It's great news that Google has taken the time to think through the pivotal role of agencies in helping advertisers advertise on the Google AdWords platform, and to release a new AdWords Certification program. As the head of a search marketing agency, I value the fact Google is explicitly affirming their philosophical support for the agency world at the same time as they release specific changes in programs and pricing that support that relationship. Official mission statements are important; they ensure that no one at any level in the company is hearing contradictory messages. Sometimes, all it takes for us to be able to work better together is to hear someone say (and write): you've got a formal place in our ecosystem, and a special place that won't be interchangeable with everyone else's place, or too easily devalued.
So, the obligatory punch on the shoulder, and "aww shucks, thanks, guys".
To be sure, no one is naive enough to think that Google won't also work directly with some advertisers. But there should be no more talk that Google is uncertain in its approach to the agency ecosystem, or that the powers that be at Google somehow want to "cut agencies out of the equation." You don't invest in support, agency teams, new certification programs, and new API models unless you're sincere in the support.
Waiving AdWords API fees for agencies using their own bid management tools adds up to a significant chunk of change. It also, as Google notes, leads to more innovation. In developing new ways to automate marketing, developers at agencies (and the end client) won't have to mentally subtract out the cost of the API tokens when deciding how much time and money to invest in new tools. If some agencies abuse the privilege, that's easy enough to stop. Tell them to stop it, or the fees will kick back in (and their Partner status could be revoked).
Outside the AdWords ad world, this might seem like a minor deal. To those in it, it's pretty significant because it means Google has indeed evolved into a mature player much as many of us hoped and expected.
Here's a quick before and after to give you a sense of things:
Before: A confusing Google AdWords Professionals certification that was very easy to achieve, handed out to a wide variety of semi-qualified individuals, with no clear delineation between scrappy upstarts who can pass a simple test, and who would be really interested in helping you with your AdWords advertising; and real agencies with infrastructure and a track record of working cooperatively with Google and solving many client problems over time. Later, a Qualified Company certification got bolted onto that. While a step in the right direction, it left too much confusion in the marketplace and didn't give enough credit to the difference between entities (agencies) and individuals (anyone who can get a decent grade on what amounts to an open-book exam).
After: A redefinition of the Qualified Individuals status to help individuals showcase their talents to potential employers (not directly competing for clients with more qualified agencies or experienced in-house talent); a redefinition of the Partner Certified Qualified Companies to mean more rigorous exams, and a range of other benefits like a searchable Google Partners listing.
There's quite a bit more to it, but that's a start.
I started as early as 2005 trying to articulate the case for such an evolution at Google -- mainly, in both editions of Winning Results with Google AdWords. While many in the space sort of took Google's informality at face value (panting with lust at any announcement of any kind of Google certification), I always figured they'd have to take another crack at this because the ecosystem of resellers and partners (assuming it demonstrates its value and shows itself deep, wily, and resilient enough to maintain customer relationships as opposed to being disintermediated/crushed) must be treated formally as such, much as it always has been in the technology world, with companies like Microsoft serving as the global standard (but there have been hundreds of others). As Google began rolling this type of thing out with Google Website Optimizer and Google Analytics (as strange as it is to be a "reseller" of free products), the logic became clearer, and you knew/hoped that Google would soon be on its way towards formalizing those relationships on a few fronts.
The old approach and the old programs were a bit tantamount to us out here being asked to "fan" Google on a Facebook page, without too much interaction, formality, or "anything in it for us," and as a result, on the other side, Google couldn't ask too much in terms of stated qualifications, business characteristics, more rigorous certifications, etc.
The new approach takes aim at the future and walks us all kicking and screaming into adult relationships. The old, informal ways were fun and we will miss them. But they're a thing of the past.
"Third parties often advise clients on how to use AdWords, or directly manage complex campaigns. ... Observing Google's progress in dealing with the environment of marketing and advertising agencies, they have never fully given up on the idea that advertisers really should be coming directly to them for advice. However, this situation appears to be improving.
A Google Advertising Professionals (GAP) program, launched in November 2004, was an interesting initiative that was supposed to sort out qualified from unqualified individual AdWords campaign management practitioners. A company wide (agency) version of this is also available. This is more of a training and indoctrination program than anything else, however. The reward to the qualified professionals and agencies is minimal at best, though ostensibly it helps advertisers avoid working with "hacks".
Agencies certainly get much less out of Google in terms of financial rewards (such as a commission) than they have in any relationship in the history of advertising. On a variety of fronts, including the Google-agency relationship, observers have asked the question: is Google sucking the proverbial oxygen out of the room? While consultative relationships have improved and become more formalized -- a key improvement, to be sure -- many of the leading AdWords consultants and evangelists must make their living from service fees alone ... while Google's extreme profit margins continue to fuel the company's growth. There are practical hurdles to be addressed before such traditional advertising industry practices can be adopted, particularly in the "geek culture" which has served Google so well. However, the goodwill ... of the search marketing agency community ... may hinge on a recalibration of their financial relationship with Google.
In its formative years, having the right (geeky, iconoclastic, world-beating) attitude at the right time was a big part of what made Google into a global powerhouse. Some critics predict that this same attitude could be its undoing. Experts believe that the degree of cooperation with the developer community (and I would add, the marketing ecosystem) will determine whether the company has the staying power of a Microsoft.
Through the back door, Google may be studying ways of responding to the above analysis. Beyond AdWords, the company has new, highly technical products, like Google Analytics and Google Website Optimizer. It has initiated partner and reseller programs for these products. By instituting criteria for membership, working closely with the community on product development, and figuring out ways of steering valuable consulting business to such resellers and partners, Google can study the ins and outs of forming such productive relationships. Such relationships seem to be founded on classic models common in the software industry, especially in high-ticket enterprise software. What makes this unorthodox (as usual) is that Google's products are often free, and many of the customers for them are small to midsized businesses. What will it mean for my consulting firm to "resell" Google's free product to a small customer, I wonder? Like many others, including Google themselves, I can't wait to unravel that puzzle. ..."
Getting credit for an online conversion - and giving due credit to all recent influences - has been one of the hottest topics in digital marketing over the past couple of years. The urgency of the matter has grown as media costs -- especially click prices on paid search keywords -- have risen.
Marketers have been so hungry for better attribution of "keyword assists" (or simply, the non-overriding of the first click in the sequence towards purchase, whether that's over a matter of hours or many months), they've been willing to explore cumbersome customizations in a variety of analytics platforms, including Google Analytics.
But if you're looking to simply analyze the contribution of paid keyword searches on Google Search that preceded the keywords that led directly to a sales conversion (aka "assists"), you'd prefer to see all that data rolled up conveniently within Google AdWords itself, showing the data in handy formats that might make it easy to change your bidding patterns. In particular, earlier stage keywords (typically, before a last-click brand search) would now be revalued in your model; you'd bid them higher in cases where they made assists.
Earlier, when I defended the "last click"'s merits as an attribution method, I pointed to some data by Marin Software showing 74% of etail conversions only have one associated click - even counting assists. Moreover, Marin's approach bucketed prior clicks categorically, arguing that if a prior click was very similar in intent or style to the last click, then the extra information wouldn't be enough to cause you to alter bidding patterns anyway. That knocked the number of truly "assist-powered" conversions (that you could actually attribute properly) down to 10% or less.
This is where Google's new reporting needs to be scrutinized closely. In your individual case it could be quite valuable, but in current individual case studies Google may have on hand, anywhere from 70-95% of conversions only have one click to speak of. If Marin's logic above is even close to sensible, then it does underscore the limits to assist data. There will be some value attributable to assist keywords in around 10% of conversions, give or take. That's actionable but not earth-shattering. Of course, this is going to be most valuable to advertisers who have a lot of prior influencer clicks hiding behind a high number of clicks that are currently attributed to a last-click on the brand name.
To pump up the role of prior keywords, it might be fair to also point to assist impressions - views of the ad on Google Search where the ad wasn't clicked, but shown. But in those cases was the ad really seen? Perhaps not, but there may be some value in knowing what search keywords got the searcher's research motor running. Perhaps they clicked on a competitor's ad. Google is offering impression assist data as well with this release, which will be sure to delight trivia buffs, AdWords junkies, and Google's accountants alike.
Remember, we're not just talking about multiple searches all done in a single day, or in one session. Google is logging the time and date of every search by that user prior to a purchase/lead, and when a conversion happens, full funnel information is available as to the time lag between clicks and before the conversion.
