Microsoft Advertising has announced a new partnership with Baidu Global, the international division of Chinese tech company Baidu.
The partnership will enable Microsoft to bring sponsored content recommendations powered by artificial intelligence (AI) to Baidu’s mobile keyboard app, Baidu Global Keyboard.
This is accomplished by integrating Microsoft’s Chat Ads API into the Chat AI feature of Baidu Global Keyboard, allowing advertisers on Microsoft’s platform to reach keyboard app users.
Keyboard App Offers Valuable New Channel for Brands
According to Microsoft, integration with Baidu Global Keyboard allows brands and advertisers to engage younger demographics, mainly Gen Z users.
Additionally, because Baidu Global Keyboard customizes features based on the app environment a user is in, brands can reach users with relevant ads across multiple platforms. This context can drive increased purchase intent and conversion rates.
AI Could Enable More Personalized Experiences
Microsoft hinted at the potential for richer ad personalization and relevance for desired audiences.
While not confirmed, the AI powering the ad recommendations may look at full context, like message content, user interests, location, and time of day.
This could allow for ads tailored to a user’s needs. For example, the AI might detect a user messaging about dining spots and serve a relevant restaurant ad.
However, the specifics of the AI capabilities and contextual factors it can leverage still need to be confirmed. If the integration enables real-time ad adjustment based on usage context, personalized ad delivery would be an advancement.
Launch Planned For Early 2024 In Key Markets
Microsoft expects the integration to roll out later this year, with an official launch in early 2024. The partnership will launch in the U.S., Canada, the U.K., and Australia.
For advertisers, Microsoft noted that they can take advantage of the opportunity by ensuring their Microsoft Advertising campaigns are set up to target the entire network and have positive mobile bid adjustments in place.
Microsoft Looks To AI to Transform Advertising
In its announcement, Microsoft positioned the deal as part of its broader vision for AI in advertising.
The Baidu Global Keyboard integration is the latest move to bring more engaging, personalized AI-powered ad experiences to new platforms and audiences.
The company plans to evolve conversational ad products based on advertiser feedback.
As internet browsers phase out third-party cookies, online advertisers seek new ways to target ads to customers without relying on current tracking methods.
Transitioning To “Era Of Prediction”
Google laid out its vision for a cookie-less future during a recent question-and-answer video from Radhika Mani, Google Display Ads’ Senior Product Manager.
The video comes as Google plans to phase out third-party cookies in Chrome. Cookies have enabled advertisers to track users across websites to serve targeted ads but raise privacy concerns.
According to Google’s research, 89% of internet users would trust brands more if they invest in privacy-safe technologies.
“In a future without third-party cookies, marketers will need to adopt more durable audience strategies,” said Mani.
She pointed to enhanced use of first-party data and integration with new privacy-preserving tools like the Privacy Sandbox‘s Protected Audience API.
The API introduces techniques like minimum thresholds for ad targeting and shorter duration for user data storage to limit constant tracking. Google says its ad platforms will integrate the API to maintain audience targeting while meeting strengthened privacy standards.
New First-Party Data Options
According to Mani, advertisers will still build audience lists like today. However, enhanced AI is expected to help fill gaps left by less expansive tracking—solutions like Smart Bidding and Optimized Targeting aim to boost ad relevance using internal algorithms.
Mani cited that optimized targeting increased conversions by 50% for some Google Display customers. Upgrading campaigns to Performance
Google is also expanding first-party data capabilities like Customer Match to allow personalized ad targeting based on advertisers’ customer data.
New options like PAIR allow this first-party data to be used on external publishing sites.
Google encourages advertisers to adopt these AI tools and first-party data capabilities to prepare for the cookie phase-out.
More Context On Privacy Concerns
The move from third-party cookies comes amid growing consumer calls for stronger data privacy protections.
Tech companies have faced increased scrutiny over handling user data, with practices like highly targeted behavioral advertising raising ethical questions.
Phasing out third-party cookies aims to curb the constant tracking of individuals across the internet.
Advertisers have mixed opinions regarding the end of third-party cookie targeting.
On one hand, it could impact digital ad revenues. On the other hand, alternative targeting and measurement approaches may fill the void.
In Summary
Though targeting precision may decrease after phasing out third-party cookies, advancements in first-party data use and AI optimization offer alternatives.
