Testing is a core component of pay-per-click advertising. Regardless of strategy or features, proper testing is critical for determining what works and, importantly, what doesn’t.
But a challenge with PPC testing today is automation and machine learning. Say I have a Google Ads campaign set to maximize conversion bids. Even with two ads running against each other where the only difference is the call-to-action, Google will automatically prefer one ad over the other. The bid strategy will show the ad that Google projects as the top converting even if it receives, say, only 20% of the impressions.
Fortunately, Google has introduced Experiments, in three types:
- Ad Variations,
Custom experiments are the most common and are available for Search and Display campaigns (not Shopping). The experiment works by copying an existing campaign and implementing a change. For example, an advertiser could test a base campaign with an enhanced-cost-per-click bid strategy against one to maximize conversion bids.
When setting up the experiment, choose the split of traffic. Fifty percent ensures the best comparison between the base and trial. Then choose to run a cookie-based or search-based experiment. I recommend cookie-based as it randomly assigns users to the original or the experiment and restricts the variation to only that variable. Search-based allows the user to see both the base and trial on any given search. Users who conduct multiple searches could see both variations, diluting the results.
Custom experiments allow up to two goals. In the example below, I’m hoping for conversions to increase and the cost per conversion to decrease.
When viewing the experiment results, the dashboard shows the two test metrics — conversions (“Clicks”) and cost per conversion (“Avg. CPC”) and others, such as the total cost (“Cost”) and the click-through rate (“CTR”).
Advertisers can run the experiment with an end date or indefinitely — and apply or cancel it at any time.
Other Custom experiments include:
- Conversion actions (for example, optimize for purchases versus email signups).
- Display creatives.
- Keyword match types.
Ad testing was easier before Google’s Smart Bidding and Responsive Search Ads. Advertisers could set the ad rotation to “Do not optimize: Rotate ads indefinitely,” and Google would honor the request. That option is still available, but Smart Bidding largely ignores it. Responsive Search Ads allows for testing up to 15 headlines and four description lines simultaneously, often negating the need for multiple ads.
Testing landing pages or ads with a specific message is harder to execute without using Ad Variations. Ad Variations allow for 50-50 tests across ads in one or many campaigns that meet your criteria.
Say a call-to-action in an RSA is “Purchase Today,” and you want to test “Your Order Ships Today.” To test across all headlines, go to “Create variation” and select “Find and replace” in the initial drop-down menu.
- Insert “Purchase Today” in the “Find text” field,
- Choose “headlines” for the corresponding drop-down,
- Click “Match case,” and
- Type “Your Order Ships Today” in the “Replace with” field.
As with Custom experiments, you’ll see the performance change between the base and the trial. You can view the overall performance and the results by individual ads.
Unfortunately, Ad Variations does not allow testing pinned headlines or description lines unless the base ad already has a pin. Pinned assets ensure that a message will always show in the area an advertiser designates. If we set “Purchase Today” to pin in headline 2, the replacement message of “Your Order Ships Today” would also always show there. The text will change with unpinned assets, but we won’t know the headline or description line. Nonetheless, Ad Variations are worthwhile in my experience.
Other Ad Variations to test include:
- Landing pages,
- A copyright symbol on the brand name,
- URL paths.
The rise of video ads necessitates testing. That’s the purpose of Video experiments, to determine what works best on YouTube. Video experiments require two base campaigns with the same settings but different videos. For example, a store advertising the latest running shoe could experiment with two videos. The first might include close-ups of the shoe, while the second video shows someone wearing it.
Video experiments allow up to four campaigns (videos) concurrently with two metrics to test: brand lift and conversions. Brand lift measures the effectiveness (i.e., brand recall) of the ads based on survey responses. It’s especially relevant to video campaigns, which don’t typically generate conversions. Video experiments, as with the others, provide results in real-time.
In 2020, Google announced that it would eventually end third-party tracking cookies in its Chrome browser. Cookies, which are tiny snippets of code, made it possible for advertising networks, including Google Ads, to target folks based on their browsing behavior.
