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Google (GOOG) New Ad-Words Platform Will Drive Monetization, CPC Higher

February 8, 2013 3:14 PM EST Send to a Friend
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Google, Inc. (Nasdaq: GOOG) introduced a new, mobile-focused update to its AdWords auction ad-bidding platform. Nomura Securities is out with a few comments on what it might mean for the stock. The firm rates Google at Buy, with a price target of $860.

Nomura explains that the platform, which will roll out in the middle of 2013, will aim at simplifying cross-device ad campaign management while drawing more ad spend into the expanding mobile ecosystem.

Desktop and tablet keyword cost-per-click bids will now be treated equally. Google is basically merging the two segments, forcing advertisers that bid on desktop to also bid on tablets, Nomura notes. Ad dollar liquidity and competition will increase in the tablet auction market, which is a good thing for Google in terms of overall search monetization with tablet usage constantly rising.

Near-term, Nomura says it will be important to monitor CPC reactions as some advertisers are likely ot adjust desktop/tablet max downward. Over the longer-term time frame, the higher ad liquidity will be a positive for Google as mobile usage expands.

Mobile handset bids will be separate from desktop/tablet bids, so Google is making management of the two easier.

Generally, Google has simplified the process of creating, bidding for, and modifying relevant ads across platforms.

Pluses:
* Easy use and customization of the platform could lead to increased mobile experimentation and adoption.
* Serving more search results with customized content should lead to higher ad ROI and conversion rates.

Google is up over 1.5 percent in late trading Friday.

For an analyst ratings summary and ratings history on Google click here. For more ratings news on Google click here.

Shares of Google closed at $773.95 yesterday.




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