Paid Search Session at SMX Advanced
In the first paid search session at SMX Advanced, located in Seattle, Andrew Goodman, president of Page Zero Media, Soren Ryherd, president & co-founder of Working Planet, and Andy Taylor, senior research analyst at Merkle | RKG, discuss trends they’ve found through data analysis and what it means for campaign optimization going forward.
Google Ads Is Shrinking Its Real Estate – Andy Taylor
First up to bat was Andy Taylor from Merkle, who has been investigating trends that Google is drastically shrinking its ad real estate. A shift of the auction and display landscape can mean a change to how you manage and analyze paid search data.
First and top of page minimums used by Google for the auction are affecting advertisers’ costs more and more. Andy went into a thorough explanation of Google year-over-year trends and how to use this new understanding of the auction to your advantage as a paid media manager.
According to Merkle data analysis, CPC growth is accelerating up to 13% in Q1 2015 (highest in past six quarters). We see this in reports across the industry. But what is happening and why?
- First page minimums in place by Google are on the rise.
- Mid-2014 (Q3), Google average first page minimum CPC bid by quality score was up by 175%
- Competition does play a role in first page minimums
- Little to no click growth on Google, while CPC increases.
- Those CPC changes mentioned above translated to a large decrease in impressions. From what we know about Google, they likely made a conscious change to how and where they serve ads.
- Although click growth is stagnant and impressions have declined year-over-year, organic traffic is actually increasing according to Merkle.
Who do these trends affect?
Users are shown fewer ads and have fewer choices. This could be good or bad depending on the user, but as Andy pointed out, Google has troves of data to determine which users want ads and which do not – which is likely a positive.
As always, Google is affected by trends on its own advertising networks and search engine. However, Google revenue is still going up and as Andy mentioned, the trends we see after the fact are usually because Google is making changes to improve their overall company outlook. Essentially, they know what they’re doing.
Finally, the trends of course affect us – the advertisers. What should we do with this insight? Andy suggested reassessing your goals, budgets and expectations. Realize that because of these changes, past performance may not provide a good benchmark for future growth. Also, don’t forget about Bing – as Google clicks go up, Bing Ads still maintains relatively inexpensive click costs.
— TODD (@ToddBowman68) June 2, 2015
Changing the Way You Analyze – Soren Ryherd
Soren discussed how we need to change the way we have been thinking now that we live in a multi-device, cross-channel advertising world. User behavior can be dramatically different across the various social channels and platforms. By not thinking of them as separate entities, you aren’t likely optimizing your campaigns in the best way. With our current thinking, out-of-channel metrics rob value from in-channel metrics. According to Soren, most of the tools and tracking we use were built for device as a person and click as the only path of engagement. Both of those assumptions and ways of thinking are incorrect; not everyone clicks on the ad and most people have multiple devices.
What does this mean for campaign optimization?
What if your best ad is one that no one clicks?
- That’s okay, if you are getting engagement in other places such as website visits, a completed conversion action, etc. In fact, it is a good thing because you aren’t paying anything, but you need to take the time to find that information out before pausing the ad, keyword, etc.
- Brand traffic should only be looked at in combination with other channels/activities/data.
- Brand is not a separate channel or its own entity. Other factors affected those (typically) phenomenal performance metrics.
How do we use financial data for optimization and to make smarter decisions?
- Work backwards from sales.
- Feed real financial data (such as sales, revenue, etc.) into optimization.
- Out-of-channel behavior shows up in the “unknown” bucket of brand and direct.
- Understanding what drives those behaviors lets you optimize campaigns better.
Overall, be smart about your optimization. Don’t forget about what happens outside of the click, and broaden your thinking of what data you should be analyzing. Think about the complexity of user behavior in today’s world, and view it as an opportunity. Embrace the complexity of out-of-channel behavior and its interaction and effect on in-channel metrics.
Don’t Take the Data at Face Value – Andrew Goodman
Andrew discussed how to take data given to you with a grain of salt before making optimization changes. For example, he turned Enhanced CPC off for a campaign, then turned it back on a short time later. The result? CPC increased (as promised), but conversion rate did not. Always analyze the data to base your decisions around, but don’t take anything at face value.
To Chase or Not to Chase?
A main question Andrew asked, and you should also ask yourself, is whether or not you should chase the ever-increasing CPC. For a lot of people, the answer is yes. But is that the correct answer? As Andrew pointed out, you should chose to buckle down and focus on profit, not buckle down just to chase an increased CPC that may not affect your bottom line and ROI. The Auctions Insight Report in AdWords can give you more insight into CPC, what is really working and where you may want to make adjustments.
Is Demographic Bidding and Optimizing Worth It?
Again, Andrew discusses how to take your demographic data with a grain of salt and make sure you are considering all factors that may be affecting or altering the data. Ignoring this data could lead to worse results. You want to optimize, but just be careful not to over-interpret.
- For example, dayparting has time zone issues that unfortunately will affect your data (i.e. analyzing as Eastern Time, which doesn’t take into consideration Pacific).
So, what should you do? Use a “long view” (for example, 52 weeks) and make sure you are using the right KPIs. You want the ability to report on and analyze revenue data, so setting up the correct conversion actions and knowing your key performance indicators are so important.
Andrew wrapped it up with the thoughts that PPC is a powerful growth engine, but pick your battles. Focus on what you can be sure of as you optimize and curb your enthusiasm for outstanding performance metrics.
Interested in more from SMX Advanced? Check out the #smx hashtag on Twitter, or follow along with me as we blog and live tweet the sessions I attend.