For online marketers, investing now in automated and consent-based solutions is key to navigating the evolving advertising landscape.
You might have heard “agile budgeting” referenced during the keynotes at Google Marketing Live this year.
I had several people ask me about what it means – and some were skeptical when I explained a bit about it.
Is this just another buzzy term, or is there real value to it? Let’s dig in.
You may already be familiar with the concept of Agile in project management to prioritize project speed and enable the flexibility needed to quickly adapt to change.
Similarly, the goal of agile budgeting is to allow you to respond quickly to shifts in demand and prioritize spend in the areas of greatest opportunity.
Think:
Proactive rather than reactive.
Real-time rather than retrospective.
Unified rather than siloed.
I know, I know…hasn’t one of the great benefits of digital marketing always been about agility and the ability to quickly shift budgets, test, and iterate?
Yes, but the reality has also been that channels have typically been managed in silos, and budgets have often been planned over fixed time periods.
And, of course, there are AI advancements now enabling much faster responses to market shifts. This is causing many marketers to rethink what agility really looks like.
When you’re budget agile, you can respond much faster to market and business dynamics versus being constrained by fixed budgeting that’s based on a strict timeline, specific channel silos, and other constraints.
That’s a fundamental shift for many businesses and agencies – particularly for teams and individuals accustomed to working and budgeting by channel.
As with any new approach, agile budgeting requires re-thinking, re-organizing, and re-prioritizing.
Specifically, it requires tight coordination across marketing, sales, and operations – with marketing and finance, in particular, working closely together.
OK, But Is It Worth It?
Changing how your business plans, allocates, and optimizes digital budgets may sound daunting (small organizations are often at an advantage here!). Still, research shows that companies don’t have to make dramatic changes to become more budget-agile.
You can probably think of a few ways you can fairly easily tweak and improve certain behaviors in how you, your teams, and your agency work.
In fact, you may already be starting to practice agile budgeting even if you don’t have a formal process yet.
Agile budgeting is the concept behind AI-powered cross-channel campaigns such as Performance Max.
Instead of allocating a certain amount to each specific channel, your budget is applied dynamically wherever there is demonstrated customer demand.
The goal is to find incremental conversions or conversion value at your target regardless of channel.
In the study, marketers who adjust budgets across digital channels on a weekly or more frequent basis are considered behaviorally budget agile.
(You can see why close cross-functional coordination is important!)
Nearly a quarter of those surveyed met that standard.*
Some Quick Findings From The Survey
31% of budget agile marketers engage in formal marketing planning to align on strategy and digital media budget allocations every month, versus 18% of non-agile marketers.
For 59% of budget agile marketers, digital budget changes of 20% or more take a week or longer for approval.
31% of budget agile marketers say it’s “very easy” to get additional budget to start new tests that weren’t included in the initial media budget, compared to just 9% of non-agile marketers.
48% of budget agile marketers state that their marketing performance exceeded internal expectations and marketing KPIs, compared to 33% of marketers who are not budget agile.
Budget agile marketers are twice as likely to call their marketing across channels “very tightly integrated.”
42% of budget agile marketers say their agency partners greatly influence adjustments they make after initial budget planning, compared to only 31% of non-agile marketers.
Key Takeaways To Become More Budget Agile
AI advancements are opening up all types of new digital marketing opportunities, including multichannel campaigns, and with that, we see many organizations and agencies reevaluating their approaches to maximize ROI.
Here are the areas of focus identified from the survey that can set marketers on the path to greater agility:
Flexible, Frequent Planning
Agile budgeting doesn’t mean you throw your planning process out. It means you plan and prepare for change, providing space to adapt and shift as conditions change.
And it likely means increasing the frequency with which you revisit and adjust your plans.
Common Goals & Measurement
Align on the marketing goals that make sense for the business, such as sales revenue, profit margins, lifetime value, etc.
Then, implement consistent measurement and metrics across marketing and cross-functional teams to be able to assess and adjust together.
More Collaboration Across Teams
Being budget agile also doesn’t mean you need to move away from having in-house or agency teams and individuals focused on specific channels.
But breaking down organizational barriers to ensure those teams and individuals are collaborating, meeting, and sharing more regularly together is key. This takes commitment and effort but can start paying off quickly.
