Day two of SMX West kicked off with keynote speaker Susan Wojcicki, senior vice president of advertising at Google. Wojcicki was essential to the foundation of Google (literally – Sergey Brin and Larry Page worked on the search engine in her garage during their Stanford days). At SMX she offered marketers some insights on how the company is working to balance the needs of marketers and users (especially in light of recent privacy changes) and what’s in store for the social search ecosystem.

Here are some highlights from her SMX Q&A keynote.

The evolution of Google adSense

Q: How has AdSense grown?

We have more options for marketers, and there are more controls to manage – from their spend to the types of sites they can choose to run their ads on. AdSense was historically simple in the sense that you had your campaign and we matched you contextually, then you could opt in or out. But then we listened to advertisers and publishers – expanded into double clicks, exchanges and real-time bidding. It’s become very sophisticated.

Recent Privacy Policy Updates at Google

Q: The conversation went from “50 percent of online advertising money is wasted” to “we have metrics for marketers.” How is Google working with the privacy changes, how are you addressing that [in terms of targeting options]?

We are very serious about rolling out updates that are good for advertisers while also balancing the needs and privacy rights of users. We’ve had three main principles:

1. Control – people have to be able to opt out.

2. Notification – we essentially say these are the ads: They are served by Google.

3. Transparency – with this comes the ads preference manager.

If we tell the users these are things we think you’re interested in and they understand the policies, they are usually comfortable with it. We see the same number of users adding things they want ads for as the ones who opt out. There are going to be balances, but if you give control, notification and transparency it can be a positive user experience

Q: How do you balance negative perceptions and provide products?

We’re at a point where there is change and people want to understand that change. As you introduce any new technology there are concerns. Think about when VCRs were introduced! By explaining the changes in plain and simple language, Google is trying to offer information for everyone.

Q: Why are the regulatory bodies not giving the same attention to other companies that have privacy policies?

It’s hard to comment on why a regulator would focus on Google as opposed to other companies out there, but an important thing to point out is that the only thing we’re changing is the privacy policy. People think we’re changing the data – but nothing Is changing tomorrow. As we make changes, we will notify people and explain new features. The notification of privacy policy updates is confusing some people about the related actions. With the update, we now have the ability to create a great experience for users. We want to make useful features – like the ability to sync your gmail and your calendar. The more we know, the more we can give you features that users will actually want. As we make these changes, we will communicate with our users on what we’re doing.

The Privacy Policy for Users’ rights Versus Marketers’ targeting

Q: From an advertiser’s standpoint, retargeting is a good way to tap into users’ intent but how does Google balance user needs?

It’s a question of saying, “We’ll get marketers qualified leads,” versus, “Users don’t want ads to follow them.” For marketers, it works because it can be effective, but for users it can also be effective. In one case, [a person she knows] went to a hotel site, ended up not booking a room, but then got a special offering a free night because he was being retargeted. It’s just about giving users transparency and options.

Q: There’s talk of the “Online Privacy Bill of Rights.” If you move toward no tracking with the browsers, how will that impact retargeting?

There are different groups in the advertising industry who are able to come together and create consistent control for users at the browser level with Chrome. Users will have the ability to opt out, though there is some information that will still need to be retained for spam and things like that to keep the internet working. We’re going to continue to work with industry leaders and browsers to develop opt out.

We offer an opt out right now – there are notifications about these are the privacy changes and opportunities to opt out. Regardless, users will still see ads, probably less relevant – no free nights! – but users have to have that option.

The Rise of Social Search (and Social Advertising)

Q: What’s your take on advertising with Google+?

The first step for any marketer is to have a Google+ Page. Why don’t more businesses have Google+ Pages? Be on Google+! And then how do we include Pages (and related ads) over time with search results? We’ve seen some marketers start doing some really interesting things. They provide a great resource for customer support calls, industry networking – there are some great things companies are doing. The other thing is to start using +1.

[In terms of social ads] Ads work just like content: It’s important to see which content is being well received and which ads are being well received. It’s like in real life – what do friends recommend? We want to know that for content and for ads [through +1’s].

Q: If Google+ is a “layer” for all Google products, but what are the top five things Google hopes to get from Google+?

Google+ is the next generation of Google products. It helps us know our users and lets us work across our products for relevancy. The next phase of search is getting more personalized and more useful – that’s where Google+ is getting us.

The rise of mobile search (and Mobile Ads)

Q: What about mobile search?

Can we really live without our phones anymore? A lot of marketers don’t have mobile landing pages. If you’re working with SEM, make sure you have mobile pages. At Google we’re working on signals that make mobile different – like location. And anything users can do with a mobile app – shake, touch, interact, etc – they should be able to do with a mobile ad. Mobile is here!

[Wojcicki and the moderators reference the spike in mobile searches on Valentine’s Day.]

Q: What is click-to-call?

A call is like a click. Advertisers pay when people call, and we’ve recently added the ability for marketers to bid on calls. For local businesses, I think the calls are really meaningful and we’re going to work on that continuously.

Google as a Knowledge Source

Q: Your personal background is interesting: your father taught physics at Stanford and your mother was a school teacher. How has that impacted your work?

Growing up on the Stanford campus gave me a passion for knowledge… I think that’s consistent with Google: How do we get to the bottom of who people are? How do we push the limits of provding a useful experience?

I think of Google as a sort of modern version of the library of Congress – people go there to look up information.

Providing meaningful ads

Q: With the pressure to satisfy the needs of your customers, how can you explain that are are increasingly taking up the prime real estate above the fold and they’re starting to look more like organic? Is it pressure from advertisers or do you think it’s good for users?

We haven’t added more ads – we’ve had three ads for awhile. But the ads have taken up more space, with added features like sitelinks. But it is a challenge. If people are looking for commercial information, sometimes the ads are the most relevant information, but for a lot of noncommercial queries we wouldn’t give that much space to ads. A lot of it has to do with context. It’s driven by, “What’s the right experience for a user?” We think about the whole search engine results page.

Q: The industry seems to be perpetuating the idea that ads are bad: Only six seconds left, or “click here to skip this ad.” What’s your take?

Ads are really just information. If ads are information, how do you show the right ad at the right time? I think if we’re successful we can give users helpful promotions, info about products, etc. And there are times when people like ads – think of fashion magazines. So the challenge is, how do add richer experiences and with better context about specific users? It’s a combination of getting more information to make richer experiences.

There is a lot of opportunity to create compelling ads, and that’s what we hope to accomplish with advertisers.