Google’s AdWords Update: Are Desktops The New Fax Machines?

Editor’s note: Richard Zwicky is CEO of BlueGlass Interactive, a digital marketing agency and software provider. Follow him on Twitter @rzwicky.

Does Wednesday’s AdWords announcement mean Google is already acknowledging the end of the desktop?

When AdWords was developed, people only worried about ads delivered from websites to people sitting at a desk in front of a computer. No one cared about phones, tablets were not on the market, and notebooks weren’t useful Internet devices unless they were connected to a wall, just like a desktop.

Over the last 10 years, the variety of devices and interfaces has increased dramatically, and AdWords has evolved to keep up, adding features, and offering campaign managers more options and ways to manage campaigns.

The problem is, like any IT project gone awry, it’s gotten out of hand. Ask any developer “Is it possible?” and invariably, the answer is “Yes but…” In Google’s case, whatever was requested usually got built. AdWords evolved like a really inspiring dev version of a Frankenstein experiment, built to address all the possibilities asked of it.

But on Wednesday, Google addressed this problem and changed the landscape when it announced it had to move on, even if we weren’t ready; the AdWords platform couldn’t continue to scale to add more device types and options ad infinitum. So, they took an ax to the options, and simplified everything into a campaign management interface called Enhanced Campaigns.

Few companies in the world consider the future the way Google does. If you take a long-term perspective, Google’s Enhanced Campaigns launch may indicate their belief that the decline in desktop search — first seen in October 2012 — is going to become an even stronger trend.

If this is the case, their move to do away with differentiation between mobile and desktop AdWords is quite logical and a well-thought-out, strategic move towards tomorrow, dragging the marketplace towards fulfilling Google’s vision, whether we are ready or not.

The change to AdWords also means Google doesn’t just see mobile as the future. It implies that from their perspective, the convergence has already happened, and we just don’t know it yet. For Google, the future is now. That’s probably the most important strategic takeaway.

If we listen to Google trumpet the changes, we’re to believe the platform is being simplified and enhanced. On the other hand, the doomsayers would have us believe the sky is falling. Regardless of whether you like the update or not, the move to Enhanced Campaigns really is a case of more is less.

Make no mistake, AdWords had to change. Google either had to move ahead of the market, or watch another company appear and force the issue. They chose the more aggressive route.

As Larry Page’s comments in 2012 would indicate, Google’s leadership team is convinced there should — and will — be no difference in the user experience between mobile and desktop platforms in the future.

Page has also gone on the record stating that he wishes more web designers would build for mobile, as that’s the future. I believe Google’s move will force everyone to begin to move in that direction today.

Is Google right? Will desktops become as passé and obsolete as fax machines?

No one knows, but it’s absolutely clear that Google has put a stake in the ground around mobile search. Google’s Q4 earnings call was dominated by questions focused on understanding mobile Cost Per Click (CPC), which has been used as a measuring stick by which the strength of Google’s mobile strategy has been calculated.

Despite all of Google’s revenue successes, these particular numbers weren’t inspiring, and I could hear frustration in the voices of Google’s leadership team when answering the many questions about their mobile CPC numbers. Rather than answer those questions in detail, they preferred to steer commentary towards other technological advances the company has made, such as the self-driving car.

Clearly, Google doesn’t want the focus of discussion about Google to be on mobile CPC; they want us talking about the amazing things they’re doing and where they could lead.

The change in AdWords removes the distracting mobile CPC topic from the table, and makes the old discussion obsolete. The number is no longer there to discuss. But to argue that the move to the new AdWords is simply to get rid of mobile CPC as a measuring stick would be understating both the implications and the rationale.

Google is absolutely correct when it says search behavior across devices is similar. However, conversion rates have proved to be dissimilar. Google is moving toward grouping ad management for desktop and mobile platforms together, thereby forcing advertisers, by default, to pay the same rates for all devices. This goes against the economic reality of today, but perhaps not of tomorrow, where the mobile experience will be the norm.

In a utopian world, this simplicity is awesome. If user behavior — and most importantly, conversion rates — on mobile platforms and desktops were similar, everyone would welcome this. The only problem is, we don’t live in that world. People don’t pay for clicks, they pay for conversions. Smart marketers understand that clicks from different platforms and devices result in differing conversion rates, and return on investment. Lumping all types of clicks together regardless of outcome just dilutes their value.

How will this change affect Google? The new platform should be simpler to maintain, and support; so that should be an obvious benefit. It’s also built with the future in mind, so better scalability would necessarily be factored in. For people observing Google, it might be a little more difficult to judge success, as this change effectively does away with many historically comparable numbers, and none will exist until a full calendar year under the new system has passed.

The new AdWords system starts rolling out immediately, and will be fully migrated by mid-2013, which ideally means by the end of June, or the end of Q2. So assuming that Q3 is the first full quarter where all advertisers are on the new system, Q3 2014 is the first year-over-year period we will be able to measure on an apples-to-apples basis.

At this point, you’re probably wondering how will the changes affect you if you’re an advertiser? Less complicated campaign management should mean fewer campaigns to manage, which is simpler and should theoretically be less work. Beyond that, I can foresee many implications — some broad, and some tactical.

For the less sophisticated advertiser, this update is a simplification, therefore less to worry about. But advertisers who manage highly effective, fine-tuned campaigns to maximize ROI will need to start over from scratch. Unfortunately, this change also means there are fewer insights to draw from in campaign testing that allow you to learn about and understand your client better.

For example, small advertisers who have a low, fixed monthly budget will see that budget used up more quickly than before. With the bids being set uniformly by default — and most people not knowing or understanding how to make adjustments for the mobile channel — advertisers will pay more for fewer clicks from mobile. This issue will be exacerbated because by default, all advertisers will automatically — and often unwittingly — become mobile advertisers, thus increasing competition for mobile’s highly limited ad-display space.

Previously, you could manage ad campaigns for desktop and mobile devices separately. You could also target by operating system and other factors depending on your level of sophistication. This still-live AdWords support page tells you all about the benefits:

People use mobile devices differently than desktop computers, so it probably won’t surprise you that people also interact differently with ads on mobile devices than those on desktop computers. Setting up a separate mobile ad campaign helps ensure that your ads can be as effective as possible.

Going forward, this will not be the case.

If you’re a more sophisticated advertiser running large global campaigns, the changes might be overwhelming. Some advertisers, like Intel, were looking at mobile as being more of a branding channel, and less about conversions. For these, I expect the changes will affect the personae they have developed over time based on iterative campaign data.

For example, Intel has a marketing persona representing the trendy mobile user that it created to represent and speak to millennials. From a strictly traditional PPC perspective, it is challenging to target a campaign at the persona level, unless you can have granular control across content, video, social, and paid channels.

In the area of persona marketing, the keyword triggers are just keywords; it’s the platforms and devices that really help advertisers segment and target most effectively. With the changes to AdWords, one of these channels just became much more difficult to use.

In the case of the millennial generation, mobile is the most common means of connecting to the web. The most effective way for advertisers to generate the budgets to target these audiences is to track their behavior. Advertisers will now need to adjust to the new reality that Enhanced Campaigns presents and find new and novel ways to build these relationships.

If you believe Google is correct, that in the future everyone’s Internet experience should be a mobile experience, then Wednesday’s move is absolutely brilliant. The question is: Is the market ready? Absolutely not, which is why I expect Google to backpedal lightly on some of these changes to make the transition easier.