Strong Finance Partnership
Establishing trust, understanding, and close partnership with your CFO and finance teams is also key to being able to move toward budget agility.
Operational Alignment
As you can see from the data above – if not from your own experience – a big stumbling block to being budget agile is getting timely budget allocation or reallocation approvals.
Nearly 60% of budget agile marketers said digital budget changes of 20% or more take a week or longer for approval.
Getting a sizable budget approval in less than a week may sound Herculean, but consider if your competitors are among the 40% that can do so and seize on new opportunities to drive incremental value or experiment faster.
Experimentation Baked In
As digital marketers, we’re accustomed to running tests and experiments on an ongoing, regular basis.
But there’s nothing more frustrating than wanting to launch a new test or scale a promising one and running up against fixed budget constraints.
Nearly one-third of budget agile marketers said it’s “very easy” to get incremental budget to kick off new tests, versus less than 10% of non-agile marketers.
Again, this points to the value of aligning across the organization on goals, measurement, and an operational framework that will allow you to move faster.
Bringing flexible planning and budgeting processes into your digital advertising efforts will allow you to laser focus on driving growth by allowing you to readjust your forecasts and invest where opportunities crop up with greater speed and coordination.
The payoff can be worth the effort to get there.
More resources:
Featured Image: fizkes/Shutterstock
*Google/Kantar, Budget Agility and Channel Desiloing research, AU, BR, CA, DE, IN, JP, U.K., U.S., advertiser: digital display n=1,747, social media n=1,936, search n=1,513, online video n=1,538, mobile-only formats (e.g., in-app advertising) n=907, streaming/connected TV n=230, other digital n=2,093, March 2022–June 2022.
It can be a long process, with only a small percentage of ad clickers actually converting.
While you might be getting a lot of new incoming web traffic, you may not see those numbers translate to sales quickly. And few become a sale the first time they land on your webpage.
It’s easy to forget the true role of marketing:
To win people over long before they make the decision to choose your product or company over others.
Often, the best people to target are those who have visited your site more than once or have already digitally interacted with you.
Retargeting and remarketing both give the opportunity to reach these customers. They are also more likely to purchase rather than first-time visitors.
This can be an extremely important strategy in your marketing efforts.
Now let’s explore remarketing and retargeting individually so that the differences become clear to you.
It most often refers to online ad placement or display ads targeting users who have interacted with your site in specific ways without purchasing.
Once a visitor enters your website, clicks on a product, or takes a certain action that you want them to take, a cookie is set in their browser.
You can then use this information to “retarget” them with ads based on their interactions once they leave your site.
These ads are placed by third parties, such as the Google Display Network or Facebook. They allow your ads to trigger on other sites that your visitors go to.
Typically, retargeting can be categorized into two themes: “on-site” and “off-site” events.
Each has different strategies you can take depending on the kind of interactions you want to target.
Let’s look at these a little closer.
Targeting “On-Site” Interactions
This is the category often associated with retargeting. It involves targeting individuals who have already visited your site.
They have interacted with your products and services before – or they have taken some other action but may not have completed the sale.
Retargeting to those who have had on-site interactions can certainly increase conversions.
It can also help retain those who have already expressed interest in your brand but aren’t quite ready to purchase yet.
There are a bunch of ways to retarget potential customers.
Some of the ways you can target individuals who have had onsite interactions include:
Target based on a product that they interacted with but didn’t buy.
Target based on how they found your site (social media, a search, or other inbound events).
Those on your email list who have expressed interest in your brand but have not yet converted to a sale.
These parameters can be set up within different platforms, such as:
Google Ads.
Google Analytics.
Meta (Facebook) Ads.
And many others.
Retargeting campaigns almost always show higher engagement and conversions than non-retargeting campaigns do.
This goes back to the fact that it is much easier and more efficient to market and advertise to those who have expressed interest in your brand or industry.
Targeting “Off-Site” Interactions
Retargeting used to be pretty limited to on-website behavior.
That changed, though, as users spent more time on social media.
Product and brand information delivery was no longer housed in one place.
Instead, it started to disseminate across other areas.
This meant audience interactions now existed in several places that weren’t owned by the brand anymore.
Social media giants like Meta recognized this and started to make engagement targeting a possibility.