Due to cookies, what an individual does online determines which advertisements and messages she sees. Data from cookies combined with other personal information translates into highly targeted (and effective) advertisements.
Now, Google is proposing an ad-targeting feature called “Topics” that would defend user privacy and replace third-party tracking cookies.
Privacy vs. Relevance
Ads that relied on behavioral targeting could be very relevant. Instead of seeing promotions for uninteresting items, folks saw products and services they could use.
Unfortunately, this relevance came at the expense of privacy. Ad networks harvested all sorts of private and sometimes embarrassing information. This data might even be associated with a specific email address, an actual street address, or a named individual.
Privacy-advocating groups, regulatory bodies, and tech companies have started to shy away from tracking-based behavioral advertising.
Google is giving up tracking cookies. Apple let everyone opt out of tracking in iOS 14.5. Meanwhile, the European Union, several nations, and a few American states introduced laws deterring tracking.
Last year, the company tested Federated Learning of Cohorts (FLoC) technology. And while Google said FLoC was 95% as effective as tracking cookies, it still was not privacy safe. The Electronic Freedom Foundation, for example, published an article describing FLoC as a “terrible idea.”
Since April 2022, Google has been testing a new, perhaps better, option, the aforementioned “Topics.” (I will refer to Topics, the ad feature, with a capital “T” — distinguishing it from lowercase topics in the generic sense.)
Boiled down, Topics has three parts:
- It “labels” websites with a subject, or topic,
- It associates a user with topics based on browsing behavior,
- It shares a visitor’s topics with participating websites and ad networks.
Topics in Use
An example might help explain how Topics could work to target someone.
First, Google has identified about 350 topical labels to avoid race, ethnicity, and gender subjects.
One of these topics is “Arts & Entertainment/Comics.”
So, imagine if a person visited sites like Dark Horse Comics, Comic Book Herald, and CBR.com (the site formerly known as Comic Book Review). In Chrome, Topics might associate this person with the comic topic.
When this person, who is now associated with the comic topic, visits a more general website, Chrome will share the visitor’s topic, allowing the site and any ad server it employs to show relevant comics-related advertisements.
There are some complicating details. The Topics feature associates five new topics with a person each week. It also adds a random topic that doesn’t interest the person to confuse nefarious efforts to track individuals.
Topics will only show three websites of an individual’s usual subjects. After three weeks, it deletes them.
Finally, users have the option to opt out of the Topics feature.
While Topics would allow advertisers to find, for example, a comic-loving consumer on a much more general website, this proposed privacy-preserving feature sounds similar to good old-fashioned contextual advertising.
If an online comic book store wanted to target folks who read comics, it could simply place ads on sites like Comic Book Herald and CBR.com.
Because of the context, the advertiser would know folks visiting these sites are interested in comics. In essence, Topics does this for you.
In a way, the proposed Topics tool is an endorsement for contextual promotion.
A marketer who is willing to do a bit more work should be able to find many contexts to promote products, including vertical websites, newsletters, podcasts, and influencers.
Topics and Context
Suppose it turns out that Topics is a roaring success. In that case, it could encourage the advertising and marketing community to look beyond sizeable programmatic advertising platforms to find contextual placements that might be advertising gems.
However, looking beyond platforms such as Google Ads, Meta Ads, and Microsoft Ads does not mean avoiding them. These platforms will still be essential for most businesses in the foreseeable future.
Here is the point: Tracking-based behavioral ads are a lazy way to market. You could buy an ad on Meta and let its algorithm find nearly perfect targets based on their behavior across devices. You could target warm audiences on Google Ads and know that you should get pretty good results.
The new focus on privacy will probably make advertisers work harder, but finding good contextual opportunities might be worth the effort.
Many advertising agencies offer a pay-per-click audit for potential clients. The audits allow agencies to understand the components of the account and provide recommendations. Audits are helpful but only to a point, in my experience.
I work for a PPC agency. When evaluating a potential new firm, I would ask these four questions if the roles were reversed.