Adding in impression assists to the mix, we may see past search query information for up to 20-25% of conversions in some advertiser accounts. Again, while not stupendous, this at least counts as extremely important and material to how you approach keyword value.
The ease of sorting in order of frequency of conversion by assist keyword helps not only to see the keywords in question, but with the "keyword transition path" view, you can see what last click converters they preceded, to better understand the consumer mindset. The screen shot below is a canned Google example while the program is still in beta. In my briefing I saw a more typical and valuable case example that showed the frequency (fictitious example to replace the one I saw) paths like "almond milk calories" > planethealthnut or "milk alternative" > planethealthnut. Whereas the brand might have got disproportionate credit for this conversion in the past, now, keywords like [milk alternative] or [almond milk calories] might attract higher bids, even more so if you experiment over time, allowing for more repetitions of your "research stage keywords" over many months.
In my opinion, "paths" work fairly well as a metaphor here and are not too misleading because the "funnel" steps tend to be relatively coherent and causal in practice. They aren't necessarily so, however. The reason these reports can look sensible is because they're drawn from a narrow universe of high-intent keywords that advertisers are avidly bidding on. You're not going to see a paid search keyword funnel path like "drawbridge in mexico" > james mcbleckr phone 415 > nike > air jordans used > nike.com largely because Nike doesn't have most of the keywords in that path in their paid search account. Truly generating causal paths out of all the things someone does online prior to a conversion is likely to be incredibly messy, but that's a much longer story.
Long story short: life is indeed a lot simpler when viewed through the prism of an AdWords account. And today, advertisers are getting what they desperately seek: easy-to-use information about paid keyword search attribution so that the last click doesn't override all other attribution data.
Google's impressive Q4 2009 earnings report makes certain aspects of the business clear for all to see. For example, they report that revenues of $2.07 billion in revenue was generated by "Google partner sites through its AdSense program," and that "amounts ultimately paid to our AdSense partners" totaled "$1.47 billion in the fourth quarter of 2009".
Misleadingly, the report states that "TAC (traffic acquisition costs) as a percentage of advertising revenues" is 27%. True, but as a percentage of same-channel advertising revenues, it's 72%. There are virtually zero TAC's for "Google-owned sites."
Speaking of those Google-owned sites, they generated $4.42 billion, or 66% of Google's revenues.
In these numbers is the usual picture of impressive strength -- including the fact that the overall number of paid clicks rose 13% YOY (indicating continued success in optimizing page layouts while satisfying users) while click prices rose just above the rate of inflation, at 5% (indicating a leveling-off). But coupled with that strength is the interesting point that financially speaking, Google continues to provide only the illusion of a diversified company. It continues to do well, very well, based on its core cash cow. Elsewhere, it serves as a relatively polite intermediary that continues to face downward margin pressures.
The growth picture is an interesting mix: heavy investment in new areas like mobile (a longer road to profitability), and a relatively smooth path to continued growth simply by enjoying the great upside that remains in international markets in its core strength.
Which, in case anyone has forgotten, features the catchy advertising product: "Google AdWords."
The financial picture for GOOG remains very bright, but mainly because its core strength has such high margins, and Google (needless to say) owns the key "publication" (Google Search) outright.
I just paid $100 for an extremely targeted information package, written and recorded by an affiliate marketer, about a very specific element of Google AdWords advertising (hint: it's in the content network).
I've seen this working already in practice, and I figure his tips will mean a lot more than $100 to my business, so I bought it right away.
"My business" isn't an affiliate marketing business. It's for clients. Even better. They have bigger budgets.
Let's be clear: he promises that for most affiliate marketers (especially clueless ones), this technique could add up to peanuts. Many campaigns will try as best as they can and spend only $5/day.
So I paid $100 for it?
Yep, because I understand the value. I know it's valuable info.
The other curious thing is I rejected all the add-ons, freebies, and accoutrements that could have come with it. I didn't want to accidentally sign up for something that turned into a renewing contract, and besides, I didn't want to get distracted from the core information I wanted.
Here's what impresses me. Legions of would-be experts and helpful souls will offer up mounds of information this year in an extremely helpful, and free, fashion. Doesn't info want to be free?
And yet this relatively unknown affiliate marketer, proverbially working from his basement... should clear about $75,000 this month from this information product. It may not have huge legs, but it got the job done for him, income-wise. And the value is real. Many really good authors will earn less than that this year, needless to say.
So what impresses me is not that you can make more from specific information, but *how* specific the information is. This product covers a *tiny* sliver of the marketing universe. No one will grade the author on how well he grasps marketing as a whole. Not even how well he grasps AdWords as a whole. Just whether he taught one specific technique in decent enough detail so you can try it: $100.
Will his "loophole" close? Maybe. But in this game, if you can't squeeze $100 out of something before the loophole closes, you gratefully accept the chump label and move on.
I learned the lesson along ago: when I burped out the Google AdWords Handbook in 2002 it was a semi afterthought after 18 failed months attempting to put together a magnum opus on SEO best practices (or something like that). It did great.
In 2004, while I was writing the first edition of a more serious grown-up book on Google AdWords with a big publisher, several times I got panic calls from the publisher. They'd read one of those negative stories about Google's business, and they figured that AdWords was a flash in the pan. This continued through 2005! Really! I'd have to reassure them that they were seeing some very odd (if seemingly respectable) journalism. And that Google's advertising program was not too small to go to press with.
What's stunning to me (but it should not have been) is that a book on Google AdWords is almost too broad today. There's room for books that cover a broad topic. But they don't get people to whip out their credit cards to pay $100 online, do they? Odd paradox. Less is more.
I don't have any New Year's resolutions on the books, but if I did, I bet it would be to try to go to market with an incredibly specific piece of information. And, for a change, screw "free." In Chris Anderson's book, he actually reminds us that the real quote was something like "commodity information wants to be free, and scarce information wants to be expensive."
At SES Chicago, a member of Google's product management team routinely asked me if there were particular aspects of the AdWords interface that we ("power users") would like to see improved.
Sometimes I'm at a loss when it comes to questions like that. There is so much going on in an interface like that, specific suggestions can slip my mind... and in any case, in the beta process for the new interface Google must have had to weigh thousands of pieces of input anyway (so it's really the weighing that is the issue as opposed to any lack of cool feature ideas).
To be a smartass, I certainly might have pointed to the campaign setup phase that hides the need for us to enter separate (or no) bids for the content network or to more clearly offer advertisers the ad "rotation" (as opposed to "optimize") option. Google makes more money when advertisers forget to address these settings, so I basically don't expect them to change the state of affairs that amounts to "usability in reverse" on the campaign setup. It's not unlike hard-to-read credit card statements. The less people know, the more the company makes.
Asking for a small feature change misses the point, if there are significant areas that affect campaign economics negatively, that haven't budged.
So then it hit me -- we still haven't seen any movement on the issue of differential bidding for the "search network." George Michie recently reiterated what is basically a unanimous feeling among advertisers: that we need "syndication controls."
To refresh your memory, there are essentially three big channels available to AdWords advertisers, with many controls underlying two of them. (1) Google Search; (2) The Search Network; (3) Content Targeting.
Google Search is self-explanatory. Content targeting is a network of online publishers, from the biggest to the smallest, who participate in the "AdSense" advertising program. For advertisers, there are two flavors of this program: automatic placements and managed placements. Both offer stupendous levels of control for the advertiser, including the ability to set specific bids.
The search network is other search engines who display Google AdWords ads much the same as they appear on Google Search: AOL, certain Internet Service Providers, Ask, metasearch engines, etc. But in addition to that there are "navigation like" properties. Google publishes no formal exhaustive list of these partners.
This is where it gets weird. You can opt out of the search network. But who would want to, as it is a decent chunk of good traffic that typically far outstrips the buying intent of things like display ads, etc. Unfortunately, on most accounts, it universally performs worse, with CPA's (costs per acquisition) coming in 20-30% higher. And you cannot bid on the inventory separately or opt out of specific partners or segments, something you can do extensively in the other two megachannels within AdWords. So you're either all in, or all out. That's strange, and it hurts advertisers. I join Michie in his "rational plea."
The thing about AdWords copywriting - like the exercise of performance-based marketing in general - is that it's humbling.
If you're in a job where you can go for a year at a time without the 16-ton anvil of consumer non-response slamming down on you, good for you. Your job is dying, but enjoy it while it lasts.
