Google is running about a month behind schedule as it shifts ads to a more converged multi-screen platform. More than six million campaigns have been upgraded to AdWords Enhanced Campaigns so far and Google expects to have the remainder of its advertising partners, and their respective campaigns, switched over by the end of this month.
CEO Larry Page calls it “the biggest ever change to AdWords,” as the company reported $3.23 billion in net income on $14.1 billion in revenue during the second quarter. Digital advertising has developed with specific features tailored for desktop and mobile, Page says on the earnings call with investors. “This made arduous work for advertisers and agencies and meant mobile opportunities often got missed,” he adds.
“I think it’s important to keep in mind that Enhanced Campaigns are the largest change we’ve made in AdWords ever, and it was done pretty quickly…We changed tremendous amounts in how our teams operate, how our advertisers operate, how everyone buys those ads, what the users see, and we’ve done it pretty well,” he continues later in the call.
Nikesh Arora, SVP and chief business officer at Google, shares Page’s enthusiasm for the “big, long-term bet that is designed to help advertisers more easily reach customers across devices with the right message, all within one campaign.” He adds that Pizza Hut has seen its return on investment from mobile increase by 20 percent.
“They found that mobile click-through rate has increased by more than 60 percent while that cost per order on smartphones has dropped by 17 percent. We believe Enhanced Campaigns does set up our clients and our business really well for the long-term and the move towards a constantly connected world goes far beyond just direct response and transactional marketing,” Arora continues.
“As many advertisers have discovered that they were not addressing the mobile opportunity appropriately, they discovered new inventory, they discovered better ROI, and better conversion,” he says. “As we get better in terms of being able to provide more targeting and more comprehensive ad solutions for mobility and across all screens, the ROI should continue to improve. We believe mobility provides more context to advertisers in terms of where the users are and where they’ve been, which will allow for more accurate advertising.”
Google’s revenues jumped 19 percent from the year-ago period as income grew almost 14 percent to $3.23 billion. Net income was slightly down, however, from the previous quarter’s $3.35 billion in profit. Motorola Mobile accounted for $998 million in revenue, holding steady from the previous year as a 7 percent contributor to Google’s total quarterly revenue. Meanwhile, the weight and financial burden of Motorola Mobile on Google’s books is growing. The unit’s total loss jumped from $199 million a year ago to a $342 million bleed in the most recent quarter.
Paid clicks jumped 23 percent from a year ago and 4 percent from the previous quarter, while the average cost-per-click declined by 6 percent year-over-year and 2 percent from the previous quarter. Google ended the quarter with $54.4 billion in cash and 44,777 full-time employees.