Adobe has released a new report analyzing Google's Enhanced Campaigns from about 100 major U.S. advertisers ($100+ million ad spend). It looks at data from the past three months, and found that Google CPCs have increased by 6%, among other things.
The company notes that while CPCs typically increase during the Spring, seasonality can be ruled out as the sole drive of this trend.
"With the introduction of Enhanced Campaigns the historically lower CPCs for tablet campaigns should increase to reflect desktop CPCs," Adobe says in the report. "We’re only just beginning to see this trend materialize with a 3% increase in tablet CPCs with respect to desktop CPCs, along with a smaller 1% increase in mobile CPCs. These percentages will likely rise as advertisers holding off on migrating to Enhanced Campaigns until the July 22 deadline set by Google are forced to do so."
"One other trend we noticed is that CPCs on Google have stabilized," the report says. "For the past two years, Google CPCs fell on a year-over-year (YoY) basis due to the increase in mobile and tablet traffic where CPCs were lower. However, for the first time in 7 quarters the CPCs on Google are flat YoY and we anticipate that CPCs will rise on a YoY basis again starting next quarter. We expect this trend to positively impact Google’s ad revenue."
Adobe says that with increasing CPCs, proper mobile bid adjustments (MBAs) are more critical. The company says Google's tend not to reflect the performance of individual campaigns and a groups, and with that, Adobe announced it has updated its Media Optimizer algorithm to "ensure maximum ROI" for campaigns and "highly effective" MBAs.
"Search marketing is getting increasingly complex – and it is becoming increasingly difficult to use a manual approach to get the best possible performance from a relatively simple campaign," the company says. "Not only are there GEO specific targeting options available, there are also device level and time-of-day/day-of-week options to consider. While MBAs are Google’s attempt to simplify this for marketers, this also complicates matters for the advertiser. Not only does one have to consider the bid but also the mobile adjustment factor to get the most out of a search campaign. This only increases the need for automated algorithmic bidding platforms that resolve the complexities to manage such programs."
In the immediate future, enhanced campaigns will drive competitive pressure on tablets for this month and next month, Adobe notes, with the full effect of the change on the market coming in Q3.