Eventually, our goal is to get to optimal ads: for argument's sake let's say the main metric we're after is CTR (though this is a very partial truth). Sometimes we get better when we test. Sometimes worse. But we test, test, test.
One of my tests this week had a response rate about 96% worse than the baseline ad. We're talking: the legacy ad got 25X more clicks than my test ad! No shit!
My ad was clearly better when I wrote it, humming a happy tune as I basked in my own intellectual superiority. I capitalized the first letters of the words. Mentioned that the product was trusted on an intergalactic basis, by both corporations, and governments! It was as if Captain Picard himself had endorsed this software.
I don't know if it was that my body copy smacked of a global conspiracy, whether the caps were ugly to readers in Portugal, whether my headline didn't match quite as well. But the old ad, for whatever reason, created a connection with the prospect. Like, a 25X better connection than the new one.
Did I give up? No way. Will the new ad win? I sure hope so.
By contrast, many forms of traditional advertising are to consumer response as Second Life is to dating. There's zero chance of tangible proof of real-world rejection, so -- just a tinge pathetic, wouldn't you say?
Today, VP of Product Management Susan Wojcicki officially describes a variety of the new formats, with appropriate screen shots.
One reaction might simply be, "OMG another nail in the coffin for SEO!". I'm sure some in the SEO community will be afraid that more and more paid screen real estate will make it harder to drive organic traffic, and to some extent that's true. Whether elements of "universal search" take away organic traffic by one mechanism, or whether big local (paid) units take away organic traffic by another mechanism, it's an ongoing shift in the works.
And yes, it's a shift we said SEO's should get used to even back when we wrote about paid inclusion and paid search in the period 2000-2002. It's not easy news to share; never has been.
Google will no doubt protest it isn't turning into the Yellow Pages entirely, and certainly there will remain a huge amount of "unmonetized" inventory.
Susan Wojcicki makes another point worth noting, though, and that's "remaining loyal to [Google's] core principle" of "getting the right ad to the right person at the right time." Perhaps that's a core principle, but it's one that was invented and then emphasized by Wojcicki as a "core principle" in a blog post in 2008.
That implies that the new ad formats are, well, sort of an incremental, evolutionary change. On the face of it, this is disingenuous. In fact, if you looked up disingenuous in the dictionary...
I mean, look at some of the units. Hey Pizza Hut. Want to take up 50% of the screen real estate above the fold, on searches for "pizza hut"? You might have already, but with our new "pay us more" plan, you can sort of control how we display your listings.
Don't pay? Well, it might look something like the screen shot below, when a Toronto native searches for "pizza hut." Oh sure, you show up nicely in the organic results. But doesn't it really stick in your craw that the top sponsored listing is for Pizza Pizza, the leading pizza chain in Canada? Arrggghhhh! Pay up, Pizza Hut.
It naturally occurs to us, then -- given Pizza Pizza's success at "brandjacking" in this instance (largely legal in North America, though often subject to trademark litigation) -- that Pizza Pizza could scoop up the whole area above the fold, even on a search for "pizza hut," if they paid enough. I'm not saying it will happen, but while we're massaging core principles, what's a nuance among friends? Why not go all the way? I'm sure a few users will want to find a Pizza Hut, but they'll quickly lose interest when they see that Pizza Pizza has more locations anyway, to say nothing of seven flavors of dipping sauce.
It may well be significant that Nick leaned towards the word "revolutionary change" in his keynote. He wanted the community, and advertisers, to know that every assumption is on the table for discussion. Implying, in a way, that Google was adopting a new "open for business stance." While Google isn't about to throw its users under a bus entirely (at least if anyone remembers the Google Paradox that made them as wealthy as they are), it's hard to agree that this shift squares with Google "staying loyal to its original principle," unless that principle is a malleable, made-up principle that started making the rounds fewer than two years ago.
Are these significant enough changes to be unsettling, at least to the large contingent of longtime punters who thought they understood what Google's core principles were in the advertising realm? Absolutely. It's way beyond just rattling a few cheapskate SEO's. It's going to shake you up even if you liked buying the paid listings in the past.
Those who will be most comfortable with the changes may well be old-school big brand marketers, and agency veterans from the interruption marketing, big media buy era. Curious. Google spent ten years deriding that paradigm, forcing its adherents to play inside of Google's platform. Now, it's "you got money? let's talk."
They're radical changes, but naturally, Google is painting them as gradual. (Well actually, Nick Fox was honest. He used the word "revolutionary" at one point.)
Here are the key differences between New Google Advertising (2009-) and Google Advertising Classic (2001-2008):
Google is doing paid inclusion! In several ways. If this is just the beginnings of it, as it probably is, then Google is moving into paid inclusion in a major way. Almost all of Google's competitors have been lambasted for muddy ways of monetizing that didn't firmly explain what should go where, and whether it's paid for or not. Now that it has a monopoly position, Google is angling to do more of this muddy inclusion than any of its rivals ever did. Danny Sullivan, one of the only people in the industry who has followed the details of all forms of relationship between monetized and unmonetized search inventory, from Day One, of course called this right away in a column last week on Nov. 16, "Google Experiments with Paid Inclusion". And called "BS" on any attempt to deflect attention from this major shift in approach.
Google is ramping up a direct ad sales force and turning into the Yellow Pages, where it suits them. Folks, you can't buy all these various ad formats through a platform, and you don't have to adhere to an algorithm or an auction. Arguably, if you want to throw more money at Google, bunches more, for innovative forms of exposure and attention -- so innovative that they impact how Google manages the user interface, not just where it puts your message -- you're free to do so. Hello deep pockets, goodbye level playing field and transparent pricing.
Google, the search engine, is now heavily dominated by advertising and thinking about advertising. If you're into information, we suggest you consider Wolfram Alpha, or the local library.
I'm sure more bullet points could be enumerated, but that's the heart of it.
Heck, as a search advertising specialist, I should be thrilled. Maybe, but I'm also a search and information geek. Media buying is at the heart of what SEM geeks do, so I'll survive and so will our corporate clients, who seek ways to buy digital exposure on search engines and elsewhere. But I'm not entirely sure how anyone at Google can talk about their new ad formats cleaving to Google's "original principles" with a straight face, unless they're referring to an "original" principle that's all of two years old.
No one's holding a gun to anyone's head, of course. People love to shop. They love movies, and they love to compare mortgage rates. Hey, many consumers willingly watch infomercials. It's still a free country and you're still free to use or not use the engine and free to look or not look at the ads. But make no mistake, it's a significant change, and it comes at a time when the only significant challenge to Google's monopoly on commercial search in many markets is a search engine run by Microsoft.
Google's early experiments with blended search results made it seem like they never planned to charge anyone for appearing in a whole diversity of (often commercial) forms of listings. Viewed from a certain angle, it now looks like they're cooking up ways to charge everyone for everything. The free ride is rapidly coming to an end.
It may seem like a small point, but "pay-per-click" was the nickname given to paid search advertising back when it started out, but it only describes a pricing method, not the nature of the media or what we seek from it. (In the proto-days of that same technology, "paid keywords" or "buying keywords" was another way of describing it.)
I was reminded of this whole mental muddle today reading the headline from an email solicitation, something about "getting more PPC without using Google".
But that whole line is kind of old hat. It's the come-on that opportunistic, non-search-based ad platform companies used to sell their crummy, remnant, and sometimes fraudulent contextual text ad inventory. Sometimes it couldn't have even been described that neatly. It was traffic, and you paid for the clicks, and potentially you used keywords to guide the system towards certain publishers, but that was about it. You might as well have paid the effective CPM rate, as bid on clicks. Didn't matter.
That's why I always advocated paid search as the term of choice for people who really wanted to go after clicks from ordered results placed near search engine results, but it scarcely matters what I advocate! -- people will use all kinds of terms.
SEM is another term that arose. Agenda-setters in the business tried to remind everyone that paid search (or "PPC") is one sub-type of SEM (search engine marketing), and SEO (on the "organic side") is another sub-type. But the fight to make SEM exclusively the global term, and not to be used as synonymous with PPC or paid search, was lost. SEM is often used interchangeably with PPC or paid search.
No matter. With all of these nomenclature battles being unwinnable, we should turn our attention to the whole reason "PPC" was so attractive as a pricing mechanism. It's because it represented a happy medium between CPM (paying only for impressions -- "cost per thousand impressions") and CPA ("cost per acquisition" -- paying for lead conversions or even revenue-generating sales conversions).
