Alphabet’s (GOOG, GOOGL) Google division announced a new feature last month that will allow advertisers to target users in one of the same ways they’ve been doing it on Facebook (FB) since 2012.
Advertisers can upload a list of email addresses from existing customers, loyalty members, or newsletter subscribers, for targeting across Google, GMail and YouTube. The improved targeting capabilities should help Google expand on its ad revenue, particularly on mobile, for Google stock owners.
Google stock has performed well so far this year — shares of GOOG are up nearly 20% year-to-date — but there appears to be further room for growth.
The company’s new ad targeting plans should help it improve the value of its mobile advertising and compete with Facebook for share.
Improved Targeting Means More Ad Revenue for Google Stock Owners
Ads convert a lot better when the leads seeing them have already expressed interest in the product. That’s why GOOG’s search ads are so valuable — because users have already expressed interest through their search keywords.
That data also lends itself well to the display advertisements on Google’s other web properties and its network partners, but lacks the immediate intent. Previous purchases are a much stronger signal that an ad viewer will respond positively to an ad.
That’s why Google’s new ad targeting capabilities are notable for Google stock investors.
Using emails to target users also lets advertisers target ads across web properties and devices more easily. That way advertisers can get the most out of retargeting ads. This is one big advantage of Facebook. Since users are always logged into FB when they use it, targeting those users across devices is really simple. Linking an email to an ad campaign enables similar functionality, and could result in better conversions on mobile.
What’s more, Google can use its data to enable advertisers to target “Similar Audiences” to its existing customers. Businesses can upload a list of email addresses and Google will target users that exhibit similar behaviors across its properties — they watch the same YouTube videos and have similar search histories, for example. This functionality makes it easier for GOOG advertisers to find new customers.
Taking Back Share of Mobile Display Advertising
Mobile display advertising is a bigger market and growing faster than mobile search advertising. Facebook, not Google, is dominant in mobile search advertising, taking about one-third of the market in the United States, according to eMarketer.
As more and more users access the web through mobile apps, Google stands to fall further behind. But the ability to target YouTube viewers and GMail users with an email address could help it keep pace with Facebook’s growth. GOOG owns five the of the 10 most used apps in the U.S. largely thanks to its stronghold over Android. Time spent on those apps, however, isn’t particularly high beyond YouTube.
But YouTube continues to grow well on mobile. In July, the company told Google stock investors that YouTube watch time on mobile doubled year over year, and the average session on mobile is now 40 minutes long.
The ability to target viewers based on their email address could turn YouTube into a profit maker for Google stock owners, and the growing time spent on YouTube could help GOOG take share from Facebook.
As of this writing, Adam Levy doesn’t hold any positions in Facebook or Google stock.
