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Saturday, May 02, 2009

Google's Soft Sell: Content Network Whitepaper

What's better: 100 ad sales people in your ear all trying to get you to buy subpar inventory? Tendentious studies trying to prove "brand lift" from ads even when they don't seem to convert?

Or a network that is quietly optimized and improved over the years, one that adds control and opt-out features including separate bidding, domain exclusion, and reporting on content types, such that it performs -- yes -- just as well as search on a CPA basis?

Why, the latter of course. Brand lift is real, and lattes with ad reps can be fun, but when I talk to my clients, for the most part, they're looking at AdWords like direct marketers and want measurable results.

Google's White Paper on CPA Performance Trends on the Google Content Network, based on data from 25,000 accounts, shows that:

  • On a CPA basis the Content Network performs about equally to search;
  • Content provides about 20% of the conversions in the median account;
  • Two account controls improve performance in particular: (1) site exclusion; (2) Conversion Optimizer;
  • Canada is getting the best deals on content on a CPA basis; the worst return is reported for the UK market. In line with past conclusions about these markets, I assume this is because Canadian advertisers are stingy with budgets on average, and not enough have entered the auction. In the UK, account management practices are sometimes shoddy, and anectodally, UK Google reps have encouraged advertisers and agencies to overbid, so until these practices improve, CPA's will not. The US places second behind Canada in content CPA performance, in keeping with expectations again: in the US there is widespread account optimization; many accounts today are actively managed and scrutinized as opposed to "set and forget".
Additional notes, from the fine print:

  • Image and alternate format ads were included in the study, but 86.9% of the spend under study came from text ads.
  • 90.3% of the spend under study used classic content targeting using keywords to trigger placements. Presumably the remainder used the new custom Placements options.
I have questions about the methodology, as follows:

  • Beyond these account controls, how many advertisers are doing anything special to actively improve performance?
  • Is the sample, based on a billion clicks and 70 million conversions, random? It doesn't sound quite random, but it does sound like anomalous accounts were tossed out, and a high number of accounts (>500) were aggregated in any given vertical.
  • Aren't the conversions a jumble of registrations, sales, leads, and actions of many kinds, jumbled in together?
  • Will a smaller study become available, one that looks at conversion revenue divided by conversion cost (ROAS or Return on Ad Spend) for those accounts that pass revenue through to the reporting?
  • What proportion of these accounts have been optimized by a Googler putting in research hours to select specific placements, tweak keywords, set up separate ads, etc.?
Despite some open questions about the methodology, based on accounts I see these days, I roughly concur with the conclusions. Though I think it is essential for advertisers to "do some special things" to succeed with content, including bidding lower in many cases, the CPA and ROAS trends have been quite favorable.

Based on the huge volume of accounts studied and the compelling way they've presented this data, I have to say this is an impressive study from Google. And they slipped their call to action in (no Buy Now!) in pretty subtly: advertisers in Canada, the United States, and Italy should look again at enabling content, or bidding higher on it. Those with broken-out content-only campaigns should consider using Conversion Optimizer to improve CPA.

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Posted by Andrew Goodman




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