4 Questions for a Prospective Agency
“How do you balance manual PPC management with automation?” Some would argue Google’s shift to automated ad optimization lessens the need for an agency. I disagree.
To be sure, an effective paid search account needs automation. Automated bid strategies adjust on the fly. Responsive Search Ads work best when Google tests all combinations. Advertisers who embrace automation have a better chance to succeed.
With this thinking, advertisers can drive PPC performance by:
- Providing better conversion data.
- Adding the maximum number of ad assets for testing.
- Consistently pausing ineffective keywords, audiences, placements, and ads.
- Implementing negative keywords.
- Researching new keywords and audiences.
However, it’s a red flag when agencies accept Google’s recommendations entirely. Ad opportunities should be vetted for ramifications.
Develop a good sense of what an agency manages and what it leaves to Google.
“How do you evaluate updates from Google?” Constant change is one way to describe the PPC industry. Agencies should be able to address changes, how they impact results and the next steps. For example, Google has been pushing Performance Max campaigns recently. Agencies should have a plan for this new campaign type, even if it’s preliminary.
Watch for vague answers, buzzwords, and Google-speak. You need to know the impact on your company.
A related question is, “How do you stay current?” The agency should be able to share a comprehensive list of blogs, thought leaders, and conferences that it follows.
“How many clients does each account manager oversee?” The answer to this question depends on multiple factors, such as the size of an account. But it should not be more than five. A manager assigned to smaller-spend accounts with little day-to-day execution could do more.
A good benchmark in my experience is no more than two accounts if the average spend is $100,000 or more a month. (Although spend isn’t the only indicator of workload.) Generally, accounts spending at least $100,000 a month have many different campaigns across Search, Display, and Video. In any given week, the manager is:
- Optimizing the account,
- Creating and sending reports,
- Researching and testing new initiatives,
- Meeting and communicating with the client.
This work will typically result in a 40 – 45 hour week for, again, larger accounts. Adding more sometimes means longer hours and less time per client, potentially leading to poor performance.
The exception is agencies that assign specialists to larger accounts to help the lead manager. Those clients should understand the overall makeup of the team and the various roles.
“How will you grow my account?” Agencies typically implement their initial recommendations and see better performance right away. The client has left its previous firm for, presumably, not meeting expectations. A fresh approach and the desire to show improved results can quickly move the account in the right direction.
Clients need to know how the account will grow, producing more profits. For example, a long-term initiative could include creating new audiences to expand customer match lists and using those lists to promote a new product through a Display campaign.
Forward-thinking is critical.
Google’s shift to automated ad management continues. Many of my articles address how advertisers can use that automation while maintaining a level of control. What advertisers often overlook, however, is conversion tracking.
Google knows to show an ad to a searcher who types in the targeted keywords. But Google cannot optimize performance unless the advertiser has enabled conversion tracking.
Most advertisers have done that. But most have not configured it correctly. Here are four steps to improve Google Ads’ automation (and machine learning) via conversion tracking.
4 Steps to Improve Google Ads Automation
Set up Enhanced Conversions. I touched on Enhanced Conversions last month. It’s worth a deeper dive.
Enhanced Conversions track performance even when cookies are restricted — a critical feature for cookieless browsers — by matching hashed customer data from an advertiser’s site with Google’s.
A recent case study from Google reported U.K. retailer ASOS saw an 8.6% lift in sales from search ads after implementing Enhanced Conversions.
Google suggests the “maximize conversion value” bid strategy for advertisers with at least 50 conversions in 30 days. An advertiser with 40 conversions in 30 days could reach 50 by implementing Enhanced Conversions.
Advertisers set up Enhanced Conversions through a global site tag or Google Tag Manager. Enhanced Conversions apply only when Google Ads is the conversion source — not Google Analytics or offline conversions. To trigger a conversion, consumers must submit data such as an email address on the designated page. Page views do not apply.
Choose the right attribution model. Last-click attribution is a common blunder. The model assigns all conversions to the last clicked keyword and ad. It overstates brand campaigns in search because brand keywords tend to be the last click in the buying cycle.