In other words, brands could make retargeting pushes based on what a user did on the platform as it related to their Page, Events, and other Facebook-controlled items that a brand participates in.
Retargeting could now include “users who interacted with your Page” and other similar options.
In practice, targeting these users was still retargeting because they had not yet converted to customers.
This became the brave new world of “off-site” interaction targeting.
Screenshot from Facebook Ads, September 2023
What Is Remarketing?
This is where it gets a little confusing, and there is some overlap in the industry.
Sometimes retargeting is referred to as “remarketing” (even though it actually is remarketing).
An example of this is Google’s Remarketing Tools – they are all retargeting tools in the classic sense, really.
While this may be a little confusing, just remember that remarketing and retargeting do share goals and that the terminology is not as important as the associated strategy.
So, what’s the biggest difference?
Retargeting is about moving not-yet customers down the purchase path.
Remarketing is about re-engaging existing customers through media platforms like email or even paid ads.
Tactics like emailing a customer to renew a service or upsell an accessory are traditional examples of remarketing.
It can also take the form of a brand “reminding” a user to act, using information about their purchase history.
This frequently happens in email marketing but also takes the form of paid ads targeted toward current customer segments.
The Blurry Line Between Remarketing & Retargeting
These two tactics used to exist in silos: email was its own island, and paid media was limited to top-of-funnel targeting and retargeting based on website actions.
However, these two have become somewhat interchangeable in recent years.
Why?
Well, platforms like Google Ads and Meta Ads added the capability to target on-platform using email customer lists years ago.
Email no longer exists as a separate silo of information from the paid media part of the world.
Here is the Facebook Ads version:
Screenshot from Facebook Ads, September 2023
Here is Google Ads’ version:
Screenshot from Google Ads, September 2023
When an email list is uploaded, the platform will then work to match those email addresses with user logins.
That matched list is used to show ads to (assuming it meets the minimum threshold of audience size, which varies by platform).
Or, that matched list is used to as an exclusion in campaigns, so they are not shown ads, which means the goal is still focused on new user acquisition.
So now you have that blurry line of targeting your email users, perhaps with the same message you’re sending in emails, but doing it with a paid advertisement.
Or, you’re using the same list of email users but sending them a different message based on how you’re using those lists.
When To Use Retargeting Vs. Remarketing
Deciding when to use retargeting or remarketing ultimately comes down to this: strategy.
Incorporating both tactics into your marketing strategy is a great way to incrementally increase conversions. It doesn’t have to be an “either/or” game.
On one hand, you’d be targeting ‘net new’ customers by retargeting interested customers via paid platforms like Google or Meta Ads.
On the other hand, you’d be remarketing to existing customers for the chance they become repeat customers.
Since both methods target interested customers, the cost efficiency is usually greater than non-targeted ads.
Now, let’s take a look at some examples of when you’d use one over the other.
Prioritizing Retargeting As A Strategy
As mentioned above, retargeting is all about reaching potential customers who’ve interacted with your brand in some way.
A sound retargeting strategy should be incorporated if:
Your main goal is gaining new customers.
Your brand has a product/service that is typically a one-time purchase.
You’re spending a decent amount already on paid ads for awareness building.
The most important one to address is if you’re already running brand awareness campaigns – and spending money on them.
If you’re spending those hard-earned marketing dollars trying to attract new users, you need to do due diligence with retargeting campaigns.
Most users won’t buy something the first time they’ve heard of a brand or the product/service.
That doesn’t mean brand awareness dollars aren’t worth it, though!
Nurturing those users down the funnel with retargeting efforts is where you’ll start to see those incremental conversions come in.
Prioritizing Remarketing As A Strategy
As a quick refresher, remarketing is all about re-engaging existing customers who’ve already purchased from your brand.
You should consider incorporating a remarketing strategy if:
Your brand has a product/service that is typically a repeat purchase.
You want to upsell customers with additional products that may fit their needs.
You don’t have a big marketing budget.
Remarketing options have come a long way throughout the years, which is great for marketers.
Utilizing ‘free’ channels such as email marketing or SMS messaging is a great way to re-engage current customers. Especially if your marketing budget is constrained.
It’s a chance to remind them that they need your product. Or, it’s an opportunity to introduce them to additional products that they might like.
Nurturing existing customers even after they’ve purchased allows for long-term customer relationships to form.
