Google Enhanced Campaigns (aka Enhanced Revenue)

Is Wall Street driving the evolution of Google AdWords? Based on recent trends, that seems to be the case.

Last June, Google updated the AdWords ad rotation settings to force more advertisers to optimize to CTR. Ads that were more likely to get clicks would be shown more than others. More clicks = more cash for Google. However, clicks are not conversions. This change hurt advertiser's abilities to test and optimize their creative based on actual performance (like users buying stuff). The blowback was immediate, with Google reversing course and allowing advertisers to opt out of the new rotation settings.

Just in time for Christmas, Google converted Google Shopping to only include paid listings. Users lost the ability to view unbiased search results, advertisers lost a free traffic source that they had to spend to recoup, and Google gained $1.3 billion in new revenues.

Now, Google is launching enhanced campaigns. The "enhancement" is that advertisers are opted into mobile campaigns, have less control on what they pay per mobile and tablet click, and cannot segment between desktop and tablet campaigns. These are some major negatives. Mobile, tablet, and desktop users behave differently and mobile CPCs have been low because mobile users are much less likely to buy than desktop or tablet consumers (ever try to enter a 16 digit credit card number into your phone?).

This seems like a blatant money grab by Google. "Enhanced" campaigns will raise costs for advertisers, lower performance, and reduce control. As an added bonus, there will be substantial cost in restructuring search campaigns to conform to the new settings, technical hurdles to tracking performance, an inability to budget by device, less room to craft creative messaging by device, less effective bid management, and new requirements in website design to provide the right user experience.

This most reminds me of the monopoly days of Microsoft where they used their dominant market share to impose additional cost on users and partners. Google is now a defacto monopoly in search marketing and is behaving as such. It's sad that the FTC has bought into the argument that Google is only dominant because of their great innovation. Network effects can create monopolies, and Google is certainly behaving as a monopolist.