For example, a consumer may click an ad for a non-brand keyword such as “basketball shoes” and go to Nike’s website to research. A week later, she may type “nike basketball shoes,” click the brand ad, and make a purchase. The brand keyword receives all the credit despite the non-brand term having an important role. Hence critical keywords that assisted in the conversion process are undervalued.
Google offers six attribution models for conversions:
- Last click,
- First click. The first click that leads to a conversion receives all the credit.
- Linear. All clicks receive equal credit for the conversion.
- Time decay. Clicks that occur closer to the conversion receive more credit.
- Position-based. Forty percent of the credit goes to each of the first and last clicks, while the remaining clicks split 20%.
- Data-driven. Credit is distributed based on past conversions.
Data-driven attribution is ideal because it most accurately gives credit to each click. But to work efficiently it needs at least 300 conversions and 3,000 ad interactions — e.g., clicks, views of video ads, calls for call extensions. This model assigns appropriate credit to all keywords and ads.
In the absence of enough data, I prefer position-based attribution as non-last clicks combine to receive 60% of the credit.
Use conversion values. Assign a value — static or dynamic — to all conversion types. By updating the pixel dynamically, you can track the revenue of each purchase. Or you can assign a static value for nonmonetary conversions, such as signing up for a newsletter. Adding a value is a requirement of the “maximize conversion value” bid strategy.
Use campaign-specific goals. Once you’ve set up Enhanced Conversions, instruct Google on the bid strategies each campaign should optimize for at Settings > Goals. The choices are “account” or “campaign-specific.” By default Google will optimize by account, meaning your ads will show to any searcher who is likely to convert for any goal.
Campaign-specific goals will optimize toward one or more specific conversions, such as purchases, newsletter signups, or form submissions.
Search engine optimization, content marketing, and the whole of inbound marketing are important for promoting a business. But let’s not forget about advertising.
I recently attended a marketing event where an inbound marketer responsible for search engine optimization and content for a multi-million dollar company complained that her site traffic has dropped because of poor advertising performance.
It was odd to hear her complain about advertising results and yet admit a dependency on them.
Aren’t inbound tactics supposed to replace ads?
Inbound vs. Outbound
For years, some marketers have argued that outbound (traditional) marketing was dead, dying, or less important.
As HubSpot puts it, “Inbound marketing is a business methodology that attracts customers by creating valuable content and experiences tailored to them. While outbound marketing interrupts your audience with content they don’t always want, inbound marketing forms connections they are looking for and solves problems they already have.”
Take a marketing course from the Digital Marketing Institute, and you’ll hear an instructor, Philippe Polman, say, “In today’s business world, inbound marketing is the most important aspect of digital marketing.”
But is that always true? What if outbound marketing is essential? And why can’t inbound and outbound coexist?
A few facts demonstrate that advertising (outbound marketing) is growing, and the growth is likely an indication of value.
Amazon’s advertising services generated $31.6 billion in 2021, according to the company’s 10-K filing (PDF) with the U.S. Securities and Exchange Commission. Some $9.7 billion of that revenue came in just the last three months of the year. Year-over-year, Amazon’s ad revenue was up 32%.
Amazon is a major player in digital advertising. And it continues to rapidly grow despite being restrictive. The company controls most of the content, keeps a close watch on the audience, and has even been accused of stealing product ideas from its advertisers (marketplace sellers).
The growth implies advertising on Amazon — perhaps due to its rich first-party targeting data and purchase environment — is valuable to advertisers and thus effective.
Amazon is not the only ad platform growing.
Google’s advertising revenue rose 42.6% from $146.9 billion in 2020 to the aforementioned $205.9 billion in 2021.
Google acknowledges that its success is contingent on happy advertisers. “We generated more than 80% of total revenues from the display of ads online in 2021. Many of our advertisers…can terminate their contracts with us at any time,” the company reported in its 10-K.
