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

|By:, SA News Editor

"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