Google's Got A Problem. Search Ads Aren't Just For Search Engines ...

The juggernaut that is search advertising grew so popular and lucrative because it offered?businesses the ability to reach and persuade people with true purchase intent. But now keyword targeting is available on Twitter and Facebook, which could loosen Google?s stranglehold on ads that convince us what to buy.

Demand Generation Vs Fulfillment

A solid model for understanding web advertising is the purchase-intent funnel. At the wide top of the funnel is demand generation ? raising awareness about a product and engendering the brand to the consumer. Demand generation is more about ad views and changing your perceptions than clicks and driving immediate action. Imagine banner ads for Coca-Cola, Facebook sidebar ads for a movie coming to theaters next month, or a Twitter Promoted Tweet about Clorox bleach. They?re designed to keep those brands stuck in your mind so you pay them later, and they?re targeted based on your demographic and interests.

At the narrow bottom of the funnel is demand fulfillment ? convincing someone ready to make a purchase of what specifically they should buy. These ads typically seek a click through to a purchase page or sign-up form. Imagine searching for ?Buy camera? on Google and seeing sponsored results for Best Buy?s website and specific Canon camera models that you can click through to purchase. Or searching ?San Francisco lawyer? and seeing ads for specific local firms you could click through to book an appointment. They?re designed to attract the final click before you purchase, but to do that they need to know you?re actually in the mood to buy something. Since they directly inspire purchases and are more easily tied to return on investment, these ads can command high prices.

Until recently, Facebook and Twitter were stuck in the demand generation part of the funnel. With all their biographical and interest data, they were good for brand and institutional advertising but not at delivering dollars directly into advertisers? hands. Google has long ruled demand fulfillment with its AdWords product that lets advertisers compete in auctions to show their ads to people who?ve searched for specific keywords that demonstrate purchase intent. But those dividing lines are rapidly blurring, and it could shift the axis of power in online advertising.

Mining The Bottom Of The Funnel

Twitter and Facebook are now aggressively trying to drill down the funnel into demand fulfillment, and they have the data they need to succeed. They might not have traditional web search engine queries, but they have plenty of internal searches and a near infinite amount of chatter.

Intentful Tweets

Twitter last week announced the launch of keyword advertising, which lets businesses target ads to people who recently tweeted or engaged with tweets containing certain keywords. Tweet about a band and you might see ads for an upcoming concert by them. Retweet someone saying they haven?t been to the dentist in forever, and you might see ads for nearby dentists.

Searching for and tweeting a word are two very different things, but Twitter keyword ads are certainly much closer to purchase intent than targeting based on who you follow. And with some savvy multi-keyword targeting, for example ?[Product name]? and ?want?, businesses could deduce purchase intent out of 140 characters.

Social Invading From All Sides

Facebook meanwhile currently offers ?search typeahead ads?. When you search for a specific Facebook Page or app, businesses can set up ads to to show their own Pages or apps above or just below the organic results. If you?re searching for ?Candy Crush Saga?, you almost surely want to play a puzzle game. Search typeahead ads for other puzzle games at the moment could be very effective. Gadgets, games, professional services and more brands can all take advantage of this signal of purchase intent.

And that?s just the beginning for Facebook. Last week it revealed its first ads within its new Graph Search feature. For now, these ads can?t be targeted by keywords, just the standard biographical targeting. But it?s very likely that keyword targeting is on the way.

Along with creating big advertising opportunities for online conversion businesses, they could be with local businesses. Facebook is making a big push right now to challenge Yelp as the place you find a business? address, open hours, photos, reviews, and recommendations. Just yesterday Facebook redesigned its mobile Pages for businesses to highlight this info. That shift in focus means people looking for Facebook business Pages aren?t just trying to see their news feed updates. They?re trying to find out how to get there because they want their service right now ? aka purchase intent.

Now imagine if you query Facebook?s Nearby local business browser or Graph Search for nearby Italian restaurants. Graph Search keyword ads could let an Italian restaurant show up more prominently in results, even if Facebook?s quality and relevance algorithms didn?t peg it as the best.

Then there?s Facebook Exchange. These are real-time bid, cookie-retargeted ads based on what websites you?ve visited. For example, you might see an FBX ad for a flight to Hawaii you looked at but didn?t pull the trigger on. While retargeting is in a whole different category than search keyword ads, they have the same ability to reach people who are deciding where to spend their money. And in the past, Facebook has tested sidebar ads related to the keywords you post in status updates. Facebook is trying everything it can to get to the juicy bottom of the funnel.

Fragmented Budgets

Many businesses keep essentially separate ad budgets for search, display, and retargeting. Until recently, Twitter and Facebook were only tapping the display budgets. But now they?re smashing open the other piggy banks. Businesses aren?t likely to suddenly expand the total amount of the spend on online advertising, even as the market steadily grows. Instead they experiment a bit at first with some spend borrowed from what?s usually devoted to Google, and if the ads work, they?ll cleave that Google budget and divvy it up among the newfound channels.

That is not what Google wants.

Search ad money is what funds its moonshots and sustains its enormous engineering staff for free products like Chrome. Despite Google?s legacy, Twitter and Facebook have formulated advantages. Twitter?s relatively un-ad-cluttered interface keeps people?s guards down which likely contributes to the reportedly high click-through rates on its ads. And Facebook has the might of the social graph to throw in the ring. Sticking the face of a friend who Likes Canon cameras on an ad for Canon cameras shown when you search for ?Cameras? or ?Nikon? could persuade you to click the ad, when on Google you?d ignore it. Plus there?s Amazon. The traffic to the ecommerce leader comes with implicit purchase intent, and whose shopping history data helps it target ads on-site as well as in its burgeoning off-site and mobile app ad network.

Now, Google is still the heavyweight of purchase-intent web ads. That?s not going to change overnight. But the Lilliputians have finally developed the technology to drag down the search giant?s revenues and claim some of those ad dollars for their own.

[Image Credits: Bryce Durbin for TechCrunch, John Swift / Inyamuakut / WebBooks]

Source: http://techcrunch.com/2013/04/24/how-the-search-giant-could-fall/

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