Today Google announced a major change to the way they will allow advertisers on the Search Platform to reach the Mobile and Tablet Audience. Read on for information on how the new enhancements to Google Adwords campaigns may affect you, as well as some tips on how to optimize your account for these changes.

The important points from Google’s announcement are summarized below, as well as our analysis and potential impact to our advertising efforts.

Summary of changes:

• During the next 4 months, Google will phase out the ability to build unique campaigns targeting Desktop, Tablets and Smartphones.  In its place will be one campaign format that will serve to all three devices categories.
• There will no longer be the ability to differentially target between desktops and tablets (they will be considered one in the same)
• Within the one campaign format, we must set our “base bids” based what we would like to serve for the desktop and tablet environment.
• If we want to change our bidding strategy for smartphones, we must modify your base bid from the campaign by a fixed factor at the campaign level.  We may target between 0% and 300% of your desktop bid.
• If we want to serve different ads for the smartphone environment, you must create a new ad in the campaign and designate it as “mobile preferred” that will cause the ad to be selected when a search is conducted in the smartphone environment.
• Reporting granularity will stay intact, you can continue to measure performance segmented by device.
• The Google Display Network is unaffected, this change impacts only Search Campaigns

Important Implications on existing advertising:

• Today tablet traffic typically represents 5-10% of search queries.  If the performance of tablet traffic is under-performing compared to your desktop experience, this change will impact you because you will no longer be able to differentially bid for tablets, or opt out of running advertising for tablets.  If your website is not optimized for tablets, especially if your website utilizes Adobe Flash for your tablet experience – your advertising campaigns will be affected.  Note that iPads do not support Flash, and iPads represent an overwhelming majority of tablet users.
• You will not be able to run mobile only campaigns anymore.  The only way you can attempt to do this would be to run a desktop campaign, and then set your mobile bids to 300% of your desktop bids.

Market Analysis and Potential Impact on the Google Adwords Marketplace / Auction:

• We believe that this change will create additional demand and upward price pressure on mobile and tablet auction prices.  This is because users who are not very familiar with the Adwords platform or optimization, will not be able to fully realize and measure the impact of these changes and adjust their bidding accordingly.
• We believe that this change will create marginal downward pressure on desktop advertising prices.  This is because users without a lot of experience with the Adwords platform will likely deplete their marketing budgets faster by being opted into the Mobile and Tablet Marketplace, leaving additional inventory in the desktop market.  In addition, sophisticated advertisers will see pressure from being forced to run tablets, which will impact their overall KPIs.  Typically tablets do not convert as well as desktop advertising due to lack of website optimization for the tablet experience.
• We believe this move is motivated by two factors, first is to force additional participation in the Mobile / Tablet auctions (which are currently heavily underserved – according to Google, only 5% of search advertisers are currently opting into Mobile campaigns).   Secondly, this will provide additional data to create additional targeting and tracking options in the future, specifically around user based instead of device and session based tracking.  Secondly, this will provide additional data to create additional targeting and tracking options in the future, specifically around user based instead of device and session based tracking.

Suggestions going forward:

• Advertisers will need to restructure most mobile campaigns in order to accommodate this new campaign requirement.  This means new strategies will need to be developed around setting bidding for smartphones, given the loss in specific bid setting for smartphones at an individual keyword level.
• Advertisers should concentrate on improving the tablet experience. Recommendations for improving this experience varies from advertiser to advertiser.