Joel Pinkham

Google has just announced Enhanced CPC bidding

As days go by, I’m losing trust in Google’s bidding methods and feeling like I need to use a third party bid management tool. But let’s take a look at the options we have using AdWords:

1. CPC Manual Bidding
2. CPC Manual Bidding with enhanced CPC
3. CPC Automatic bidding
4. Max CPA
5. Target CPA

I’m not even going to bother talking about Manual Bidding (it’s obvious), Automatic Bidding (never, ever use this) or Max CPA (why would you use Max CPA when you get use target CPA?).

Enhanced CPC

You set the bids and Google tries to assume if the actual users search query is more likely to convert (which makes smart bidding).

Advantages

• Individual bids for a lot of different search queries  – your keyword listed in AdWords will match a multitude of user search terms. So instead of setting up a huge campaign with a lot of exact match terms with individual bids, it does that work for you
• It finds patterns it what converts – let’s say your keywords are “gifts”, “birthday gifts” and “gifts for dad”. Enhanced CPC might find that when the user adds “buy” to their query they’re more likely to purchase, and when they add “ideas” then they’re less likely. You might be bidding $2 for “gifts”, but when someone searches “buy gifts” Google puts your bid to $3, or when someone searches “gift ideas” your bid goes to $1

Disadvantages

• You give Google permission to increase your CPC at their will, based on their assumptions (they say it won’t raise for cost-per-conversion, but of course it would for your high performing keywords)
• Google makes assumptions very quickly – they can get it wrong to start with

Target CPA

You set the end amount you want to spend on a conversion at an ad-group level.

Advantages

• You don’t have to worry about bidding and Google “tries” to meet your conversion expectations
• Let’s you focus on things like creating new ad groups & testing new ad copy – where you (as a person) can add real value
• Computers are smarter than humans when it comes to calculation

Disadvantages

• It starts out bad – everytime I’ve started using Target CPA on a campaign my CPC gets massive. It comes back down but overall not all that trustworthy
• You’re relying on Google to maximise your revenue, when they also want to maximise their revenue
• You could actually be better a better cost-per-conversion but the system will push your bids up to your target (meaning all of your ad-groups need

In Conclusion?

I’m testing out Enhanced CPC now on 1 of my campaigns, and will see how it goes. Target CPA needs time to really test out but none of them really match ROAS bidding like you can do with a bid management tool.

Probably the most cliched topic in blogs over the last week and I’m pretty late on the uptake. But how could I not write about it?

When I first heard things about Wave I was sceptical of revolution, but new it had to be good coming from Google.

I’m going to assume you know enough about what Google Wave is before I have my rant, if you don’t then I strongly suggest you see the very, very short (1 hour, 20 minutes) video on YouTube about it (embedded below).

In short, it reinvents the way people communicate pulling together email, instant messaging, social networking plus any kind of sharing and collaboration into one place. Our as they describe it “What would email look like if it was invented today?”

It looks pretty amazing, I gasped with impressiveness multiple times throughout the video and I’m a nerd.

So what challenges do I speak of?

For it to become truly revolutionary, it needs to replace the way we do business. The corporate world will be the main thing that slows down Google Wave spreading. If we use it at work, people have to know how to use it.

Firstly there’s the IT Managers

These are the people that Microsoft thrive on, and Google are yet to crack. The almighty Corporate IT Manager. Most of these guys sit in Microsofts back pocket, I wouldn’t be surprised if there was a kickback system in place.

While we are progressing in tech savvyness,  the majority of people are still afraid of change when it comes to technology. Google Wave means huge change to everyday work, which will upset a lot of people. IT Managers always try to make everything smooth, and think that if they’re unnoticed then they’re doing a good job.

I don’t think they’ll have the balls to adopt Wave for a long, long while (which in tech years would be at least 4 years).

Enterprise providers who won’t go down without a fight

Google Wave will remove the need for private network links, software licensing, powerful computers and servers. This will piss a lot of companies off, a lot of big companies who won’t go down without a fight. Not sure how they will justify their costs, but I’d say if the likes of Microsoft, Verizon, Cisco and IBM banded together to keep things they way they are, they won’t be a pushover.

So what is so great about Wave anyway?

There’s too much to talk about, just watch the video.

Bounce rate will impact your search rankings. We can never be certain about how search engines rank pages – but here’s my logic on this…

The problem with most SEO’s is that they are focussed on getting rankings. Sometimes the easiest way to get rankings is using ‘techniques’. More and more often though I see search results rankings that can not be explained by SEO techniques. Inbound links, title tags and good quality content are of course important, but certainly not the be all and end all.