“Failing to provide superior value or deliver advertisements effectively and competitively could harm our reputation, financial condition, and operating results.”
Google almost certainly understands that the quality of its search engine results is a key factor in advertising success. But it would not be surprising if the company found ways to optimize both: the search experience and ad value.
Consider position zero. Google often tries to answer the user’s query on the search results page.
Searching “inbound marketing definition” on Google can return a snippet that includes an answer to the query, leaving no need to click elsewhere.
A search engine optimizer might argue that position one is a big win for the company. But gaining and holding it is an SEO challenge.
Google presumably wants to answer queries quickly and keep users on its properties. As this trend continues, competition for organic keywords could become fierce. At the same time, an ad could trump even position zero.
Facebook Grew, Too
Not too long along Facebook took out full-page newspaper ads claiming that Apple iOS 14’s opt-in requirement would significantly harm small businesses (and Facebook’s ad revenue).
“We’re standing up to Apple for small businesses everywhere,” the ad’s headline read. “Without personalized ads, Facebook data shows that the average small business advertiser stands to see a cut of over 60% of their sales for every dollar they spend….these changes will be devastating to small businesses.”
Let’s put aside the irony of making a case for personalized digital ads in a newspaper and recognize that Apple’s policy changes certainly impacted ad targeting. However, small businesses, in general, have not been devastated.
What’s more, predictions that iOS 14 could send advertisers to inbound marketing have not yet come to fruition.
Apple’s iOS 14 update was a meaningful, significant change to advertising, but still something of a nonevent for the industry.
This is especially true when you consider that Facebook’s advertising revenue rose 36% in 2021, up from $84.8 billion in 2020. Facebook saw average revenue per ad and total overall ad revenue increase.
Even in the face of adverse effects, outbound marketing on Facebook is still booming.
None of this implies that advertising is somehow superior to other marketing forms. I’ve cited Amazon, Google, and Facebook to point out that outbound marketing remains valid and should be part of a balanced approach that includes SEO and content.
Performance Max campaigns were a primary focus of Google’s Marketing Livestream event last year. Now available to all advertisers, Performance Max shows ads across the Google Search and Display networks via a single campaign.
Submitting a product feed, image and text assets, and audience signals enables ads across Google’s inventory. Machine learning models then optimize bids advertisers’ goals.
Performance Max Setup
The first step is creating a campaign and choosing the “Performance Max” option.
Then enter a budget and a conversion goal — volume or value — for the bid strategy. You cannot bid manually with this campaign type. You can optionally set up a target cost per acquisition (CPA) or return on ad spend (ROAS). You’ll also choose the conversions to optimize, such as sales, leads, or phone calls.
Next comes the campaign settings, including location targets and ad schedule. Hidden in the settings is “Final URL expansion.” This option, which is active by default, sends traffic to your most relevant URLs. The fine print states that Google can replace your landing page with a more relevant one based on searchers’ intent. The option is good in theory and similar to Dynamic Search Ads. It allows URL exclusions, too. However, I typically turn the option off because I want users to go to the URLs of my choosing.
After completing the settings, create your first asset group, which contains Merchant Center listings, ad assets, and an audience signal. You can target all products in your Merchant Center or a subset. For example, you could target a particular product type in the asset group so only select products show. Note that Performance Max has priority over Shopping campaigns. Test a subset of your product feed before adding all products.
Next, submit your ad assets, including:
- Final URL (which can dynamically change with “Final URL expansion”),
- Up to 15 images,
- Up to five logos,
- Up to five videos (optional),
- Up to five 30-character headlines,
- Up to five 90-character headlines,
- One 60-character short description,
- Up to four 90-character descriptions,
- A call to action from a predefined menu,
- The business name.
Google will test all combinations to determine the best-performing ads based on the campaign goal. Like Responsive Search and Display ads, submit as many assets as possible to drive performance.