And typically, customers are truly a brand’s best advocates. And word-of-mouth marketing is something that’s extremely underrated.
Retargeting Vs. Remarketing: The Takeaway
When comparing retargeting and remarketing, the overlap and differences have become less clear over the years.
But that has also been true for digital marketing, in general.
Their shared goal, though, is to increase conversions from those most likely to buy from your brand; the difference really being the associated strategy.
Retargeting is really focused on targeting users who have interacted with your brand but have not yet purchased via paid ads (and can take a variety of forms and target a broad range of individuals).
Remarketing focuses on re-engaging existing customers, primarily through email campaigns or paid ads, and reaching out to those who have already had interactions, allowing for more specific upselling and messaging.
This merging of retargeting and remarketing is really indicative of what we see in digital marketing as a whole:
Attribution is not a clearly defined thing.
It used to feel like it was, once upon a time, but it was mostly due to platforms not integrating all the elements marketers had access to.
As these platforms continue to cross-reference one another, the questions become less about what defines a tactic and more about which blend of them yields the best results.
Online ad giant Alphabet is set to report Q3 earnings today at 4:30 PM Eastern time. Highlights from the earnings report published earlier today reveal strong growth driven by Search and YouTube.
Key takeaways from Alphabet’s Q3 2023 earnings report include:
Revenue grew 11% year-over-year to $76.7 billion, topping analyst forecasts.
Search and YouTube ad sales drive strong growth despite economic uncertainty.
Google ad revenues rose to nearly $60 billion, up 9% vs last year. Search ads were up 18%. YouTube ad revenue grew 15%.
Ruth Porat, CFO, cited “meaningful growth in Search and YouTube,” showing ongoing ad spend by marketers.
Cloud revenue grew 23% year-over-year to $8.4 billion. Traction with retail, healthcare, and financial services customers noted.
Operating income rose 25% to $21.3 billion, aided by AI-driven product innovations. The margin expanded from 25% to 28%.
Stay tuned as we live blog key earnings insights for digital marketing professionals. Google’s ad machine drives the market – its results matter. Follow along on the live stream.
YouTube announced the launch of new artificial intelligence (AI) powered advertising products designed to help brands connect with relevant audiences and optimize campaign performance on the platform.
The video-sharing platform unveiled tools like Spotlight Moments, which utilizes AI to identify trending content around major events for brand sponsorship opportunities.
YouTube also revealed the expanded availability of Video Reach and Video View campaigns, which leverage AI to enhance ad targeting and efficiency.
The announcements signal YouTube’s increased emphasis on AI innovation within its ad offerings as it looks to provide brands more options for engaging the platform’s two billion-plus monthly users.
Spotlight Moments
One of the new ad offerings is Spotlight Moments, which utilizes AI to identify the most popular and relevant YouTube videos around major cultural events like Halloween or the World Cup.
Advertisers can sponsor a branded YouTube channel to feature their ads alongside this automatically curated event-related content.
YouTube states in a blog post:
“Spotlight Moments gives brands a high share of voice across video content surrounding the world’s biggest cultural moments.”
YouTube explained that AI technology can detect rising trends and engagements around key events, allowing brands to capitalize on these “noisy moments” when viewer attention is high.
Expansion Of Video Reach & View Campaigns
YouTube also announced the expanded availability of two other AI-enhanced ad products: Video Reach and Video View campaigns.
The company said tests of these new formats delivered substantially better results for advertisers than standard video ad placements.
Video Reach campaigns use AI to distribute ads across YouTube’s multiple video ad options – including in-stream, in-feed, and Shorts – to maximize reach. In trials, advertisers saw 54% more reach at a 42% lower cost by utilizing this cross-format approach.
Meanwhile, Video View campaigns employ AI optimization to obtain more cost-efficient video views to drive brand consideration. YouTube said these campaigns achieved 40% more views at a 30% lower cost-per-view than regular in-stream ads in testing.
In Summary
YouTube’s launch of AI-powered ad products gives brands new ways to reach and engage users.
By leveraging AI to identify trends and optimize campaigns, advertisers can now better target relevant audiences on YouTube.
Google has announced it will begin phasing out support for third-party cookies in Chrome by disabling them for 1% of users starting in Q1 2024.
This initial deprecation comes ahead of a broader phase-out for all Chrome users by Q3 2024.
