The Future of Advertising, According To Google

If you want to know where Google‘s going next in advertising–which is a large chunk of where a lot of online advertising overall is going–you need to askSusan Wojcicki, the search giant’s senior vice president of advertising.

Wojcicki drives Google’s accelerating moves well beyond its search ad roots to display, video, and mobile ads. In the past year or so, Google has pushed hardto expand display revenues with a series of acquisitions in ad technology. At the same time, Google faces substantial challenges from Facebook and others pioneering new kinds of ads in the era of social and mobile.

At the ad:tech conference in San Francisco,Wojcicki talked about her “five ideas for the future of advertising.” Not surprisingly, those ideas are somewhat self-serving for Google, which just happens to have answers for most of the challenges she raises. But they also provide clues to where Google will try to push the ad industry as more media goes digital.

In the brief Q&A after her keynote, she was joined by Neal Mohan, Google’s VP of display advertising, who is well worth hearing in his own right. Here are the highlights of what they had to say:

Advertising is the lifeblood of the Internet, she says. But it’s undergoing tremendous change. We need to move as fast as the users. So I spend a lot of time at Google thinking about the future of advertising and how we’re going to reinvent it. The first thing we do is think about users and where they’re going and how are they changing their behaviors.

Imagine this woman in 2020, only seven years away. She’s going to wake up and read her news on a screen, listen to her music, watch TV on demand, use a mobile assistant when she’s on the go, etc. Her life is going to be all digital. So a lot of the ad dollars need to move online.

Wojcicki see five core ideas shaping the future of digital advertising:

1) Choice: Ad views will be voluntary.

We want to move to a model where the user is choosing to view an ad, she says. We’re paid on a cost-per-click basis where the user chooses to click on the ad. It’s up to the ad system and the publisher to show the right ad at the right time.

TrueView ads on YouTube are the same way. About 70% of ads on YouTube are now TrueView. We’ve seen a reduction of 40% in dropoff of ad viewing. One ad on YouTube got 33 million views, an ad by Pepsi featuring race car driver Jeff Gordon, pretending he’s going undercover to buy a car. It got all those views even though it was four minutes long. (Check it out above.)

Another ad format is engagement ads, which show in standard ad formats, but when users hover their mouse over it, catalogs, videos, and other features come up.

2) Control: Users will participate in the ecosystem if we provide enough value and control.

In order to serve things that are relevant to me, you (ad folks) need to know something about me, she says. It’s really important that the ads are relevant and useful. We know this works.

We’ve seen a 30 times increase in programmatic buying of display ads since 2010. But one thing has been missing. That is having users have the opportunity to say this is what I’m interested in. We have an ad preference page where we list the ad preferences of each user. When we offer this opportunity, most people take it. But we need to do this at scale. How can advertisers connect to users at scale?

3) Charm: Ads will be more interactive and beautiful–at scale.

Scale is the important word here. One format we’ve been working on is engagement ads, which give you an opportunity to be more creative. Samsung livestreamed their 90-minute event of the Galaxy S4 launch via a lot of channels, including ads. Click on that ad, and you got a livestream over the existing page. It was one of the most popular concurrent, livestreamed events we’ve seen, right up their with William and Kate’s wedding.

4) Connected: Ads will help people live their lives on the go.

Users have multiple devices, their lives are fragmented across many devices. And the devices are blurring into each other. That’s why we announced Enhanced Campaigns, she says, calling it the biggest change in Google’s AdWords structure in years. The main thrust of the changes, she says: You should be able to target not devices but people. We should be able to get ads that are relevant to where we are and what we’re doing right now.

5) Calibration: All ads will be measured. Clicks will be only one type of measurement.

We need the right type of measurement for branding too, Wojcicki says. So if you’re a brand advertiser, you’re thinking about reach and impact. For reach, she says, we’ve been working on Active GRP and Active View metrics and building that into all our products.

Impact is harder. Recently we announced a brand lift survey product where we can run surveys to users who have seen the ad. We also made the biggest change to Google Analytics in a long time. We redesigned it so we can have an understanding of data coming from different screens, different systems like customer relationship management, etc.

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