Google’s recent announcement to allow users more control over the content they see in advertisements is unlikely to find as many takers. According to tech and marketing analysts, rolling out a feature for users is vastly different from getting them to actually make use of it. They also feel that users generally do not make an effort to figure out the kind of content they would prefer to see in ads.
“The real adoption of many such features tends to be on the lower side,” said Sanchit Vir Gogia, chief analyst, founder and CEO, Greyhound Research. “How many customers will even end up using this feature will depend on how aggressively Google decides to champion and educate them,” he added.
Google’s primary source of revenue is advertising, but it seems it’s making a marked shift towards the subscription/pay model with its latest announcement of customising ads. It very akin to its other offerings like the ad-free YouTube Premium and YouTube Music subscriptions, Google TV (TV shows and movies on rent or for purchase), paid versions of Google Drive, etc. But it remains doubtful if this feature would work.
“One must see this move by Google as its attempt to move away from the advertising business,” Gogia says. “In many ways, it is looking to build an ecosystem similar to Apple that packages services, content and other offerings,” he adds.
This may be a futuristic view at best because revenues for Google may continue to remain ad-driven for some time. “Worldover, subscription-driven revenue models have not delivered large numbers,” Naresh Gupta, co-founder and chief strategy officer, Bang in the Middle, said. According to him, what one may see eventually is a hike in ad rates and more expensive keyword-driven advertising.
While the risks and uncertainties are there, it’s not that the new move does not have its advantages. The only issue is that the risks seem to outweigh the positives at this stage, according to analysts.
“Firstly, ad personalisation isn’t really a bad thing. There are examples where personalised ads have helped consumers discover products, services and brands that they may not be aware of,” says Gogia. This may particularly be true in the case of new-age, direct-to-consumer (D2C) brands, who may not possess the scale to advertise offline. “Having said that, there are instances where ad companies have turned invasive in terms of using consumers’ data for targeting. This announcement may attempt to solve this issue,” Gogia adds.
The possibility of ad frauds may decrease, with “users actively not seeking ads from certain categories”, and thus not falling prey to clickbait with reference to links that are phishing-driven, according to Gupta, for instance. In particular, advertising categories like gaming, crypto and investments — all almost unrestricted currently and which use a very wide targeting pool — will have to rethink.
The pressure on mobile ad inventories and re-targeting could increase. “The move could end re-targeting and lookalike marketing,” says business strategist Lloyd Mathias. “Cost-per-impression (CPI)-based buying will transition to cost-per-click/ engagement-based buying. Customer relationship management (CRM) will be fully integrated into marketing,” he said.
“The hybrid play of advertising, subscription and freemium models will continue. What the sweet spot between advertising and subscription revenues will be, only time will tell,” Ashok Lalla, independent digital business advisor, said.
At its recent I/O developer conference, Google declared that the rollout of this new tool may happen by the second half of 2022, across Google Search, YouTube and Discover feed in the Google app. It will allow users to choose from a three-dot menu next to any ad, and select which brands and topics they get to see within ads.
Google had, sometime back, also stated it will phase out third-party cookies by late 2023, replacing it with new tracking technology, throwing the ad world in a tizzy. These moves come on the heels of various global crackdowns by regulators on Big Tech companies, concerning data privacy.