You can draw up equivalents across these mechanisms, and measure or express them all for your keyword (paid search) campaigns. So the click isn't anything special. It can be expressed in its CPM equivalent and you can and should also be measuring ROI, ROAS, or CPA.
Indeed, according to some scholars [see "Greedy Bidding Strategies for Keyword Auctions"], the most rational strategy for bidding in a digital media auction would take you straight to CPA or revenue if that was possible. If you could bid directly on the customer acquisition or revenue, you would. (And in fact, that's what some forms of bid management automation attempt to do, at one or two removes. And it's what manual campaign management also attempts to do, painstakingly.)
But step back further. Are search, keywords, or clicks inherently special? Why the drive to distinguish them from other forms of media? Is it for what they are, or what they represent?
It has to be the latter. They represent potentially the most extreme (and measurable) form of granular targeting and flexible bidding, of a certain type. This is reflected in the sky-high effective CPM rates for some keywords.
But that means that all of this distinguishing one type or another is done mostly for economic or practical reasons.
Search and keywords (and clicks) fall into the general category of auction-based digital media. Whether we're bidding on clicks, acquisitions, impressions, or other, the universe of digital media is amenable to similar tests. From a rational bidder's standpoint, there should be no inherently good or bad media, nothing inherently "creepy" or "wrong," nothing inherently above reproach either.
That's mostly true. It's not entirely true. (Dropping ad-laden anvils on prospects' vehicles is interruption media, and some companies would pay for it, but it's stupid and illegal.) But isn't it a good starting point for analysis?
"PPC" doesn't matter per se. So pitches like "now you can get 'PPC' from other channels than Google" shouldn't have any special weight. You shouldn't be looking too hard for that inventory if your economic criteria show it's not going to pay off for you. Nor should you have been ignoring it all along just because you thought that "PPC" or "Google" were special for some inherent reason.
With a few high-profile exceptions, water always flows downhill. If you want to calculate which way a river flows, all you need to calculate is which end is on the high ground, and which on the low ground, and there's your answer.
Similarly, the flow of advertiser dollars from other channels into paid search platforms like Google AdWords has been predictable over time because of one factor: measurable performance when compared head-to-head with other channels.
In accounts where that condition hasn't been satisfied, companies don't increase budgets for paid search. They don't always shut off their accounts, though. So the end result is an account that sort of wanders along, hoping for the best, performing far below potential.
At different points in time, this state of affairs might benefit Google a lot or a little. The times when it benefited Google less were when their relevancy incentives (mostly CTR-based) were set in a dogmatic sort of way. If your account was really lazily and loosely targeted, eventually stuff would get "disabled" or "deactivated." That would kill volume for you, but you were probably doing horribly anyway, so it was actually a savings. Google, meanwhile, didn't get to exact as much of an "idiot tax" out of you. So they had to rely on other mechanisms, such as ego bidding or a hot economy, to further their profitability.
It's not quite like that now. Google has a sophisticated set of mechanisms for selectively allowing you to screw things up. They may not particularly like your fuzzily-targeted ads, but they're willing to show a certain percentage of them in certain verticals as long as your bids are sky high.
The end result of a low-volume, fuzzily-managed campaign, of course, is a poor ROI for the advertiser. But here's the curious thing. If the company has invested something in people and plans to run ads in this channel, they don't shut it off completely. They treat it like their other underperforming channels: shrug their shoulders, hope it gets better, turn the budget down a bit so it doesn't cause significant harm. From day one, I've suggested that this isn't a true savings, but a squandering of potential. "All in" or "all out" should be the advertiser's mentality. It is difficult, but not impossible, to optimize your campaign so that increasing the budget is feasible. If that's not happening, why run it at all?
The fuzzy, meandering, high-CPC-low-return campaign is not a negative scenario - short term - for Google's revenues and profits. These inefficient campaigns collectively spend heavily, smoothing out the ups and downs of the keyword auctions where advertisers are managing more tightly to customer responses. That's one of the reasons why, in the near term, Google's revenues will continue to rise gradually or at least be flat, avoiding the severe hits that other advertising media have taken during the recession. Look for proof of this with Google's upcoming Q3 2009 earnings release on October 15.
At Page Zero Media we inherit such accounts fairly often. There are two common targeting errors that companies make in the early days of planning AdWords campaigns:
(1) Loose and broad targeting, particularly of the type that addresses a mass market when you're going for a niche market. A company will say to themselves (perhaps having watched Conrad Hilton in Mad Men saying he wants to put a Hilton "on the moon"): "We want someday to be the biggest and best insurance company in the world!" But for now, they're just focusing on being top-of-mind in car insurance for high-risk drivers, especially those under the age of 25. Somewhere along the line, possibly in a text message from a golf banquet with impressive friends, the CEO forced the associate to the assistant marketing director to try broad matches for the words "insurance" and "car insurance" in the campaign. They're still eking along, in select markets, costing the company $18 per click whenever they are clicked, eating into the allotted budget for all the good stuff.
(2) Insider thinking. Companies get into their own jargon, right down into the regulatory mumbo-jumbo from arguments in Congress about all the players in their industry. The next thing you know, there are ad groups containing all the jargon about high-risk drivers -- jargon that's only ever come up in those Congress debates, in board meetings, and expensive consulting reports. People click on the ads occasionally, but they're inevitably just looking for information, not a car insurance vendor.
As these cardinal errors continue to eat away at the overall budget, the ROI for the whole campaign looks poor. The budget stays where it is. And the company concludes that the channel doesn't match the hype.
I got a note from a colleague who has spent years building out paid search campaigns that have formerly failed for the above reasons. Here's his tale of woe - the industry sector changed to protect the innocent:
If I can lend a "yes this is the way it works" rule to any PPC work for [insurance] that we should inscribe into our core being: Seth Godin needs to be read by every one of the people who do campaigns for them. Most of the time (probably CEO driven) they focus on the whole "getting their name out there" thing. Each new one I see is a broad, undisciplined mess. They constantly target information seekers with words like "best insurance" or "top insurance companies". The people who click those 1) Already have a vendor and are satisfied with them; and 2) Are simply looking for ideas; 3) In no way are targeted properly.The kicker is that those words are $5, $6, or $10 a click. They might as well spend that money on a TV commercial because that is akin to interruption marketing, PPC style.You can get fooled as well, because if someone has an article on top insurance companies on their site, like our client does, people will read it and stay. The bounce numbers tend to be pretty low, so if you are looking at that only, you get a false sense that the words are working. But when you look at signups, they are very close to 0%.I am not sure many of them do it, but content and blogs should be king for these sites, for those words; and they should spend that money on writing content. If you have and write articles based on all the key buzzwords like "car insurance comparison", you should get bang for that on organic search for $0.Example: "Best [(competing but ultimately very different type of) insurance]" and so on. Our new client spent $22,000 on those words via adwords. They got one person to sign up for an account. ONE! [Edit: we did more checking, and it might have been two.]Conversely: Targeted to their selling proposition of [doing more research on individuals in high risk insurance categories to offer them a break on rates if possible], those words [all having to do with insurance rates, unfair insurance rates, demographics of insurance rates] and so on, with a good ad, had $4000 spent and they got 20 people to sign up.OK, long story short: For financial services, not unlike others but especially for them, being targeted to exactly what you do if you are spending $4 a click or more is so vital it is not funny.
Google has worked themselves into a situation where the "idiot tax" helps Google's bottom line. So although they'd prefer it if most advertisers improved the relevancy of their advertising, the current system is built to hedge against idiocy. That being said, then, Google doesn't stand to gain a whole lot as advertisers become savvier and more efficient. In the past, the genius of the ad platform meant that Google's earnings and profits raced ahead faster than expected. During the recession, they're outperforming everyone else. But as the economy recovers, this current efficiency also means that you may not see Google grow as fast as you expect. They've wrung a lot of cash out of relatively wasteful advertising. Less wasteful practices will definitely help individual advertisers... a lot. They won't help Google nearly as much.
Not everyone who follows this feed reads all the columns over at SEL, so I thought I'd draw attention to a core concept in my recent review of Google's new Bid Simulator tool for AdWords: PPC Auction Pliability. That is, on any given keyword, how much resistance is there in terms of bidders above and below you in the auction. Is a change in your bid likely to make a significant difference in your performance, or is it all jammed up so you're more or less stuck where you are, assuming you understand your campaign economics?
There are many ways to optimize paid search performance. I favor an integrated array of techniques, heavy on response testing.
But the "old school" concept of finding "sweet spots" in the auction, keyword by keyword, is a nice way to do a little extra legwork to decide whether to bid higher or lower in certain instances.
