Google’s permission-based marketing: Will it mean better return for every ad dollar spent?

At the recently held Google I/O developer conference, the search engine giant announced that it will be launching a new tool that will allow users to moderate what kinds of ads pop up on their screens

by Team PITCH
Published - May 19, 2022
6 minutes To Read
Google’s permission-based marketing: Will it mean better return for every ad dollar spent?

At its recently held Google I/O developer conference, the search engine giant announced that it will be launching a new tool later this year to give users around the world more control over the ads they see. As part of its new focus on user-first policies, My Ad Center will allow Google users to moderate what kinds of ads pop up on their screens. This means users can personalize their ad viewing experience and choose the brands they want to see when it comes to advertising, across YouTube, Search and the Discovery Feed. Users will also have the option to choose the amount of personalization they are comfortable with, meaning no more ad pop-ups that mirror your searches and conversations.

Given the ubiquity of Google ads, this is obviously good news for customers increasingly concerned about privacy but is far more nuanced when it comes to advertisers, whether the brands themselves, or the channels they’re advertising on.

Knowing the kind of brand content that a consumer enjoys interacting with – even if it’s disrupting their online activity - will help us create work that has the potential to be not ignored. Ultimately, leading to better memorability and engagement.”

For instance, Jigar Patel, Co-Founder and CEO of Indian beauty brand Brillare, believes these new changes in the ad policy will be a real game changer in the crowded D2C space in India.

“With the starting of permission-based marketing, users will now have control of the ad category they wish to see, providing brands with a more defined targeted audience and therefore giving a better conversion rate for every ad dollar spent. Having a more targeted audience will allow for more conscientious marketing from brands,” says Patel, adding, “The consumers would likely already have knowledge of the category that they prefer to see ads of and can easily block if the ad they see isn’t intriguing. So, it must be able to retain the customer’s attention.”

However, these advantages will come at a cost, which will be highly customized ad content to make an impression. Akshae Golekar, Co-Founder, Optiminastic Media, says the cost of advertising will now be higher. “Clearly, it was expected of a company like Google to move towards a democratic Web 3.0, as it's a step towards transparency and a cookie-free future for the internet. We're all heading there and it's the first time a platform like Google has made a decision wherein users are able to disclose their privacy details to brands they know. However, since the data is with one party, the ads will be at least 20% more expensive.”

Agreeing that ad spends will most likely be driven up, Anand Nair - Co-Founder and CCO, 4AM Worldwide, notes that Google's My Ads Center is unlikely to see a significant impact on brands and platforms in the short term.  “Advertising rates could go up for platforms in order to maintain their overall revenue.  However, since most users may not make the effort to go to My Ads Center and update their preferences, business probably will continue as usual for now,” he says, adding that we need to be mindful of the evolution of viewer empowerment.

“Platforms will increasingly provide features that give control to the viewers and brands will need to become more targeted in their approach. I see a far more significant impact in the mid to long term horizon,” he says.

Sadhvi Dhawan, Group Media Director of Blink Digital, adds that for brands, this will limit inventory options for advertising and having able to target their audience only on the basis of affinity and topic without any behavioural or demographic filter will not only make their ads inefficient for branding but will lead to much lower ROAS.

“For the publishers (website hosting ads), this might lead to an imbalance of demand & supply as for some brands/topics there could be huge demand from users while for others there could be none. This will make forecasting of their inventories further difficult affecting media planning of advertisers,” notes Dhawan, adding, “Brands with less consideration and intent as per Google policy score might face a dearth of potential reach and hence will have to wait for longer or look for alternatives to create impact on their audience and move their brand metrics.”

Siddharth Devnani, Co-Founder & Director, SoCheers, says the process of content creation for ads might see alterations at the brand level because of this, noting, "Advertisers will get the opportunity to target a very niche audience but will also have to create highly customised content for a different set of consumers. Any irrelevant content or targeting will see a drop in impressions and reach. Moreover, the users’ ability to easily block any ad will be a more concrete measure of the impact or irrelevancy of the ads content and targeting."

Panda sums it up by noting this may have drastic implications on the advertisers in the long term which can vary from negative impact on advertising effectiveness to potential loss of revenues. Brands may all of a sudden realize that the group of users they have continuously been interacting with are not interested in them or have never been interested.

“However, in the short term, it is less likely to have any kind of a negative impact, simply because adaptation to this will take time. Even today, ‘Stop Showing Me This Ad’ does not get used by many,” he concludes.