Mumbai: Internet search company Google Inc., which derives nearly 98% of its revenue from online advertising, is in the process of refining its search ad strategy with help from its research and development centre in Bangalore.
Google’s new Dynamic Search Ads product, launched worldwide in October, is targeted at helping advertisers by automatically generating the ad copy after scanning the content on an advertiser’s Web page. The advertiser also no longer has to select or generate keywords. Google automatically displays the ad in response to search terms it thinks are a good match.
Simultaneously, users too get more relevant ads when they perform searches, according to Nicholas Fox, vice-president of product management.
“If they search for ‘flower’, they will not only get images, locations, user reviews of florists, etc., but also relevant ads based on their keyword search. All this is dynamically generated,” Fox said in a video conference from Google’s headquarters in Mountain View, California.
He added that this strategy complemented the existing keyword campaigns.
Google claims that Dynamic Search Ads have increased conversions by almost 50% with an average cost-per-conversion that’s 73% less than traditional search ads. Bhaskar Anand, chief executive officer and managing director of online media firm MavenClickZ Media Pvt. Ltd, acknowledged that this new search strategy was “helping my clients get more bang for the buck”.
He said the ads of his clients were getting more clicks, and since Google is getting more money from them, it’s displaying the ads “more prominently”.
Marketing idea: Nicholas Fox, vice-president of product management.
Mahesh Murthy, founder of digital brand management firm Pinstorm, which has a similar product called LiveContext that does automated and live search engine advertising, says “the move (by Google) is good”.
Google rewards clients if the keyword, headline and copy of the ad are in sync with the client’s Web page, he explained. Hence, when keywords are generated dynamically (by algorithms), they typically are more accurate and increase the return on investment for clients who get more clicks, added Murthy.
Fox acknowledged the work of the Google team in Bangalore. He said the team “helped us in development of this product, which will turn search advertising on its head by reducing dependence on keyword searches”. Google has around 400 engineers in its Bangalore and Hyderabad research and development centres.
Over a billion searches take place on Google daily. Google in India gets over 26,000 queries for restaurants/cafes, over 17,000 queries for professional services such as tuitions, financial advisory and real estate broking and over 10,000 for local tour and travel services, according to a Google India spokesperson. These numbers pertain just to desktop searches.
More than 30% of queries with ads have at least one new ad format and Google consistently tweaks its ad search strategy, keeping in mind the changing form factors of devices, said Fox. For instance, 77% of mobile Internet users conduct searches on their mobile devices, according to the Mobile Movement Report published in April 2011. And more than 20% of searches on Google on a desktop are related to location. On mobile phones, it’s about 40%, according to Google internal data.
For this segment, the Internet search user has “click-to-call” ads wherein advertisers provide a calling option, which Fox claims results in higher click-through rates and increases in both calls and visits to a website.
“Now, whether your potential customers are reading the latest news, checking sports scores, or playing a downloaded game on their phones, you can reach them with relevant ads that let them easily click, call and connect with your business,” Fox said.
For videos—48 hours of video are uploaded every minute on YouTube, noted Fox—Google has “media ads” which, unlike video extensions, simply attaches a video player to existing AdWords ads. The targeting is completely automated. When someone enters a search on Google.com, algorithms determine the relevance to a movie title, after which the pertinent “media ads” are automatically displayed at the top of the search results page.
“Our research shows that when someone searches for a movie title on Google.com, they’re most commonly looking for a trailer,” said Fox. Star India Pvt. Ltd will be the first advertiser to use “media ads” in India for the launch of its new channel Life OK.
Online advertising, meanwhile, appears to be booming even in a slowing economy. Google posted a 26% rise in its third-quarter (July-September 2011) profit from a year earlier, and a 33% jump in revenue. It was the fourth straight quarter in which Google’s revenue growth accelerated year on year. Paid clicks—a measure of how frequently consumers click on its ads—too rose 28% in the third quarter compared with a year earlier.
Google, according to a November 2011 Avendus Capital Pvt. Ltd report, “continues to be the dominant force in the global search market for over 85% of overall search traffic in September 2011.” In India, Google accounted for more than 90% of the overall searches in 2010, according to Avendus, with Ask, Bing and Yahoo being the other entities.
A McKinsey and Co. study in August 2011 puts the value of search to the global economy at $780 billion in 2009. Indian “paid” search advertising was estimated to be around Rs 450 crore in 2010, accounting for around 24% of the overall online advertising market. Avendus expects paid search advertising to maintain a 25-30% share—between Rs 1,350 crore and Rs 2,100 crore—of the overall online advertising market by 2015.