It's not always a good idea to look for so-called sweet spots, as some formal academic theory might suggest that in many cases, especially if you use enough automation, there aren't any. But the ideal world aside, it might be nice to know if there are a lot of "bids overhanging the market," as they say in the financial world. If a keyword auction is particularly "busy" above your bid, then you'll have to raise your bid an awful lot for little improvement in volume.
On the other hand, if you're stuck in between a couple of bidders but there isn't much activity above or below them, I consider those auctions to be more "pliable." You could go up a bit in your bid and reap volume associated with higher ad positions on that keyword. You could go down a lot and not lose too much volume (with the caveat that Google is under no obligation to serve your ad in every auction if your quality score won't support low bids, so lowball bidding can reduce volume if Google really doesn't want your dime that day). The more pliable the auction, hypothetically the more room you have to pick a bid strategy that suits you.
Case by case, it gets interesting. Take, for example, an account where you figure you've done a great job whittling average CPC's down to 23 cents. Now on a lot of the keywords that you're getting for 15 cents, you're not doing great ROI-wise, but you're reasonably content since the price is low by historic and industry standards, you don't feel like risking the effort to go down to 11 cents.
I think the bid simulator may be helpful in helping advertisers decide when to take risks like that. Shaving those few pennies on lukewarm keywords, across several hundred keywords and a thousand clicks a day, can add up to a lot of saved cash you can then turn around and devote to better performing keywords or channels (or simply, profitability).
I'm told that the Bid Simulator is now in limited release. So despite the fact that you may see it in your account or several client accounts right now, it's not in full release by any means. Its impact on Google's revenues, and advertiser performance, isn't likely to be felt until 2010.
"Old school" PPC auction jockeying may not be everyone's idea of fun - but different strokes for different folks. We're also keenly interested in when Bid Simulator data might be available through the AdWords API. This might be helpful for (for example) running dramatic one-day volume tests across an account, based on more keyword-by-keyword auction intelligence to help decide where to shake things up.
My, how well organized Google was to announce their new behavioral ads in content targeting offering.
To the public at large, VP Product Management Susan Wojcicki provides the official explanation of why digital advertising is good, how Google tries to make the ads relevant, and what behavioral targeting is going to entail. Above all, this part of the announcement scrupulously covers the privacy principles and the user control and opt-out elements of Google's advertising technology.
For AdSense publishers, a good-news announcement that advertising will continue to reach more relevant audiences, and a brief allusion to settings in AdSense accounts that deal with the new capability.
And finally, the piece de resistance: what about the AdWords gang? For the paying customers, the advertisers, a post on the Inside AdWords blog explaining that this program will be in beta for several months and that it will be expanded "later in 2009." Product manager Aitan Weinberg writes about this offering "helping you to better reach your campaign goals at scale." Concisely put, and that is exactly what we're looking for out here in advertiser-land.
It's hard to imagine any company covering the communications bases as well as this for a product that won't be fully rolled out for 4-6 months. Google, if you were expecting a major firestorm of controversy about your announcement, I have to apologize in advance. It just isn't going to happen.
Well, it took 18 months to gestate and another few months for final proofs, printing, and machinations to unfold, but the totally-updated, hot-and-fresh Second Edition of Winning Results with Google AdWords is now in the house! And available for purchase on Amazon (I expect it to be in stock there by week's end) and in finer bookstores. "This book is a must-read for all marketers over the holidays!"... so says its author.
Quality Score = SEO. That's the oversimplified version of things being shared around by some marketing advice-givers of late.
Ask any key Googler on the paid or unpaid search side, and they'll readily admit something like "for both the organic search algorithm and the paid search ranking system, we look at very similar signals."
That's not the same as saying the AdWords program responds well to "SEO," however. Landing pages serve a very different function in paid search campaigns. You don't have to perfect them with SEO principles, and you'll very rarely get a major ranking boost from using SEO principles. You'll still predominantly rank well if you (1) have a high CTR; (2) bid sufficiently high; (3) create a strong relevancy pattern by associating the most relevant high-intent keywords with relevant ads and relevant landing pages.
Strictly dealing with the landing pages themselves, though, don't go overboard worrying about their impact on Quality Score. The wrong landing page can give you a poor Quality Score, for a variety of don't-be-evil reasons. Google does attempt to look at the page content, and will measure user responses such as bounce rates and back-button-hitting. But you don't have to twiddle around with keywords in headings and stuffing keywords in body text as if this were SEO circa 1997.
Powerful campaigns with real patterns of satisfied user behavior are "relevant enough," even with the basic elements of relevancy present on the page. Additional relevancy is likely not gained with keyword stuffing efforts. Outdated efforts to game QS with SEO principles only take away from real user response testing - pleasing navigation, persuasion, and testing that can improve conversion rates (without gimmicks and superstition).
The folks to say "AdWords = SEO"... they may be in the ballpark, and they haven't totally struck out, but the analogy is a foul tip into the bleachers, at best.
My sources just informed me that Google has pulled out of the advertising agreement with Yahoo, citing regulatory interference.
Although it is a short term loss to Yahoo's bottom line, I believe ultimately it's healthier for competition to keep the two companies more at arm's length and for Yahoo to continue to develop their own, proprietary platforms.
Sourcetool's owner suspects that Google simply doesn't like the site because it is "another search engine," or because it competes with Business.com, a Google partner.
I doubt this is it.
Anyone with experience in the game can sense what Sourcetool is, and that sense would be augmented or confirmed by a peek at the mix of destination URL's within the AdWords account, no doubt: it's pretty much straight click arbitrage.
It does bring up another point. I just completed a fairly extensive discussion of this here in Winning Results With Google AdWords (2nd ed.), but that won't hit the shelves for a little while, so the capsule summary is this. Yes, there are muddy middle grounds, since many businesses are making a living off arbitrage in one form or another and you can't shut everyone's ads off! And there are cases of mistaken identity in the thin-slicing that an algorithm does to attempt to catch bad guys.
But here, Google isn't just stereotyping or rushing to judgment. Google knows who the person is, knows what the site does, understands the strategy fully, and has consciously decided to ban him from advertising, at least at regular prices. That's not an algorithm talking. It's Google's policy. And antitrust law or not, I believe this is their right.
In short, Sourcetool is in good company -- or in Google's eyes, bad company. It isn't being harassed because it's a "search engine," it's being harassed because it's a scraper-cum-arbitrage site. It contains little or no unique content, and the means of creating a high volume of pages is automated. Google does not feel that these are valuable kinds of sites, and that's been confirmed right out of Eric Schmidt's mouth, to large gatherings of journalists, since 2005 at least.
I can come at this from a few angles, and probably will, in the coming months. Today, just one piece of the puzzle to address: efficiency for both the advertiser and Google.
First, some background assumptions:
1. New advertisers (and unevenly-engaged advertisers returning to refresh their memories) do keep pouring into the space, especially internationally. The optics of high minimum bids don't look good. They're alarming and off-putting to newbies.
2. Google likes its black box, and likes to avoid black-white distinctions. Building very flexible (read: confounding) architecture helps Google achieve a number of goals. And even those goals are subject to change.
3. Yet Google faces pressure for additional disclosure. So for every layer of complexity they build in, they try to offer up at least an equivalent step forward in terms of disclosure.
4. At Google AdWords, CTR is king. Clicks drive revenue, and continue to be a reasonable proxy for relevance. This is the biggest constant since 2002.
5. The platform as it stood at version 2.6 (my nomenclature), contained pockets of inefficiency. It did a good job of ramping up the "quality" bar, to the delight of users, but as even Sergey sheepishly admitted to investors, they might have "overtightened" the calibration of the platform, showing too few ads for advertisers', Google's, and investors' taste. The new release is intended to offer Google the ability to "untighten" selectively, without giving anyone the satisfaction of being able to point definitively as to exactly how that is being achieved.
The "pockets of inefficiency" buried in the fixed minimum bid regime were evidently ferreted out by smart Google engineers who realized that fixed minimum bids for keywords were too rigid. Rather than determining that a keyword in a given account should be "all on" or "all off" no matter what the context, Google has designed the new system to give keywords a fighting chance to show ads in all cases. (The official explanation is that no keyword is ever technically inactive for search.)