Third-Party Cookies Blocked For 1% Of Chrome Users Next Year
Beginning in early 2024, Google will turn off third-party cookie support in Chrome for 1% of users worldwide.
This is the first part of a gradual process to remove third-party cookies entirely.
The extended phase-out aims to allow initial small-scale testing before the impact is felt by all Chrome users later in 2024.
Websites can use this early stage to assess how their services handle the loss of third-party cookies.
Why Google Is Phasing Out Third-Party Cookies
Third-party cookies have enabled convenient cross-site tracking of users as they browse the web.
Google wants to eliminate this tracking capability while introducing new standards that support key needs like fraud prevention and delivering relevant ads.
Google says this change will improve user privacy and security while providing website owners tools to sustain their businesses without third-party cookies.
What Happens When Third-party Cookies Are Fully Blocked?
Starting in Q3 2024, Google plans to expand the third-party cookie removal to 100% of Chrome users, pending regulatory approval.
This will force major changes in how digital advertising operates. Some fear it may push sites toward more opaque tracking methods.
To ease the transition, Google is releasing new Privacy Sandbox APIs for use cases, including identity, advertising, and fraud detection. However, uncertainty remains around how the ad ecosystem will adapt.
The initial 1% deprecation next year provides a critical period for websites, advertisers, and other industry players to assess compatibility and prepare for the broader rollout. Scrutiny will be high, given Google’s dominance in web browsing.
What Does This Mean For Advertisers?
The news will likely be controversial for the digital ad industry, which relies on third-party cookie tracking. Some ad tech firms stand to lose their current data collection abilities.
Advertisers and publishers must adopt new methods for serving relevant ads to users. This shift could benefit walled gardens like Google, Facebook, and Amazon with logged-in user data troves.
Privacy advocacy groups have welcomed the move, though some caution Google’s Privacy Sandbox doesn’t go far enough to restrict covert tracking.
How Does This Impact Users?
Users may see more relevant ads, or possibly more ads overall, as sites work to sustain ad revenue. Logged-in experiences across Google or Facebook properties could become more prevalent.
The effects remain to be seen, but the third-party cookie’s demise will markedly alter the landscape of privacy and advertising on the web.
What Happens Next?
Google aims to have its new Privacy Sandbox APIs tested before the broader phase-out.
Uncertainty remains about how digital advertising will function without third-party cookies.
Industry groups are working to develop new standards for targeted ads protecting anonymity. Chrome’s large market share means sites must adjust.
In Summary
Google’s plan to phase out third-party cookies marks a major shift in digital advertising and website tracking.
While aimed at improving user privacy, the change brings uncertainty around how the ad ecosystem will adapt.
Website owners should audit their cookie usage now and begin preparations to ensure their services function smoothly when third-party cookie support starts being removed in 2024.
Google announced the launch of a new advertising product called Demand Gen Campaigns, which utilizes AI to create highly targeted video and image ads on YouTube and other Google platforms.
This new ad product aims to help advertisers extend their social strategies beyond traditional platforms like Facebook and Instagram.
Demand Gen represents Google’s latest effort to compete with traditional social sites for advertising dollars.
Demand Gen Campaign Details
Demand Gen Campaigns utilize video ads up to 15 seconds long, ideal for pre-and mid-roll YouTube placements, and image carousels tailored for mobile.
Advertisers can use Demand Gen’s creative tools to tailor ad content and messaging for different audience segments.
Formats like bumper ads and carousels aim to capture attention and interest as users scroll through feeds.
In addition to compelling creative, Demand Gen applies Google’s powerful AI to identify “lookalike” audiences that share characteristics with a brand’s existing customers.
Bidding and budget tools allow granular control over ad delivery to drive clicks, site traffic, or conversions.
Google says Demand Gen gives advertisers more flexibility to refine campaigns based on performance data.
Responding To Shifts In Consumer Behavior
Screenshot from: blog.google/products/ads-commerce/demand-more-from-social-with-ai-powered-ads/. October 2023.
Demand Gen campaigns come when consumer viewing habits are rapidly shifting.
Recent surveys show viewers now split their social media time between traditional platforms like Facebook and Instagram and video sites like YouTube.
According to Google’s research, 90% of users have watched content from a particular creator or artist across multiple platforms and formats in the past year.