Creating the audience signal is the last step of the asset group setup. Adding an audience signal is optional, but it’s a good idea in my experience as it provides Google a starting point. The signal can be one or more of your audiences, such as:
- Custom segments,
- First-party data (email subscribers),
The final step before publishing the campaign is to add extensions, such as sitelinks, callouts, and structured snippets. Adding extensions is standard with any search campaign.
As enticing as Performance Max campaigns are, the reporting and subsequent optimization opportunities are weak. The first drawback is reviewing network and platform performance. Ads can run on YouTube, Gmail, Google Discover, and more, but we can’t see the data for each channel. Google decides where the ads show as “cross-network.” Thus advertisers cannot view data for, say, Gmail and increase or decrease bids based on performance.
The same problem applies to assets. Advertisers see only aggregate asset data. Our assets may have generated 20 total conversions, but we don’t know which are responsible. Moreover, Google shows the top asset combinations without data, which is equally frustrating and helpful. We could see the top five image combinations, but we wouldn’t know, for example, if one of the five accounted for 90% of conversions.
The most beneficial reporting is in the asset view. Google designates “Low,” “Good,” and “Best” performance for each asset. A headline of “Over 4,000 Five Star Reviews” could receive a Best while an image could be Poor. Unfortunately, Google does not define the performance levels of the three categories.
Despite the lack of transparency, it’s worth testing Performance Max campaigns. Google continues to emphasize automation and machine learning. Performance Max campaigns are the next iteration.
It’s necessary at year-end to review pay-per-click advertising performance. As with any managed channel, you should expect growth, such as more revenue, transactions, or unique visitors, among other metrics.
The review should include broader industry and economic developments. For example, comparing 2021 against 2020 is unique as online sales in 2020 experienced historic spikes due to pandemic-driven lockdowns, stimulus checks, and an overall reluctance of shoppers to leave their homes. Curbside pickup and home delivery were products of the online shift.
With all of this in mind, here are factors that typically make or break PPC performance year over year.
Most advertisers should see progress or continued positive results from brand keywords. But overall PPC performance long-term depends on non-brand efforts, such as a sporting goods supplier bidding on “home gym equipment” keywords or testing a Performance Max campaign.
Gauge non-brand efforts through short and long-term results. Perhaps those efforts decreased return on ad spend but increased revenue and transactions. Though efficiency suffered, the number of purchases increased, generating new customers for future email marketing and retargeting.
Plus, softer conversions, such as email signups and live chat queries, generate marketing prospects and “customer match” lists for new PPC campaigns.
Google Ads’ five campaign types are:
All are critical for PPC growth, but most advertisers run only Search and Shopping campaigns with a small investment in Display, usually through remarketing.
New customers, however, mostly come from Display, Video, and Discovery. Moreover, data generated from new campaign types helps layer audiences in Search and Shopping campaigns. And all traffic, regardless of campaign type, can be used for remarketing.
A report in Google Analytics titled “Assisted Conversions” shows the various channels that contributed to a conversion.
For example, say a shopper (i) clicked a search ad and left the site without converting, (ii) clicked an organic search listing and left the site without converting, and (iii) directly typed the URL into her browser and converted. The Assisted Conversion report would assign the last click conversion and revenue to direct traffic with paid and organic search participating. The shopper’s assisted conversion path would be:
Paid Search > Organic Search > Direct Traffic.
The report assigns a value (revenue) by channel along with the number and value of specific last-click conversions.
Assisted conversions are most valuable when comparing two periods. In the screenshot below, paid-search-assisted conversions in November 2021 were 295.85% higher than in November 2020.
Last click conversions increased too, but the encouraging aspect is that paid search was a part of so many more conversion paths in 2021 and contributed to overall higher revenue. The “Top Conversion Paths” report in Google Analytics provides the specifics of every conversion path involving paid search.
Pay-per-click advertising is ever-evolving. The new features and announcements page in Google Ads Help lists over 70 updates in 2021. For example, Google Ads retired modified broad match keywords this year — phrase match now functions in the same manner.
Growth requires staying informed and implementing appropriate changes. You cannot rest on past performance. Google alters features and workflows without warning. Adapting to change is vital for long-term success.