Quality Score is now determined in real time, per query. But wait. Don't think that means the only negative thing that happens to a Low-Quality-Score keyword is that it's relegated to a Very Low Ad Position. No, it can still be inactive at query time if it fails to meet what Google is calling a Bid Requirement. (Among other things, this gives Google an excuse to charge high prices for clicks in some instances, even if no other ads are showing up on the page.) What's different in this version is that the same keyword is eligible to be re-evaluated for the next query, and the one after that. So like the parrot in the sketch, it's not dead, just resting.
Let's be especially clear about this much: keyword quality (whose formula is outlined in Google help files, but clearly rests on measures of CTR history as well as predicted relevancy, especially for newer accounts with less data history) will determine both where your ad ranks for a given query, and whether it is eligible to show up or not at query time. So "fighting chance" and the "chance you might show up" even on a low quality keyword, some of the time, doesn't mean the same as "free for all." Advertisers aren't being encouraged to "go to town" with unrelated keyword experiments just to "see what sticks" -- in fact, that tactic is as bad as ever, because this can hurt account-wide quality.
Through all of the complexity of the explanations you'll read, then, and the potentially excessive focus on some tweaks in reporting (scale of 1 to 10 transparency for Quality Scores) and projections (First Page Bid estimates), the efficiency angle, and Google "shading" its quality initiative to make it more flexible and subtle, is the main story here.
And not a moment too soon, I'm guessing. By Google standards, the months of July and August were likely slower than they or investors would like. By notching up revenue in September, Google can turn in a respectable Q3. (Especially internationally, I'd expect to see click arbitrageurs given some respite, and getting a chance at more clicks - raising Google's revenue, but lowering overall search quality.) By the time things are off to the races for Q4, Google can always tighten things up slightly from a quality standpoint, and raise prices at the same time. If you asked, I'd predict steady-looking year-over-year revenue growth in Q4, with a bump in profit margins. Investors will cheer, and Google (GOOG) stock will head back to $700.
Is this how it goes? The PR machine starts to roll *after* you've made more money than you'll ever need?
This just in: Google is seeking AdWords testimonials. Success stories. Some that you might even want to "share with the press." (Did someone attend a marketing seminar over there?)
It's beyond doing good stuff with campaigns, though. It's about how AdWords "changed your life". (AdWords is lucky it is not a mobile device, or, for every one part "it changed my life," you'd see ten parts of those Corona ads with someone deciding to chuck that sucker into the ocean, and kick back.)
Q. How has AdWords impacted your business and personal life?
A. It is my business. And personal life.
Q. Has it allowed you to expand your business?
A. See above.
Q. Become an entrepreneur?
A. Um, I'd like to think I was that before AdWords. But while we're on the subject of wild west entrepreneurialism, remember the good old days when we could bid on all kinds of keywords without thought to quality scores and predictive algorithms?
Q. Quit your day job?
A. I have never had a day job. At least, not prior to AdWords. So thanks for nothing, AdWords, I now have a day job. My parents are very proud.
Those who know me all to well are aware of my irritating resistance to the word "pop up" in connection with Google AdWords ads.
That was one of my many suggested corrections to a recent story on Google ads over at The Register, for example.
My take is that slipping the term "pop up" in journalistic pieces about Google (as in, "and for only a dollar or so, Mr. Neufeldt's ad would pop up on Google when searchers typed the words 'truck tires'...") is part of an ongoing, insidious campaign by sellers of traditional advertising to associate (still, to this day) online targeting with things that go bump in the night. (Or something even worse, like annoying pop-ups.)
So when the casual conversation here in the Traffick Living Room on a Saturday turned to my spouse's observation that "I don't see Google ads pop up very often when I use the search engine in South Africa," I had to interject: "bup! bup! bup! waait a minute!"
I know, it's irritating to be around me, but we can't take this shit lying down. :)
Ads on Google searches "appear," "show up," "come up," or "are displayed." Or are simply there. They never pop up!
So a man got 668 clicks on his ads through one portion of his Google AdWords, and zero conversions. And for that, it's seen as good enough reason for a lawsuit. Ever heard of testing?
I'm no lawyer, but it looks like the complaint is shoddily written and inaccurate.
The thinking here is that the suit has limited merit because:
There is little truth to the claim that the ads had "little or no chance of converting." Since Google made breakdowns of parked domain clicks available in a specific reporting feature, although it's certainly uneven, I've seen evidence that these channels convert about as well as other content.
Google, unlike their competitors, reports separately on the performance of this inventory. And allows advertisers an opt-out of whole categories or channels of content.
Google also allows you to "negative out" undesirable sites and IP addresses. It is taking what I see as reasonable measures to offer more control to advertisers.
No, the program isn't perfect. Among other things, some of the ambiguous inventory is stuck in the "search partner" network where breakdowns and opt-outs aren't readily available (but just contact your Google rep and you can work around the problem, likely). A Googler recently told me that better reporting and opt-outs for the "search partner" network is forthcoming in the next few quarters.
When a certain kind of data is really close to your heart and mind, you'd like to think that some leading indicators are just too blatant to dismiss.
To date, "Internet-inflated" political campaigns have often had that easily punctured quality to them. What turned out to be niche candidates had disproportionately strong donor bases and loyalties through cliquish but still impressive online channels. They got puffed up a bit in the early going, then proved to be paper dragons in the end.
The field is fast evolving, however. Top candidates today are employing real online marketing tactics to boost already solid campaigns, pushing themselves over the top with savvy, controlled, and tightly measured spending of campaign funds on the ads that we here know and love so well: paid search and contextual ads.
ClickZ News is reporting that the Barack Obama campaign spent a cool $1.7 million on Google ads in February alone.
I'll also go out on a limb and take this as a leading indicator for an Obama victory in November. It just doesn't seem that much different for me from customer acquisition in retail and B2B. Companies that are already strong, who add this targeted channel to their mix and pursue it aggressively before their competitors catch on, tend to pull away from the others. It isn't magic.
The only roadblock I see that could prevent this from happening would be a low turnout among youth voters. And by youth, I mean the entire 18-44 demographic that is currently most impacted by the online ad strategy. With unprecedented turnout in this demographic, Obama would win in a cakewalk. Without it, he could actually lose to McCain.
Hard to say what impact the wildly popular "Obama Girl" videos might be having on the candidates' fortunes, but again, if you compare what is happening -- and what *can* happen -- for McCain or Clinton at least in this social media realm... well... this Obama thing feels like a movement; yes, as some have stated, on a par with JFK (or PET for you Canadian viewers).
When you're setting your country choices in Google AdWords campaign settings, you may notice some new functionality. A handy map will visually display the countries chosen; and you can select countries in "bundles" such as "US and Canada," "Western Europe," "Latin America," "Caribbean," etc. A real time-saver as opposed to hunting and pecking from a long list.
I don't see this on Inside AdWords, so it must be new. I just stumbled on an opt-out functionality for the content network, being beta tested currently.
Two types of "content exclusion" have been added alongside site and page exclusion options: (1) topics; and (2) page types. Under "topics," advertisers will have the ability to opt out of certain types of content, like "edgy content" and "death & tragedy." More benignly, page types you can exclude include "image sharing" and "domain ads."
Wow. And in the opt-out interface, Google is really hitting me over the head with the recent conversion stats on some of the different types. In the campaign I chose, domain ads did just fine today - outperforming the campaign as a whole, in fact, from an ROI standpoint. There's no point in disabling something if it actually works, obviously!
So be cautious when this launches. If content is working fine for you, of course you'll want to avoid unduly limiting your exposure in the universe. In fact, if you can exclude unwanted content types, it might be wise to raise your bids on the rest.
For advertisers concerned about showing up in unwanted places, this is great news. Also great will be the fact that we'll be more armed with the facts about ad performance on different types of content. Heat gives way to light.
Litigants in anti-Google keyword cases such as this latest in Australia speak in one-sided "baby talk," acting for all the world like Google has set out to deceive and wrong them personally. I'd call it "food fight tactics," if I'd ever witnessed a food fight mostly involving applesauce, but I haven't.
This complainant blithely accuses Google of sneakily "selling off top spot" in spite of its reputation for ranking results based on relevance, not money. The sponsored results supposedly appear "in the same format" as search results. Car dealership Kloster Ford was "outraged" by its competitor's conduct... and hence, the ensuing lawsuit and brouhaha. Too bad for the complainants, but the outrage was not backed by, at least, brussels sprouts, or other food you can whip at someone, because applesauce thrown in anger is still applesauce. It was also not backed by facts or sound argumentation.
