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August 09, 2011

Adwords Express vs. Human-Managed PPC Campaigns: Man against Machine

August 09, 2011

Google has recently announced AdWords Express, an improved version of their Boost service, which launched last fall to a fair amount of Internet speculation and digital handwringing. Adwords Express is a simplified, local version of Google’s $20b/year advertising platform, which aims to help smaller businesses stand out in the midst of large competitors. It does this by injecting Google Places with marketing steroids, so that relevant ads appear on Google Maps searches, above or around the actual search results.

The service comes shortly after Groupon turned down an offer from Google and bears lots of the framework of Groupon Now, a recently launched mobile-centric, location-based deal finder. Adwords Express looks to have pulled the worlds of PPC, mobile search and local advertising into a multifaceted service designed to market local businesses to people on the go.

Existing PPC customers want to know: how will Google’s new service affect the industry as a whole? Will it revolutionize the Internet marketing, or fade into oblivion a la Google Wave? The adoption rate of Google Boost by small businesses had little to no effect on PPC managers since it was introduced six months ago.  Will this expansion of the tool make PPC managers obsolete or effect our business?

The answer to the first question—“Will it revolutionize internet marketing?”—is, “Maybe: by bringing in a larger crowd into the game.”

The potential for Adwords Express to be a hit is certainly there. Recent shifts towards a more web-centric approach to generating revenue and running business operations play right into Google’s hands—from innovations in cloud computing and mobile-web that will increase demographic exposure to online marketing, to the enhanced necessity of  local advertising. The service benefits from ease of use, so that small business owners with limited Internet savvy can still sign up, create an ad and have it on Google within five minutes. The ad itself is featured in a prime position above the Places search results and gets a blue place marker, designed to stand out from the standard red. All this will run interested parties at least $50/month, an attractive alternative to human-run PPC campaigns.

The ease of use is the source of Adwords’ greatest strength and greatest weakness. All the user has to do is provide one sentence of copy about their business and submit it to Adwords Express. However, the user has very little control of the service beyond that. This limited control leaves the business owner completely at the mercy of Google’s automated hypotheses about what will be good for their business, based on search terms that it deems relevant. These relevant search terms mean that a business will only show up when associative words are plugged into the search bar, diminishing Adwords’ effectiveness overall.

What does it mean for existing PPC management services?  Should PPC managers be concerned about Adwords Express?  Will it affect the level of demand for their services?  Is this a John Henry vs. the Steam-Powered Hammer type of scenario?

The simple answer to these questions is, “No.”   It’s more like a discounted teaser-rate inviting small businesses into the world of wily, but predictably profitable PPC campaigns.

At this point, according to Google’s blog, Boost only attracted 2,000 subscribers.  Considering that over 90% of Google’s $20B in annual revenue comes from PPC, 2,000 penny-ante accounts—representing probably only a few million in revenue—is just a drop in the bucket.  We’re glad that it provides a way for small businesses to begin experimenting with the potentials of internet marketing, but we’re not particularly nervous about Adwords Express as a competitive service.

Adwords Express provides an easy, low-cost way to dip your toes into the ever-fluctuating waters of PPC, but it will be ultimately unfulfilling for users who are willing devote time and creativity to marketing efforts(and/or money). The lack of control and creativity that it offers to users will remain a serious limitation. The low price to play will likely pull in business owners interested in seizing upon the local advertising market as it exists with services like Groupon Now and other mobile marketing initiatives. Once the limitations of Adwords Express become clear, the owners impressed with the potential but seeking more control will probably hand over their operations to a more seasoned PPC manager.

As with Google Boost, this new feature will likely only make the PPC pie bigger, by bringing in new blood.

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