Google announced that they will be offering $340 million in ad credits for small and medium sized businesses (SMBs) as part of their $800 million COVID-19 stimulus package.
We’re committing $800M+ in new #COVID19 response efforts, incl $340M in @GoogleAds credits for SMBs worldwide, $250M in ad grants for @WHO & 100+ govt orgs globally, a $200M investment fund for NGOs & banks to help small businesses access capital, and more https://t.co/oVj6MMs9Bl— Sundar Pichai (@sundarpichai) March 27, 2020
Google’s not the first tech giant to pledge funds for coronavirus relief. Facebook announced its $100 million grant for small businesses to assist with regular expenses as well as Facebook ad credits.
Which Businesses Will Receive Ad Credits?
Google announced that $340 million in ad credits will be “available to all SMBs with active accounts over the past year.” SMBs “will see a credit notification appear in their Google Ads account in the coming months.” The credits will be available for use until the end of 2020.
Google’s message said the following regarding the $340 million reserved for SMBs, “We hope it will help to alleviate some of the cost of staying in touch with their customers.”
We celebrate Google doing its part to stimulate SMBs who are and will be struggling through the economic fallout from the COVID-19 outbreak. 97th Floor has already seen many advertisers pull back from their auctions, and we know Google has seen this as well. It’s clear that Google wants to retain their vulnerable business.
It’s hard to know what Google determines as an SMB. It’s likely Google will be using previous monthly ad budgets as a benchmark to determine if and how much ad credit each SMB will receive in their Google Ads account. Google has already announced that the ad credits will go to SMBs, “with active accounts over the past year.” Indicating their interest in 1) retaining customers, and 2) giving to businesses that are already bought into the ROI of Google Ads.
Where and How to Advertise Effectively
The ad credits given out by Google to SMBs aren’t only reserved for strictly search. Seasoned advertisers know that there’s more than one way to spend a buck with Google.
eCommerce SMBs will want to consider using their ad credits in Google’s Smart Shopping Campaigns. For those unfamiliar with Smart Shopping ads, they are tailored ads produced by Google based on their AI. Advertisers only need to give a campaign objective and budget, and from there Smart Shopping does the bidding and ad placements. This will be especially useful for advertisers with smaller budgets and less time to manage the campaigns.
The overall advantage of Google’s Smart Shopping functionality is the low amount of time, resources, and expertise to set up. These are a huge advantage for new advertisers, or advertisers strapped for time.
Similarly, Google Ad’s Smart Campaigns are a good way for busy advertisers to set up campaigns quickly. Many professional advertisers disagree, and claim that Smart Campaigns (the successor of AdWords Express) is a waste of advertiser’s time and money. While we agree that most enterprises spending significantly in Google don’t benefit from the easy set-up, because an experienced advertiser or agency can make more informed decisions and pivot faster than the bot running Smart Campaigns, this can be an efficient way to get campaigns running quickly for SMBs.
Display campaigns are notorious for low CPCs, but not conversions. SMBs that receive credits in their Google Ads account may be drawn to Display campaigns due to the low CPC and perceived effectiveness of that figure alone. However advertisers should want to either limit/avoid Display campaigns, or use them for remarketing. Display advertising can work well to remarket a potential customer who has already visited your site or performed an action on the site — such as visiting more than four pages or adding an item to their cart.
General awareness Display campaigns could be effective in coming months if awareness is a priority for an SMB. But if conversions are your number one immediate priority, Display should be reserved for remarketing purposes.
Use Timing to Your Advantage
97th Floor has seen many advertisers leave their auctions, and those businesses will likely return once they are given free ad credits from Google.
Because the ad credits will be available to spend throughout the remainder of 2020, this gives businesses the freedom to spend when it’s most effective for them. We recommend businesses do their best to spend gradually and make intelligent decisions based on when spending habits will return back to normal. It’s hard to say when social distance recommendations and mandates will be lifted, but if SMBs that get these ad credits use them during months of intense social distancing the funds may be wasted.
The worst thing a business can do is spend too quickly and be left with nothing when customer spending habits return to normal. Start slow, and respect your customers’ spending habits.
It may be wise for businesses to start paying attention to the cost per click and cost per conversion of specific keywords now, to see if those keyword bids spike when the ad credits are released. This would indicate that advertisers are spending more because these are gifted credits, not funds from the company themselves. Advertisers wishing to capitalize on these credits will want to watch the suggested bids for their prolific keywords, and possibly delay spending them until the inevitable rush has passed.
However this likely won’t be the case for all industries. The businesses’ performance during the COVID-19 outbreak will likely determine their spending habits. SMBs that aren’t able to return to full operational status immediately will likely (or should consider) delaying their ad credit spend until later in the year. The majority of businesses struggling to attract new customers will be spending immediately, this includes the local businesses, restaurants, and small ecommerce model businesses.
Advertisers should monitor their auction insights, search impression share, and CPCs closely to ensure they are making decisions yielding the greatest ROI.
Prudent and Forward-Thinking SMBs Will Come Out on Top
While $340 million can certainly make a difference as a whole, we don’t know how many ad credits will be given out per SMB. Facebook’s announcement for a $100 million grant to go to 30,000 small businesses would mean each business would receive $3,333 each if it were split up evenly. If the distribution is similar to Google, a few thousand dollars in ad credits may not make a significant difference for SMBs.
However, if SMBs follow the instructions to watch their auction insights closely, gradually spend the credits as consumer spending returns, and engage solely in effective campaigns, they will see a lift.
Despite the help, those SMBs who receive these funds will surely feel, this grant will not be the sole savior for SMBs — rather a temporary reprieve and possibly enough business to float for another few months. All businesses at this time need to take serious reflection on their entire marketing efforts, not only their Google Ad accounts.
We applaud and celebrate innovative marketing campaigns seen from many brands who acknowledge the difficult times we’re all faced with, but elegantly position their brand in the current light. Marketing shouldn’t be at a standstill, even for SMBs. Continue to engage in channels like email, organic search, and social. Even changing up the homepage of the website to reposition your messaging for a few months will go a long way with customers looking for brands who understand the stakes.