Google: ‘Most advertisers inherently value mobile less than desktop’

Most advertisers harbour a deep-rooted aversion to buying mobile media on Google because it’s easier to see the value of clicks on desktop but a shift in this mindset is imminent, according to the company’s vice president of product management Jonathan Alferness.

This is because the company’s grasp of the fragmented customer journey is tightening, meaning it can more accurately show companies how much bang they’re getting for their marketing buck. Google’s tussle to elevate the value of its inventory on smaller screens is well documented with a recent study showing that advertisers are paying higher prices for fewer clicks on mobile search.

“Most advertisers inherently place less value on mobile than they do on desktop and that is down to seeing those direct conversions on desktops whereas the conversions are harder [to see] on mobile,” Alferness told The Drum. To address the issue, the business has accelerated efforts to prioritise mobile ad sales, whether through its mobile friendly search update in April or adding cross-device metrics to its Doublecick advertising platform for the first time last month.

And yet the sheer speed of these changes has caught many advertisers off guard with too few adapting their media strategies to capitalise on the shift from big blocks of media consumed to smaller slices. Google has seen a 3 per cent drop in clicks on display ads since changes to its search algorithm to favour mobile sites in the last quarter versus Facebook’s increase 11 per cent in the same period, according to Adobe.

“We need to help marketers see that shift is happening with real metrics that we can put in front of them so that they’re advertising dollars start to shift as peoples eyeballs and mentality does,” said Alferness.

Google’s mobile problem isn’t just down to measurement issues. Indeed, the company believes part of the advertiser apathy toward the medium stems from a lack of knowledge on its creative potential. Speaking at Jellyfish’s Digital Journeys event yesterday (16 July), the search firm’s director of performance Matt Bush said advertisers are underestimating the value of clicks on mobile by as much as ten times.

“Advertisers aren’t doing enough to connect with rich data to give users a powerful service from mobile advertisers. There is too much standard content going onto mobile,” said Bush. “Results in the US are enormous where we’ve seen a four times increase on the value of clicks on desktop and ten times when you take into account mobile clicks. 35 per cent of all traffic on Cyber Monday came from mobile but only 20 per cent of conversions were from mobile.”

With massive revenues at stake, Google needs to come up with riposte to Facebook’s people-based marketing approach. The social network’s cookie alternative Atlas launched last year with much fanfare and has proceeded to woo advertisers with the promise of true cross-device management. Despite the popularity of Facebook’s cross-device solution, Alferness talked up Google's own ad tech stack’s ability to reach beyond just social media.

“When you come to Google you come with something that you don’t arrive at Facebook with and that’s intent,” said Alferness. “If we can understand not just your intent but are able to leverage all our technology and data to better understand what you’re going to do next then those errant signals in my mind are an order of magnitude more valuable than the serendipity that you might get on a social network.”

It’s a cross-device measurement battle that will ultimately be lost and won on quality. Google may have fewer actively logged in cross-device users than Facebook as a result of its latent shift from cookies but it has masses of so-called deterministic data, which is deemed more accurate at matching devices.

It isn’t all doom and gloom for Google on mobile. The company’s chief financial officer Ruth Porat cited mobile search advertising as well as YouTube as the main drivers for overall advertising revenue growth in its latest quarter. And while it doesn’t specifically break out mobile sales, the business revealed that the rates on mobile increased and the rates on desktop did not decline – “the gap is narrowing,” Portar said.

There are several ad formats in the pipeline that Google will expect to close that gap further. One such feature is set to change how publishers build native programmatic campaigns; rather than ask developers to build campaigns, Google is testing a tool that can build and format the ad on their behalf. Click to call ads are another format Google wants to grow, with early instances playing a key role in showing the impact of its inventory on in-store sales.

If advertisers are to buy into potential rewards of mobile and programmatic advertising then Google has to practice what it preaches. It has committed to spending 60 per cent of its digital marketing budget on programmatic with much of the innovation in the space pouring from its internal agency Media Lab.

New banner formats are currently being designed and tested that the search business hopes will address what it calls the three myths of programmatic; programmatic is the death of creative, programmatic is only good for direct response and programmatic is just about the technology.

Emily Sears, head of digital at Google’s Media Lab, said: “In the past I think we’ve overcomplicated programmatic quite a bit by thinking about how do we fit the technology in with what we want to do whereas now we’re focused on how it serves our ability to deliver creative that matters to people.”

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