- Google is targeting Facebook ad budgets with a new ad format called Discovery.
- The ads look like social posts and are designed to catch people while they’re scrolling.
- Two performance-based ad agencies said they’ve tested the format and expect to include them on more budgets in 2020.
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Google wants a piece of Facebook’s ad revenue with its new social ad formats.
Google in May announced a new ad format called Discovery Ads that look like social posts on Facebook, Instagram and Pinterest. Since then, two performance-based agencies that are heavy buyers of Google ads told Business Insider that they’ve tested campaigns and expect to include the format on more client budgets in 2020.
Discovery Ads appear as a photo or carousel posts and are designed for users to scroll past like social media ads. Discovery Ads appear in Discover, the feed section of Google’s mobile website and app, on YouTube’s homepage and in Gmail.
Google is hunting for new places for ads
Discovery Ads are one way Google is trying to grow advertising beyond its core search business. Google does not break out its revenue by channel, but in 2018, Google reported $136.8 billion in revenue.
A spokesperson for Google said Discovery Ads are still in beta and declined to say how many advertisers are using the ad format or when it will roll out more widely.
Jennifer Kent, senior director at search ad agency Merkle, said that the agency’s retail and B2B clients have used Discovery Ads. Other brands that have used Discovery Ads include outdoor gear brand Mammut and Uber, according to social posts and the blog Android Police.
Like Google search ads, Discovery Ads are priced on a cost-per-click model. Kent said in initial tests, Discovery Ads have 70% lower cost-per-click prices than the agency’s search campaigns, including non-branded and shopping campaigns, suggesting that advertisers are reaching big audiences cheaply and without a lot of competition from other advertisers.
Discovery ad formats also have outperformed standard search formats when it comes to click-through rates, she said.
Discovery Ads can be targeted to people who seem to be in the market to buy something or have taken an action like watching a video or going to a website. Google’s targeting also includes interest, habits or demographic data.
Kent said that demand for the Discovery Ads has increased more in the past few months and that the agency is recommending it as a part of some clients’ 2020 budgets. So far budgets for Discovery Ads are coming from clients’ search budgets but she said that she expects for budgets to eventually come from budgets like Facebook.
“As we continue to gather data on it and see performance trends, I won’t be surprised to see the opportunity to pull investment from paid social and display,” she said.
Google is pushing technology that finds the right placement for advertisers
Discovery uses Google tech to find the best platform and time for ads to run, similar to Google’s tech called Smart Campaigns that use machine learning to help advertisers find the right platform, creative and goal for advertisers. The tool is also similar to Facebook’s automatic placements that analyzes its properties to find the best spot for ads to run.
Pat Hayden, VP of search at ad agency Tinuiti, said that Discovery is the latest indication that advertisers are increasingly using Google for ad targeting. It can take Google up to a month to kick in and start targeting the right people, which could spook performance-heavy clients, though, he said.
Tinuiti has tested Discovery ads with clients focused on acquiring subscriptions and e-commerce companies, he said.
“It takes some time for the system to learn so I think advertisers could be potentially turned off early on — it takes some time for it to hit its stride,” he said.