Enhancements to Google's Ad Offerings: Ad Models
A look at Google's new ad formats and pricing models and what they mean for marketers. Second in a two-part series.
A look at Google's new ad formats and pricing models and what they mean for marketers. Second in a two-part series.
Last time, my column discussed enhancements to Google’s ad targeting options. This week, let’s examine changes to Google’s ad formats and pricing models – and what they mean for marketers.
Ad Models
What it had before:
Historically, Google has only offered one form of ad pricing or buying model – CPC (cost per click). While CPM (define) pricing was made available on placements within the Content Network, this was the closest Google got to veering from its tried-and-true CPC (define) pricing model.
What it has now:
The CPC pricing model is not going away, but some new models built for key online industries have emerged. Two are currently in limited beta release:
What it means:
For retailers, these two new innovations will no doubt reduce wasted clicks and increase the return from their paid search investment. Buying on a CPA (define) or CPL basis is desirable, as advertisers will only pay when the audience takes the desired action. Richer ad experiences are also likely to result in supplemental benefits surrounding brand awareness, brand affinity, and offline purchase intent. Even though advertisers are paying only when someone converts, they benefit just by getting their brand/message in front of their audience.
Ad Extensions
What it had before:
Google’s standard paid search ad is pretty recognizable, but just to level-set, it consists of the following elements:
Example:
What it has now:
There are many new “extensions” that you can add to your current Google ads to make them more relevant and compelling for your audience. For brevity, I’ll simply indicate the “addition” portion of the ad that is now present in addition to the regular copy/text:
What it means:
These extensions stand to substantially increase click-through rates and user engagement levels. Advertisers will now have more flexibility to include relevant non-text elements as images or video, location information, or additional site links. This will likely benefit the user as well as the ads. How? Ads will become more relevant and serve up information without requiring users to click into the website. As these ads are charged in the traditional Google way – CPC – advertisers are getting more real estate and better pre-click exposure for the same price. That said, as these ads are taking up more real estate on the page, competition may become more fierce for “above the fold” positioning, which could inevitably drive up CPCs. Regardless, this offering is definitely something advertisers should test to determine if they deliver enhanced ROI (define).