The overinflated sense of outrage and weak argumentation reminded me of my penchant for the helpful if opaque works of Jurgen Habermas, particularly his late work Between Facts and Norms. If the ideal for better understanding and progress in any problem-solving exercise is what Habermas might have called a "discursive situation," Habermas can argue that "communicative power" is merely pushy coercive power based on bluster and sometimes backed by money or illegitimate influence. "Real" power as embodied in the law (as it should be) would emanate from a discursive situation. Winning in a legitimate court case based on a proper weighing of facts and ethics as generally agreed in legal codes would be "legitimate power."
Luckily, Google wins most of these cases. Apparently, in many jurisdictions, "I was outraged" and blatantly manipulative descriptions of how Google "sells off top spot," are trumped by the more accurate argument that accurately describes the real workings of Google's advertising program, and the legitimate right of advertisers to buy space online.
At the entirely opposite end of the spectrum, I then read a nice piece by Mike Grehan in Larry Chase's WDFM newsletter that focuses heavily on trends in search and how Google Universal Search presents results to users based on search history or apparent intent. There is far from a single "list" of "most relevant" results in a given format. So kudos, Mike, for presenting deep-seated facts which lead us towards a "discursive situation" about search and ads, thus staying on Professor Habermas' good side. In an ideal society, the legal system would take account of such facts. Most modern legal systems attempt to do so, fortunately.
That's the t-shirt many paid search auction-grapplers have been mentally wearing for years.
In a few weeks, Google will be going live with a slightly altered version of the AdWords auction. Group Business Manager for Ads Quality, Nick Fox, was kind enough to go into considerable detail outlining the change, which as usual has been misinterpreted somewhat here in the ventosphere. The most common dismissal of any change Google has made to AdWords is "another cash grab by Google"... which I guess looks like a clever dig in pixel form, but I think the changes are definitely more interesting than that implies. Many of those comments tend to emanate from sources who still think all clicks should be free, so take them for what they're worth.
1. The Simple Explanation... Past vs. Present a. OK, so the explanation isn't that simple if you've been doing this for awhile but not paying much attention, because Google has changed the way they sell the top-position "premium" ad slots several times in the past few years. Several years ago, the first major change occurred when Google started, then stopped, selling those ad positions completely separately on a costly high-CPM basis, using a dedicated sales team, 6-month insertion orders, and the whole nine yards. That was convoluted to administer -- and more importantly, divorced that type of ad buy from Google's traditional AdWords formula that focused on ad relevance and quality -- so they discontinued the practice. The top slots more or less joined the regular auction, but they remained distinct in look and feel, and were great to achieve due to high CTR's, high volume, and sometimes, higher conversion rates.
b. However, Google then began to experiment with how many ads it would show in those positions, and by and large, placed a higher threshold of quality [prior to August 2005, CTR (click-through rate) was the only measure of quality] and CPC (cost-per-click) before it would elevate an ad to the premium area. The exact thresholds were never publicized, but typically, ads with actual CPC's below .75 had trouble making the grade for premium positioning. Ads with CTR's below the averages for the keyword or industry sector had trouble making the premium spots too. I'm guessing Google tweaked the formula several times.
As Nick Fox told me today, because (1) "these ads get more attention from users," and (2) "push organic results lower on the page," to say nothing of (3) "being particularly valuable for many advertisers," it's important for Google to find the right balance here. Above all, the user response to the ads is paramount. Users must not become turned off by the overall perception of quality in their day-to-day use of the search engine.
So until now, the function that determined whether an ad would show in a premium position or be placed in the right-hand margin was weighted heavily towards quality score, but also included actual cost-per-click. That made it different from the rest of the auction, which went on the basis of quality score and max bid. Max bid can often be much higher than your actual CPC because of the discounter built into the pricing method.
c. Now, there will be a small change to the formula. The downside of the "actual CPC" part of this was that it stopped certain advertisers from getting in premium slot due to a lack of what Nick Fox called "auction pressure." Other advertisers simply might not have been present or bidding high enough to push the actual CPC up enough for the leading advertisers to qualify for premium spots. Worse, I'm guessing that this might mean that slightly lower-quality ads could creep into premium positions, because they *did* pay more on an actual basis. They wouldn't be *poor* quality ads, but they might not be the highest quality. This actually reveals a flaw in the previous formula because it unwittingly relaxed quality standards slightly in the area where it should have been heightened.
My interpretation here is that advertiser control and overall user satisfaction rise with this change, but yes, it does seem that some advertisers might experience price increases.
2. Unforeseen complexity.
Unpredictable effects might occur to some advertisers who find they suddenly get promoted to premium position, or who have been bidding very high and changes in the auction dynamic cause other advertisers' positions in the auction to change.
Will you pay more in those cases? Probably, if your actual CPC has in the past been coming in below what the new minimum price for premium placement is set at.
What, did I just say "new minimum price for premium placement?" I don't want to put words in anyone's mouth. There is no set reserve price that Google is implementing here, but rather, a dynamic minimum that is a little bid difficult to grasp at this stage.
I guess the throbbing feeling I have in my brain about now comes from the fact that by adding this wrinkle, Google appears to be adding a second "minimum bid" - I'd liken it to a larger rung partway down the auction ladder. If you qualify to be in the premium slots (let's call this the treehouse), then you can stay up there, but you'll potentially pay more. The rope ladder down to the ground has the usual auction dynamic, but if you fall below that familiar minimum bid, the bottom rung on the rope ladder breaks and you fall into a big pile of leaves on the ground (out of the auction entirely). Potentially, your best friend's dog, Scrappy, licks your face as consolation, while you muster the courage to "improve quality or bid higher."
The minimum bid to be on the rope ladder (active in the auction at all) is *published* right next to the keywords in your AdWords account. But it doesn't look like your price of admission to the treehouse (the premium positions) is going to be published. One minimum bid, disclosed; the other, not. And a real dilemma for Google as to how they could possibly publish that given the limitations of the AdWords user interface as complicated as it now is.
So while the change may be minor in practice, advertisers are counseled to watch their bids, particularly if they've mucked about with high maximum CPC's (aka bids) in low actual CPC zones. You might begin paying more than that low level you've been accustomed to, in those cases. You should always be prepared to pay the full amount of the max bids you set, so it's never a good idea to bid wildly high, counting on a lack of auction pressure to make up for your laziness in bid management.
Let's ditch the passive voice, just to be clear. I counsel you to watch your bids!
I've noticed that Google's emphasis on the radio ads marketplace has been particularly strong - even amidst all of the other things they seem to be pumping all at once. Some client accounts have this tab visible (Account Snapshot); others, that tab (try this beta); and others, still, the other (Radio Ads). Or so it seems.
Google's testing a lot of stuff right now, but you keep hearing about the radio part.
I wonder why?
One reason seems to be the surprising growth of radio in the United States. As the most urbane members of the Creative Class and Yelp Gen have completely neglected to notice, "extreme commuting" has become ever more rampant in the U.S., as noted in a riveting recent piece in The New Yorker. As Nick Paumgarten, the author, points out, the long car commute is often very lonely. You have "cup holders for company." And the likelihood of you listening to the radio: increased. Think Google knows something?
You know you're doing something right when a speaker hanging out in the green room here at SES NYC unplugs his laptop and wanders over to show a fellow marketer a marketing campaign, as sort of a 15-second case study. This Coffee Fool appears to be a fairly heavy user of contextual advertising at the moment, showing up adjacent to GMail and such. (Not a really surprising semantic match given that you probably type a lot of messages like "meet for coffee?" in email.)
I'm not sure what "coffee secrets" are really "exposed," but hey.
Disclaimer: I don't endorse or know much about their marketing methods. I don't know the company. I just noticed them.
Very important disclosure: I was not paid to post this!
Google refers vaguely to the "need for a new look" in shifting their top sponsored ad background color from blue to yellow today. Were CTR's declining? We know that rotating ad design in banner campaigns sometimes props up CTR's. Personally, I haven't seen much evidence of declining CTR up there at the top, but you never know.
Another significant shift is not triggering a clickthrough unless the user actually clicks the link. It's been a bit cheesy that clicking anywhere in the box caused a click. So the result of this shift should be a noticeable improvement in ROI out of the top ad spots. Fewer clicks, but more clicks that meant to click.
In a brief chat yesterday with Rob Kniaz, product manager for Google advertising products, I learned that AdSense publishers will be able to add the pay-per-action units in addition to their current AdSense (CPM or CPC) ad units. They'll be able to shop for potential offers in a variety of ways, either by selecting a specific advertiser's offer or by incorporating keywords into their code and letting Google's system smart-match from their advertiser list.
