Google just rolled out its biggest move yet to steal ad budgets from Facebook and Pinterest, and says its new ads can reach up to 1 billion eyeballs a month

Business Insider | May 15, 2019, 01.35AM IST

Prabhakar Raghavan


Prabhakar Raghavan, Google's SVP of advertising and commerce

  • Google announced an ad format called Discovery Ads at its annual Google Marketing Live event that allows marketers to run ads across YouTube, Gmail and Discover, a social-like feature on its home page.
  • Discover is Google's effort to attract advertisers from Facebook, Pinterest, and Twitter that use feed-based photos and visuals to sell products.
  • According to ad agency iProspect, Google's new ad format will not immediately chip into social budgets.
  • Advertisers also cautioned that Google is using its own data to target ads, which is undergoing privacy changes through new controls within Chrome.
  • Visit Business Insider's homepage for more stories.

Google is coming for the ad businesses of social platforms.

The search giant is rolling out a format called Discovery Ads that marketers can use to run ads across YouTube, Gmail and Discover, a social feed section prominent on the home page of Google's mobile website and apps. Google said that Discovery Ads reach up to one billion monthly active users in some of Google's most popular products.

In theory, Discover could open up significantly more inventory for ads that marketers have not previously had access to. The bulk of Google's ad business comes from text-based search ads, and its move into Discover will shift how advertisers create ads to mimic social posts that run in feeds like Facebook, Instagram and Twitter.

Part of Google's pitch is that it can handle the guesswork of knowing which platform an advertiser's ads should appear on. Once advertisers upload their creative, Google's machine-learning technology finds the right platform and audience to serve an ad.

"In a world where the consumer journey is ever changing, how can we be responsible and return their trust throughout their journey?" said Prabhakar Raghavan, Google's SVP of advertising and commerce, in a keynote talk during its annual Google Marketing Live conference. "How can we be there if we don't know where they are in their journey and how can we be useful if we don't know what they're looking for?"

Online retailer TechStyle Fashion Group (which includes brands Fabletics and ShoeDazzle) was one of the first advertisers to test Discovery ads and says that it lowered its cost-per-lead cost by 25% compared to social and search channels.

"Creative matters a lot," said Laura Joukovski, TechStyle Fashion Group's chief media officer. "We took feed ads that work on other properties and saw pretty instant success."

Read more: 'That would look like 70% of traffic is gone': Here are the winners and losers of Google's plans to add privacy tools to Chrome

Google's data is powerful but advertisers are wary of its strength

According to Jeremy Hull, VP of innovation at iProspect, Discovery Ads signals that Google is stepping up its charge for social and native budgets from Facebook, Pinterest and Twitter.

While Google Discover ads look like social posts, Hull said he expects them to perform like native posts. Engagement with social ads is typically low because users scroll quickly through feeds, whereas native ads are more prominent within an article or a piece of content.

"Pulling budget from social and native plays is absolutely Google's goal with the introduction of this ad," he said. "Realistically, the initial tests will come from search budgets because of how budgets are aligned and how planning seasons work for clients."

In the long-term, he said that advertisers could start shifting social budgets to Google.

Google's browsing and targeting data could be a game-changer for social ads but advertisers should also be cautious of the tech giant, Hull said. He also said that it's not clear how much inventory will be available to advertisers within Discover because Google is trying to balance user experiences with ads.

At the same time, Google is implementing new controls within Chrome that will cut down on how advertisers use third-party cookies.

"It is a large amount of space but it's a finite amount of space - when advertisers are competing for the same eyeballs, it's going to be interesting to see exactly how much volume they can get," he said. "There's going to be a little bit of trusting Google to use that information that users have shared to target with relevant ads."

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