Google Talks Future of Search Advertising

    August 12, 2009
    Chris Crum

Google AdWords Business Product Management Director Nicholas Fox gave a keynote speech at Search Engine Strategies. He talked about where the search industry is going, and where it’s been.

On the history of AdWords, he says Google quickly realized that banner ads didn’t make sense with search, sow they tried the text ad, and it has worked pretty well. Google is now running over a billion text ad auctions a day.

Fox says there are about 100 billion pages on the web, 500 billion images on the web, and 20 hours of video uploaded every minute. After mentioning the bid simulator, which we covered recently, he said that search advertising is really still about three things:

1. Keywords
2. Text Ads
3. Cost per click

The next search revolution is beginning though according to Fox. He notes that innovation is coming from all kinds of places, and to users it means better quality and relevant ads. For advertisers, it means better results, he says.

According to Fox, it’s going beyond keywords, and Google is looking at all kinds of ways to make search better. The company is looking at matching information about your product or service and automatically building ads based on crawling your website.

Nick FoxFollowing is a Q&A session with Fox from the keynote (text may not be verbatim):

Q: How do you referee between 2 advertisers going after the same chunk of meat?

A: We try to be as objective as possible. We determine a conversion rate combined with a bid to result certain ads first.

Q: Is the wave going to present pay per click opportunities?

A: I don’t know. Sydney engineers developed this, they thought big… later we will see whether advertising makes sense. No plans now.

Q: Why is CPA more advanced on display ads rather than search

A: Search has much more known value on search vs. display. Advertisers demand cpa deals on display more than on search. I see this moving to search as well.

Q: What is the future of search and image recognition?

A: The is a similar image feature on Google image search now. This is an area Google will continue to invest in. There are incredible opportunities to bring this to advertisers as well.

Q: I there an advantage for ads with generic words?

A: It depends on whether it is the same advertiser or two different advertisers. If they are similar the highest quality will rank higher.

Q: What are the biggest mistakes and please comment on mobile search?

A:  We would have liked to have more quickly experimented on ad creativity, sizes, etc….

The emergence of more sophisticated phones has been the biggest change to mobile search. It is clearer how search and advertising can move to mobile devices.

Q: Where are the largest volumes happening on mobile search?

A: There is a lot of volume in Japan and the US. We see a lot of local search and product search. We also see a lot of porn on mobile devices.

Q: What could replace keywords?

A: Here is my product catalog, descriptions of products. The keyword was great 5 years ago but the closer we can get to what the advertiser is selling the better.

Q: I have never seen Google analytics higher than AdWords?

A: I will have to look at this further … they should be the same, but we are working on it.

Q: Are there plans to integrate AdWords and analytics?

A: I want to be careful not to pre-announce features. However, we are working on features with this in mind. Nothing has been announced yet.

Q: When will the CPA be as regulated in terms of price as the CPC? Why is cost per click locked in and CPA more varied in terms of price?

A: It comes down to inaccurate estimates of your conversion rate.