Why the Google Rally Is Far From Over

Mobile advertising may get more expensive soon. Last week, Google (NASDAQ: GOOGL  ) introduced AdWords enhanced campaigns, effectively blurring the lines between desktop and mobile ads.

Not literally, per se. Instead, Google is asking clients to create a single campaign and then specify their targeting by bidding higher on certain variables. For example, a local ice cream parlor might bid highest for ads on mobile devices when the customer is within a half-mile of its shop.

Previously, Google required advertisers to specify different campaigns for different devices. The resulting system, while complex, allowed advertisers to keep costs low by bidding cheaply for smartphone and tablet ads. Enhanced campaigns change that.

Some advertisers aren't happy about the shift. "Yea, that is nice in theory. But I think advertisers may want more control, not less. Of course, Google wants more advertisers, more spend, more impressions and higher [cost-per-click]," writes Barry Schwartz of Search Engine Roundtable, which closely tracks Google's search ad business.

No doubt that's true. Both Google and Facebook, its primary competitor, are working overtime to figure out how to monetize the deluge of mobile data flowing through their networks on a daily basis. Already, more than 10% of Facebook's active users -- or 157 million -- engage with the social network using nothing more than a phone or tablet.

Google, meanwhile, has seen cost-per-click for mobile ads decline for five consecutive quarters despite surging use of Google services on mobile devices. CEO and co-founder Larry Page had to do something to reverse the trend.

Not that enhanced campaign is a gimmick: it isn't. Rather it's a smarter, simpler system for bidding on ads in a world where "computing" no longer means sitting down at a desk.

Also, context matters. Advertisers want the opportunity to pitch their wares at moments of maximum opportunity, and they'll pay for contextual data that tells them when those moments are. Everybody wins, especially investors.

It's more important than ever to understand each piece of Google's sprawling empire. In The Motley Fool's new premium research report on Google, we break down the risks and potential rewards for Google investors. Simply click here now to unlock your copy of this invaluable resource, and you'll receive a bonus year's worth of key updates and expert guidance as news continues to develop.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2248226, ~/Articles/ArticleHandler.aspx, 10/1/2014 12:22:26 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement