Google has sent emails to select advertising customers telling them that the search giant will manage their campaigns unless they choose to opt out by Feb. 4.
The move touts "expert knowledge" and support from campaign experts, but digital marketing firms say the forced opt-in to accounts is worrisome to say the least. Google also added a disclaimer noting that customers should monitor their accounts and that their management may not improve results.
Google's email was first noted by Aaron Levy, director of paid search at Elite SEM, in a tweet and the story was picked up on Search Engine Land. Google told Search Engine Land that the changes were part of a pilot.
ZDNet has reached out to Google for comment and will update when we get it.
Here's the email:
The thread with Levy's tweet is worth a read too.
Tim Daly, CEO of digital marketing firm Vincodo, said the Google email was cause for concern.
Daly wrote in an email:
Marketers said no to their latest round on automation and Google's actions acknowledged that they clearly didn't get the acceptance rates they hoped. Now they turn to forced acceptance by targeting undermanaged Ad Accounts and taking control of the bidding to force up CPCs on all advertisers...
As an agency, Google's actions do seem like a competitive cannon shot to provide managed services. But I think all agencies can rest easy, as we've all see their work product on those so called 800,000 optimized accounts and we've all had the opportunity to receive "campaign expert" recommendations which never much more than sales pitches for user acceptance on new functionalities to earn personal bonuses.
The actions here by Google are painfully obvious…they are trying to pressure up CPCs while delivering nothing to advertisers in return other than lower ROI.
Google also happens to report its fourth quarter earnings on Feb. 4 and while Wall Street analysts are upbeat most of them expect cost per click metrics to be challenging at best. In the third quarter, Google said cost per click on Google properties fell 28 percent from a year ago, but paid clicks increased.
Meanwhile, Google could be impacted by a slowdown in the broader economy and a downturn in online ad spending overall. Evercore ISI analyst Anthony DiClemente said in a research note:
Search ad budgets likely the last of ad categories to see a pullback in a softer economic backdrop. However, if consumer spending slows, ROI growth becomes challenged, reducing search ad budgets. And that pullback in high margin dollars would weigh on EBIT/EPS.
Wall Street is expecting Alphabet, parent of Google, to report fourth quarter earnings of $10.86 a share on net revenue of $31.3 billion. Gross profit margins in the fourth quarter are estimated to be 53.73 percent, down from 55.86 percent a year ago.
With Google representing one half of what is essentially a digital advertising duopoly with Facebook rest assured that the company will further tweak its model to preserve margins. What's unclear is whether giving customers a 7 day heads up about adding them to a managed service is good for business in the long run. If these changes were applied to large enterprise accounts, agencies and ad platforms, there's a good case to be made that more ad dollars flow to Google without more transparency.