Google's Search Ads Still Work. The Question is, How Well and For How Long?

Plus a Comcast executive on why TV companies and advertisers just don't get it

Conversational search, AI, ChatGPT - all of these forces are supposedly converging to seriously disrupt Google’s search advertising money-minting machine.

Yet so far, so good, based on recent Google earnings and various analyst reports. In fact, conversational searches may yield a whole new level of commercial opportunities for brands, per Dan Taylor, Vice President, Global Ads at Google.

That doesn’t mean things are business as usual - as advertisers, and Google, may have to learn how to translate, and re-value, search ads that are delivered to consumers before they exactly know what they are looking for - while settling for less of that ‘I want this thing right now’ bottom-of-the-funnel gold.

“When someone enters AI mode and AI overviews, [an ad for] a product or service might not be the thing that they’re looking for,” Taylor told me on this week’s Next in Media podcast. “But because of the overviews and AI mode, there are opportunities to introduce ads earlier. That’s the main thing that we’ve been focusing on is [answering the question] ‘when is it additive?’ ‘When is it helpful [to surface an ad]?’ Because it can be pretty off putting if you’re going for information and a bunch of products get thrown at you in this experience.”

Taylor used an example of recent searches he and his family have conducted in real life, focused on seeking ideas for furnishing a small New York apartment (rather than say, “best cheap coffee table.” Those queries might lend themselves to paint brands, or a Wayfair, or a storage company.

It’s these new marketing search moments that carry a lot of potential, but require a new way of operating (and measuring) search ads.

“We’re not assuming it’s going to be all the same plays that will work in these new environments,” said Taylor. “The average length of a search query in AI mode is like two to three times longer than what you’d see in a traditional query.

“AI in search has been expansionary for Google. People are coming to Google earlier in their discovery journey than ever. They’re asking kind of these broader questions. They’re not searching like a search engine marketer would with very specific things that they’re looking for. And this is a new opportunity to introduce consumers to products and services, they may not even know that they should be asking for.”

“I think this is the aha moment for many of our advertisers,” he said.

This kind of “mid-funnel” search is very reminiscent of how Pinterest touted its ‘just gathering ideas’ user behavior in its early days. The challenge then - and now - is the mid-funnel search ads may not convert as well, and may be in demand for a broader list of ad bidders. Or they may be less competitive to buy. It depends.

In the case of Pinterest early on, it wasn’t always easy to figure out where “mid funnel’ budgets might come from, and whether they will perform as well from an ROI-perspective. That said, Google and others have made major strides in AI-driven media buying and optimization since then.

It remains to be seen as to how well Google’s search interest adapts in real time. This week’s earnings should be revealing. UPDATE: SEARCH ADS CRUSHED IT.

In the meantime, it seems fair to ask Taylor, was Google too slow or cautious with AI search?

“We’ve been on an AI journey for 10 years,” he said. “And it’s core to everything we do from search to maps to ads, right? If you think about Google Maps being able to tell you how to take a different driving directions to get around traffic. AI’s in there. But I think the generative AI piece in particular, we see that it has the potential to change the world. We’re excited by that.”

“I was reflecting, back in 2018 [when Google put out its core AI principles. We want to be bold, but we also want to be responsible with five trillion searches every year. This requires us to be helpful and get it right. It takes a long time to build trust and only a moment to lose it.”

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I’m participating in a webinar on Wednesday at 1pm ET. My friends and I from Kochava and Samba will be talking about all things targeting, identity and performance in CTV. Be sure to check out: Beyond Fragmented Signals: Unifying Linear TV + CTV for Cross-Platform ROI. Check it out!

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Comcast ‘Blasphemy’

If the television industry truly wants to expand its advertiser pie (a la the platforms like Meta and Google), all it needs to do is completely rethink its core philosophies, stop being so precious and “emotional” about ad creative, and basically accept being second best.

If big media companies can do all that, there’s a multi-billion dollar business to be had - or at least - that was the general perspective of Comcast exec James Borow, vp of product and engineering, Universal Ads.

During a fireside chat at Marketecture Live on Monday, Borow shared some of what he jokingly referred to as “blasphemous” thinking on TV ads, amidst the industry’s quest to bring on millions of DTC brands and SMB advertisers. What was striking was how different Borow’s point of view on TV advertising is - he’s a former Snap product guy who has spent a lot of time building the Universal Ads platform while hearing the concerns of - and approach to marketing - for smaller, non-typical TV advertisers which have built their businesses on social platforms.

Among the highlights from Borow’s comments:

• Most new TV advertisers “are incredibly economically rational,” -meaning they’ll spend more with whatever works - yet not ad tech savvy at all.

• That means they are not used to ad tech fees - in fact, the idea of paying more to reach more advanced audiences is completely foreign to them. “We would never charge more for better targeting in social” he said. “This is definitely a different approach than they are used to.”

The TV ad world, as well as a slew of tech startups, has been very bullish on this theory that the combination of emerging ad tech and AI promise to open up a whole new flood of ad dollars for television. Yet there are not a lot of signs that this flood has arrived, per analysts.

One thing that is in TV’s favor, per Borow, is that “the walled gardens overplayed their hands.” Not only are many advertisers running out of room on platforms like Instagram, there is growing mistrust in these platform’s self-reported data, he argued, which tend to over credit themselves on measures like sales.

Advertisers are realizing that “when you add up all the conversions in all the different platforms, it’s like 5x the actual sales,” he said. Therefore, “There is no trust in first party measurement.”

So TV, which is accustomed to working with third party measurement companies, should be seen as an attractive vehicle for these advertisers to generate demand and find new reach. But there’s a catch.

For starters, many newer brands are focused on social-first ad strategies, where they they are accustomed to pumping out tons of creative executions and refining campaigns based on what works and what doesn’t.

TV is still the land of million dollar hero ads. That has to change, per Borow, which requires a major mindset shift. TV advertisers are too “emotional” about creative, and need to let go -starting by repurposing social ads for TV, not the other way around.

“There is no reason TV should be treated differently,” he said. In fact, for a new generation “TV is the new second screen.”

Ouch.

“None of these clickable TV ads work,” he added. “People are going to shop on their phones.”