Seeking Alpha

Ad prices in focus for Google's Q3; social ads on the way

  • "Expectations around Google's (GOOG) 3Q results are lower than typical," says Deutsche's Ross Sandler. The transition to Enhanced Campaigns (creates integrated PC/mobile campaigns) search ad platform is expected to pressure ad prices and clicks over the near-term. Nonetheless, Sandler sees strong international numbers allowing Google to beat estimates when it reports next Thursday.
  • If RKG's ad price data is a sign of a broader trend, then mobile may have taken a toll on Q3. The ad agency reports the average price paid by its clients for Google smartphone search ads tumbled in Q3 to just 30%-40% of PC levels, thanks to the launch of Enhanced Campaigns. However, tablet and PC ad prices remain roughly even.
  • Canaccord thinks Q3 results could be affected both by Enhanced Campaigns and rising traffic acquisition costs. On the other hand, it's pleased comScore data points to additional traffic share gains.
  • Meanwhile, Google has updated its Terms of Service to give it the ability to include a user's name and photo in social ads. Taking a page from Facebook's Sponsored Stories, the search giant is looking to show ads for products that have been recommended by a user (via the +1 button) to the user's "friends."
  • Earlier: Google roundup
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