Experts attribute the shift to “social media fatigue” as users tire of highly-curated feeds on sites like Instagram. YouTube is seen as a place for more genuine engagement with creators.
Helping Advertisers Respond To Changing Behavior
A shift in viewing habits presents challenges for advertisers used to targeting audiences primarily on Facebook and Instagram. Google’s Demand Gen is designed to help advertisers capitalize on this change in habits.
Google claims that Demand Gen Campaigns can help advertisers take advantage of this shift through visually compelling ads tailored to specific audiences. The ads aim to capture user interest as they browse YouTube, Google Discover, and other parts of the Google ecosystem.
Early adopters like Naranja X, an Argentine fintech startup, have already seen strong results from Demand Gen tests. Naranja X’s Demand Gen ads drove 3X higher click-through rates at 61% lower cost than its paid social campaigns. Samsung Germany also saw a 400% increase in click-through rates using the new ad product.
Availability
Demand Gen Campaigns officially rolled out worldwide on October 10, replacing Google’s previous Discovery ads product.
Discovery campaigns will be phased out through early 2024.
The launch of Demand Gen is arguably Google’s most aggressive move yet to take on rival advertising platforms like Meta.
If Demand Gen gains traction, it could motivate Meta to enhance its video ad offerings to remain competitive.
While Google hasn’t announced a sunset of DSA, it’s worth figuring out how to use Google’s new darling – PMax – to achieve similar results.
Let’s look at what’s happening to these two ways to automatically run ads for your site, and cover how to switch from DSA to PMax to get ahead of the inevitable transition.
Performance Max Campaigns Eclipse DSAs
DSAs have been a reliable tool for advertisers for several years, allowing businesses across industries to harness their organic search strength for PPC campaigns.
Despite their effectiveness, there’s an observable shift towards PMax campaigns.
Screenshot from Navah Hopkins from Optmyzr, August 2023
See the CPA and lead volume in an account running DSA and PMax with URL expansion.
PMax campaign drives more conversions at a better CPA than DSA ad groups in the same account.
Many advertisers have reported a similar shift and now see fewer impressions to DSAs that used to drive significant volumes. And that shift away from DSA impressions is especially noticeable in accounts that also have PMax campaigns.
Even though Google hasn’t released an official statement, indicators point towards PMax campaigns eventually replacing DSAs.
Screenshot from X.com, August 2023
Google hints that DSA’s capabilities may be replaced by PMax. To me, this inevitable transition makes sense.
DSAs were created to automatically create ads to fill in gaps in advertisers’ search campaigns. PMax takes that type of automation to the next level with the latest machine-learning capabilities from Google.
PMax can do what DSAs did and then some. Maintaining both systems wouldn’t make sense for Google.
While there’s speculation that PMax may eventually usurp other campaign types like search, too, this makes less sense because search campaigns have always had a significant manual element of advertiser control, which is very different from what PMax offers.
It takes just a few inputs and automates many of the details.
Forcing advertisers to use this much more automated campaign type will take a lot more convincing, especially for larger advertisers who have crafted meticulous strategies to get the very best results from their manual campaigns.
What Is Gained In A Shift From DSA To PMax
There are several important differences between PMax and DSA, including the types of ads that can be served and the types of placements available.
As you prepare to migrate from DSAs to PMax, it’s important to understand these differences so that you can take advantage of all the capabilities.
Multi-Ad Formats
One of the key benefits of PMax campaigns is their support for multiple ad formats. Unlike DSAs, PMax campaigns encompass text, display, and video ads.
This variety allows advertisers to cater to a wider audience, enhancing the user experience with different formats that appeal to diverse consumer preferences.
While PMax ads still rely heavily on advertiser-provided content for ads, Google has showcased their future ability to generate ad assets automatically based on website and YouTube content.
On the other hand, DSA campaigns’ ability to automate ads relies on the SEO of the landing pages. PMax, meanwhile, will use the newest generative AI technology, like Google’s PaLM2, to generate a wider variety of ad creative.
This innovation is happening in PMax campaigns and not in DSA campaigns which seem to be in maintenance mode only.
Thinking about one of the key value props for DSAs is that advertisers with good on-site SEO could leverage this to get more complete ad coverage.
But clearly, the web is about more than just text. So it makes sense for DSAs to also evolve towards including images and video.
