than opti­mal and leaves other val­ues remain­ing (see chart below).

Distribution of MBA Factors

ROI across desk­top, tablets and mobile devices should be accounted for when opti­miz­ing cam­paigns for effi­ciency. If the desk­top ROI is much bet­ter than mobile, or vice-versa, then it sug­gests that there is  room to fur­ther adjust the MBAs and traf­fic ratio between devices to achieve higher over­all effi­ciency. Look­ing at a sam­ple of four major cam­paigns in the U.S., the chart below shows that Adobe MBAs on aver­age achieve an ROI ratio between mobile and desktop/tablet much closer to 100% than Google’s MBAs. Using Google’s MBAs, mobile ROI is lower on aver­age than desktop/tablet, which sug­gests that Google’s MBA rec­om­men­da­tions tend to be too high and mobile bids should be low­ered further.

Mobile ROI

Through Adobe Media Opti­mizer, Adobe was the first adver­tis­ing plat­form provider to sup­port Google Enhanced Cam­paigns and today we are excited to announce the algo­rithm update in Adobe Media Opti­mizer to ensure max­i­mum ROI for ad cam­paigns and highly effec­tive MBAs. Unlike Google MBA sug­ges­tions, algo­rithm rec­om­men­da­tions in Media Opti­mizer are based on actual con­ver­sion and engage­ment data spe­cific to each cam­paigns. For more infor­ma­tion on how Adobe lever­ages the power of rich ana­lyt­ics data mar­ried with advanced algo­rith­mic bid­ding, see our recent post here.


1. Algo­rithms become more impor­tant. Search mar­ket­ing is get­ting increas­ingly com­plex – and it is becom­ing increas­ingly dif­fi­cult to use a man­ual approach to get the best pos­si­ble per­for­mance from a rel­a­tively sim­ple cam­paign. Not only are there GEO spe­cific tar­get­ing options avail­able, there are also device-level and time-­of-­day/day-­of-­week options to con­sider. While MBAs are Google’s attempt to sim­plify this for mar­keters, they also com­pli­cate mat­ters for the adver­tiser. Not only does one have to con­sider the bid, but also the mobile adjust­ment fac­tor to get the most out of a search cam­paign. This only increases the need for auto­mated algo­rith­mic bid­ding plat­forms that resolve the com­plex­i­ties to man­age such programs.

2. CPCs on Google will con­tinue to increase this quar­ter to end pos­i­tive or flat YoY for the first time in almost two years. The Enhanced Cam­paigns tran­si­tion will drive com­pet­i­tive pres­sure on tablet devices through June and July, and the full effect of this change on the mar­ket will hap­pen in Q3. We antic­i­pate CPCs will rise by 5-­10% on a YoY basis in the next two quar­ters. This increase is par­tially attrib­ut­able to Enhanced Cam­paigns, the other fac­tors being the com­pet­i­tive land­scape among adver­tis­ers and macro-­economic conditions.

3. Spend­ing on Google will increase by 15–20% YoY. We have seen a 15% YoY increase in ad spend despite a fall in CPCs (i.e. all the increases were volume-driven). As CPCs increase due to the Enhanced Cam­paign migra­tion, we can expect the spend lev­els on Google to fur­ther increase beyond the cur­rent 15% YoY growth. In other words, we expect 15-­20% growth in spend on Google due to 10–15% increase in traf­fic growth and the remain­der from the increase in CPCs.

4. Tablet opti­mized sites become even more impor­tant. Tablet search cam­paigns have enjoyed sig­nif­i­cantly higher ROI than equiv­a­lent desk­top cam­paigns due to two rea­sons: a) They con­vert just as well if not bet­ter than desk­tops. b) They enjoy lower CPCs due to lower com­pe­ti­tion. As the CPC advan­tage dis­ap­pears, mar­keters have to focus on bet­ter user expe­ri­ences to increase the con­ver­sion rate on tablets to drive ROI.


About Adobe Media Optimizer

Adobe Media Opti­mizer is the industry’s first fully inte­grated dig­i­tal adver­tis­ing plat­form that deliv­ers cross chan­nel ad man­age­ment and opti­miza­tion across search, dis­play and social media cam­paigns for peak return on invest­ment. The solu­tion deliv­ers more than 300 mil­lion monthly prospects and cus­tomers and is used by more than 400 global cus­tomers across indus­tries. Media Opti­mizer man­ages more than $2 bil­lion in annu­al­ized ad spend.