Let’s take a step back here.

What is the point of a search engine?
To help a person find the information they are looking for.

So, when a user types something in they want to find something related to what they typed in.

What is the point of a search engine ranking sites?
To help a person find the best possible information for what they are looking for.

So logically the order of search results should show the best site, with the best content, and the most relevant to a persons search words.

OK, that’s obvious – what’s my point?
The best site has content that the person wants and is easy for them to get.

The trouble is that Google is not a person. It’s pretty close, but at the end of the day it’s an algorithm. It needs to a way to logically determine which site is best.

To measure this best factor Google is going to use a bunch of things to determine a web pages score. User experience is of course a huge factor if a human was going to score a website. Google can’t tell a good design, or if something is interactive and capitvating for people viewing. What they can measure though, is the bounce rate* of a site.

It’s a dead give away to search engines that your site didn’t match the users expectations, why else would they be leaving.

My advice is to always think about users first and search engines should be kept happy naturally.

*Bounce rate refers to the percentage of visitors to your site who leave after seeing just one page. For example, 100 people visit your homepage, and 25 of them decide to leave without viewing any other pages. This would mean you have a bounce rate of 25%

Getting onto the first page of Google for organic search results is usually going to be quite a challenge. That’s where Google AdWords comes in – and it’s the easy way to get that ranking.

However, these days are coming to an end and it seems that ranking on paid search results is becoming more and more of a challenge. Especially with a quality score to filter out the terrible ads that don’t actually add value for users.

I recently have been working on a campaign for a client – targeting highly competitive terms. I did all I could on the campaign in terms of optimisation and bid a huge amount on the keywords. The result? The ad showing up a tiny portion of when it should, driving 2 clicks a day, a huge cost per click and a ‘Poor’ quality score.

So I discussed with issue with a Google Optimiser – and they essentially said there was no solution but to wait for improvement. But in doing so they gave me a good description of the way quality score was working in this case.

Here’s a summary of the impact of quality score in this situation

• When you don’t have enough data for your own quality score – you get the average of other advertisers for that specific keyword. In my case, there are a ton of dodgy advertisers which will not be relevant for users so overall have a poor quality score.
• When there’s lots of competition, you absolutely need a good quality score to get displayed. My ads were put in the place of a bad ad and therefore not showing up.
• The only way to improve quality score is to prove that your ad is of quality to Google. You can only do this by showing valuable clicks and beat the average performance for that keyword by other advertisers.

This basically means I’m stuck in a rut, as I’m sure many other advertisers are who actually are selling a good quality product. No solution yet either.

The other day I read a story on the NZ Herald about the hard times ahead for Google. I doubt this guy really knows what he is talking about, search advertising spend can’t really be looked at the same was as more traditional advertising.

I don’t think that Google will be hit as much as Mr Pauly is making it out to be. They may face trouble with a lack of consumer buying (following through to a lack of searching), but not from marketers cutting their budgets. Here’s why:

1. Search marketing budgets are tiny compared to other media spends by well known brands
2. It’s certainly one of the most measurable – and usually profitable
3. Reducing search marketing budget is going to directly reduce revenue
4. Branding budgets are used to grow a brand – wouldn’t it be most logical to cut back on growth/less measurable expenditure first?

It’s fairly safe to say that a Google budget should be the last one cut.

By the way: NZ Herald, you’re lazy for publishing this article. If you’re not going to write your own content, at least publish articles by industry experts, not opinion columnists.

Wall Street Journal reports that Google are soon to launch a free ad-serving platform which will meet the needs of small to medium sized publishers.

With this platform combined with DoubleClick, Google will soon have even more of a wealth of knowledge about cross site behaviour of users. Between Google Search/Services, AdSense, Ad Manager and DoubleClick they’ll have their services on a huge number of websites. They’ll be able to use this information to serve ads in more effective ways. If Google are willing to take the risk on the privacy issues surrounding behavioural targeting (with a bit of caution and Google sly) this will have huge benefits for advertisers, as well as Google revenues.

Behavioural targeting is still a baby, and won’t reach small ad markets like NZ but it provides a great potential to have insanely targeted options for advertising and to serve extremely targeted ad creatives. Because of the ‘insane’ targeting options, there are of course huge privacy issues. Google already knows me too well, and this will make them know me and be able to target me that much more effectively.