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Google just announced that it is "enhancing" and "upgrading" AdWords for a world where people increasingly use mobile devices.
The changes will take place by the middle of this year.
In fact, Google is eliminating some ad-targeting capabilities — in particular, the ability to target specific mobile devices like tablets.
In addition, it won't be possible to run strictly mobile-only campaigns in the future. Instead, all campaigns will run on both desktop and mobile, according to a weighting factor set by advertisers. (You can weight desktop or mobile ads very low or very high, but there's no option for true mobile-only campaigns.)
Google will "upgrade" campaigns previously created as mobile- or desktop-only to run across all devices.
Why is Google doing this? Wall Street is intensely focused on the gap between Google's desktop cost-per-click metric and the comparable numbers for mobile ads.
In Google's fourth-quarter earnings call, CEO Larry Page expressed a bit of frustration with questions about mobile cost-per-click numbers, saying that efforts to "simplify" Google's ad system would lead to improvements in that number.
In fact, the gap between thecost-per-click metrics may soon go away, as a result of this change.
"On average, they’ll be the same as desktop CPCs after the auto-upgrade rolls out due to increased advertiser competition and all of the auto-set mobile bid adjustment factors," wrote Larry Kim, the founder and CTO of Internet marketing-software company WordStream, in a blog post.
Daina Middleton, the CEO of Performics, said that advertisers should expect prices to increase about three percent as Google rolls out the changes.
Google's revenues will see a similar benefit.
"If Google weren't in such a strong position, it would never get away with this," Richard Zwicky, the CEO of Blueglass, a marketing-software provider and digital agency, told Business Insider. Because of its dominant share of
Advertisers should download all the data they have about the performance of ads across devices now, Zwicky recommended, because he believes that that level of detail won't be available after Google's changes.
(A Google spokesperson told us Zwicky is mistaken: Google isn't changing its reporting about device types.)
Kim said that Google's changes may push many smaller advertisers into
"It's just different and less transparent," Zwicky said.
Update: We asked Google to comment on the changes. Here's what a spokesperson told us:
Marketers will still see the same reports for mobile (CPC, CTR, etc.) and they'll actually get more reports to show how effectively mobile is driving conversions like calls and app downloads so they can compare ROI. They can also use mobile-preferred ads and extensions to control the message in their mobile ads, just now without them having to break out hundreds of separate campaigns. If they value mobile more, they can set a lower base bid and then crank up the mobile bid adjustment so that they're bidding higher for mobile searches.
That doesn't contradict anything online marketers are saying about this change. In fact, getting advertisers to bid higher for mobile searches—and convincing them that there's a return on investment from mobile ads—seems like the whole point.
We've also clarified some of the language we used to describe how campaigns are weighted and how results are reported.