But since all that development around automating ad assets is focused around PMax, this campaign type will likely continue to take away volume from DSAs and eventually take over completely.
As PMax more fully utilizes all the site’s assets, it’s likely that the resulting ads will be more compelling to consumers and drive more engagement with the advertiser’s site.
Next, let’s take a closer look at another key difference between the campaign types and how they can serve ads in different places.
Multi-Channel
Another compelling feature of PMax campaigns is their cross-channel functionality. PMax runs across various channels like YouTube, Display, Search, Discover, Gmail, and Maps.
This means advertisers can maintain fewer campaigns yet reach their audience on a broader scale, thus streamlining their advertising efforts and potentially leading to more efficient campaign management.
The notion that fewer campaigns are preferable to more campaigns is largely Google’s stance. To me, this only makes sense when considering less sophisticated advertisers.
More sophisticated advertisers, like those reading this site, will still benefit from the additional control that is gained by running more campaigns.
For example, an advertiser with a large product catalog could segment their products into different campaigns based on profit margins.
This is a simple yet effective technique for optimizing PPC towards a profit goal rather than a revenue maximization goal.
By creating several PMax campaigns, advertisers can set target return on ad spend (ROAS) levels that ensure the profitability of each campaign.
Next, let’s take a look at how the campaigns differ in how ads are dynamically targeted to an advertiser’s entire website.
Dynamic Targeting Settings
DSAs had the notable advantage of allowing advertisers to specify which parts of their website they wanted to advertise.
This function gave advertisers more control over their campaigns. For example, they could create a dynamic ad group for a specific landing page or a group of landing pages.
PMax can also do this but approaches it differently.
PMax doesn’t provide URL specification but rather allows for URL expansion. Ads can then be dynamically created to lead users to any page on the site that qualifies according to the URL expansion rules.
So with PMax, URL expansion is an on-off switch rather than a list of URLs that should be targeted.
To allow advertisers some control, it does allow setting exclusions or rules for excluding parts of their site from being included in URL expansion.
Screenshot by author from Google, August 2023
PMax campaigns with URL expansion can set rules for excluding portions of the site from automated ad targeting.
It’s a shift in perspective – instead of choosing what to include, with PMax, you’re selecting what to exclude.
While this may require a different approach, the end result is similar – you can ensure that only the relevant parts of your website are advertised.
For example, an advertiser who wants to advertise only products in their electronics section could target URLs containing ‘electronics’ in a DSA dynamic ad group.
In a PMax campaign, the same can be achieved by excluding all other URLs besides the ones containing “electronics.”
Performance
Now that we’ve explored the transition from DSA to PMax, it’s time to focus on another critical piece of the puzzle – measuring campaign performance.
With DSAs, performance measurement is often centered around the last-click, transactional model.
We aimed to lead our audience to a sale; if it didn’t, we considered it a miss. Simple, right? Well, with PMax, we need to recalibrate our performance yardstick.
PMax’s impressive range of ad formats and multi-network functionality means it can serve as more than just a direct sales tool. PMax has the potential to excel as an upper funnel, attribution, and awareness campaign, too.
Let’s say, for instance, you run a video ad campaign on YouTube using PMax. Even if a viewer doesn’t immediately click through to your website and make a purchase, the campaign is still valuable.
It raises brand awareness, introduces potential customers to your products, and leaves an impression. That’s the beauty of PMax – it extends your reach, spreading your brand message far and wide.
And in doing so, it builds awareness for your brand, often at cost per click (CPCs) that are quite affordable when compared to the typical CPC for a bottom-of-the-funnel click.
With this shift in focus, our success metrics must evolve, too.
Instead of just tracking last-click conversions, we need to pay attention to impressions, brand recall, engagement rates, and all the other factors that guide a user from the early stages of their consumer journey all the way through the final conversion.
It’s all about understanding the wider customer journey and appreciating the role of PMax in contributing to your brand’s larger narrative.
Conclusion
So while there is no specific date at which DSAs will be replaced by Performance Max campaigns, the ongoing development that is making PMax more capable means there will be a continuing decline in DSA performance.
Advertisers who enjoy the additional volume provided by a system that automatically matches landing pages on their site to user queries should consider migrating from DSAs to PMax at some point soon.