From the advertiser side, there will be a dedicated interface that allows them to upload creatives as well as the parameters for payout (eg. $3 per sale; $35 per lead, etc.). I'm waiting to see the full implementation, but at this early stage it looks like there will be a couple of things to look out for:
Verification of the actions is a key concern. I always argued that cost-per-action was no panacea to the verification issues around CPC or CPM based advertising. To be sure, you can't fake a sale if money changes hands, but a no-good publisher or random vandal could certainly potentially generate low-quality or fake leads. As with pay-per-click, it's not quite good enough to argue that advertisers should lower their bids accordingly, since the impact of bogus activity could be quite uneven.
How are these outcomes going to be tracked? I assume through Google Analytics, Google Conversion Tracker, or Google Checkout.
As such, it does certainly expand the Google footprint in all of these areas. It also confirms that the introduction of products like Checkout were not disjointed experiments but rather part of a broader overall strategy that is only being shown to us gradually.
There are some clear positives in this experiment. In potentially opening up a CPA marketplace to all of its several hundred thousand advertisers, with tens of thousands of publishers on board as well, it instantly gains the clout of a service like Commission Junction or Amazon Associates, but with less friction and lower cost (and over time, greater variety to choose from, for both sides in the transaction). It gives publishers a new way of experimenting with maximizing their monetization efforts (with better targeting, not user overload as shown in the last post), and allows advertisers to explore a new way of buying content-targeted exposure through Google. Put another way, it allows merchants to set up an "affiliate program," but with considerably less hassle than with other affiliate systems.
To be clear, the cost-per-action test has nothing to do with the search results or ads next to them. It's an additional marketplace being built to facilitate cost-per-action ad payments between AdWords advertisers and AdSense publishers.
CBS Marketwatch is ahead of the curve with this item. Google is releasing more detailed information about click fraud. Last time around, they were somewhat transparent in their approach as they chatted with Andy Beal. However, some stats never got fully examined - so now Google is redoubling its efforts to explain both the magnitude of the proactively refunded clicks (it amounts to over $1 billion per year in forgone revenue), but also the relative tininess of the proportion of clicks that get refunded by request in investigations after that (below 0.1%, well below). Recently I had an opportunity to speak at length with Shuman Ghosemajumder to discuss some of the stats and also Google's fraud detection methods. IMHO they have some pretty interesting tricks up their sleeve on the detection front.
Having gone over some of their info so far and reflected on how it squares with current opinion in the industry, I just completed an audio interview (a PZCast to be exact, hosted as always by Mona) with some detailed comments on the click fraud controversy. The MP3 file will be posted to the member area for Page Zero Advisor subscribers by noon Thursday. If you listen, remember as always, the initial 90 second throat-clearing banter is only outdone in its inanity by the official banter lasting three full minutes. Fast forward past both if you prefer content to yuks.
Excuse my giddiness, but it's definitely addictive to look at your keyword quality scores. You could have guessed them before by the assigned minimum bids, but these are fun to look at anyway:
Yet confounding, too - no doubt seeing this stuff will cause some advertisers to overthink and to try to divine the impossible. The one with 5.1% CTR today is called "great" but there is one with over 10% CTR that is being assessed as merely OK. Presumably, that's based on some predictive stuff around the generic nature of one of the keywords (the OK one is too general maybe). And presumably it would only be a few hundred more clicks over a week or so at a high CTR and it might kick into "great" territory. We'll see. I guess that would be my advice in the "avoid overthinking" department: realize that an established CTR history will give you a more stable quality score than the stuff you see on new keywords.
I also think it's cool (laugh if you like) that Google makes it slightly difficult to display this, so it doesn't confuse newbies. You have to drill down a fair bit to find the place to turn on QS info.
At the campaign summary level, if you click on "customize columns," the only non-default column you can add here is "CPM." (I find this cool too. You don't need to do the math - you can measure the eCPM on your campaign by enabling it in the interface. On this ad group - a brand new campaign - we're getting a rock-bottom $0.85 CPM. So far, so good!)
Anyway, once you drill down past the ad group level to the "keywords" tab you can "customize columns" and enable the extra quality score information in the interface.
Speaking of new stuff... at the bottom of your keyword list in the available options is a button for "pause" and "unpause". Shut up! I'm pretty sure Google slipped this in without telling us. Some time ago they added a feature that allowed you to pause an ad (handy for testing and sharing info internally), but this pause a keyword was something I'd been hoping for. Heck, who knows what you'll use it for, but power users always come up with something.
UPDATE: OK, so via the Inside AdWords blog I see the "pause keyword" feature was added on Thursday. I spent Friday on an airplane... So by now it's still only five days old. And my spidey sense tells me that my colleagues here in the office are already pausing keywords! LOL, gotta love 'em. The "pause ad" feature was added some time ago, as I recall.
Kevin Newcomb's take on the latest incremental update on ads quality. As Kevin does, I interpret the changes to mean an increase in transparency (obvious, because that's what Google tells us); and a more relaxed minimum bid status for "unknown" type new keywords where Google has little data to go on. Here, they might be less likely to punish you for the trends seen with other advertisers trying similar keywords for similar offers, and let you create your own good or bad track record on your own. (It's not a black and white change, more of a tweak in emphasis.)
At the same time, they also allude to the new algorithm being tougher on bad ads and nicer to good ones, so basically just further refinements based on machine learning and so on. If you're on the receiving end of the additional toughening up, it'll hurt even more. The majority of advertisers will likely feel the new regime to be slightly more liberal.
The increased transparency will lead to more questions. Once I'm absolutely sure of what keywords or groups of keywords are low quality, how should I respond. Google explicitly advises that you do not raise your bid, but rather, optimize your campaign. (So much for the "cash grab" theory.) And they point in particular to the relationships between your keywords, ads, and offer. This is what I was getting at in the last post.
Creating more granular campaigns will potentially boost quality for those who do have available content and offers on their sites, but who have been lazy in how they build the campaign structure, for whatever reason.
What still confuses me is how Google can know what score to apply if you're running a complex test that includes multiple ads and multiple destination URL's, where you're actively trying to understand the best places to send users on the site, the best wording to use in ads., etc. for any given keyword. Or does the mere act of doing more systematic testing of this nature possibly give you some brownie points? I think I'll have to ask them about that. By and large, I think the answer is this: the system is designed to be punitive to campaigns that have some aspect that falls really far outside the normal, relevant, user-friendly range. Most campaigns are going to run unimpeded, or in other words ranking and status are largely based on the old standbys of historical CTR and your max bid. That's what I call AdWords 2.0. The current iteration, 2.7, is probably not too far from 2.0 for the vast majority of campaigns, keywords, ads, and sites.
In one of the paid search sessions yesterday here at SES London, one audience member gave his account of the "death spiral" that seems to afflict certain keywords in his AdWords account. "I wake up and Google's asking for £2.50 for a keyword, so I raise the bid. The next day, they've put it up to £5.00. (etc.)."
Obviously this is a signal that the relationship between this keyword, ad, and landing page is seen as "very low quality."
So I asked roughly what industry he was in - turns out it's related to debt relief. The keyword in question? "Lottery tickets." Yup, I thought to myself - in the new Quality Based Bidding regime, that's seen as just too far off the mark in terms of relevancy to the service being offered to the consumer.
This might have fallen flat at any stage of AdWords history, though, by virtue of the low CTR it would likely attract. A "popular culture" type word (people looking up lottery listings is a very common navigational function) will be so high volume that the proportion of users who are thinking "transactionally" and willing to check out an offer is so low that it will lead to a CTR that is below any threshold of reasonability as far as today's PPC auctions go.
You admire the lateral thinking here: people desperate to dig themselves out of debt might be more inclined to buy and look up info on lottery tickets. If so, then an advertiser should probably try to get placement on relevant websites through direct media buys and various banner and text ad targeting tactics (one being Google's Site Targeting option).
But you'll have much more trouble doing this type of "loose targeting" if you're using AdWords and Yahoo Search Marketing, unless of course you have a strong, established CTR and user experience history.
So is an ad for debt relief next to search engine results for lottery tickets really "low quality"? Yes, moderately so, because in the user's eyes, search is special. They want even the ads to be tightly targeted, or let there be no ads at all.
Google is no doubt going to continue to modify the Quality Score algorithm to fine-tune the balance between advertisers' needs and the user experience. Stay tuned.