Google has launched Meridian, an open-source marketing mix model (MMM) that helps marketers improve their advertising budgets.
It uses Bayesian causal inference methods to offer better insights into online and offline media channels.
In an announcement, Google highlights how older MMMs focused on offline media and branding, often missing the complexities of performance media like search ads.
Meridian helps advertisers understand the real impact of their marketing efforts. It goes beyond usual conversion metrics and shows how brand-building activities—like TV commercials and YouTube ads—can affect long-term business results and future customer acquisition.
Data & Insights Made Easier
Meridian’s data platform helps advertisers access key Google media metrics like impressions, clicks, and costs. It also provides information, such as Google Query volume, to show how paid search spending delivers results.
Additionally, Meridian tracks reach and frequency for video campaigns on platforms like YouTube. It examines how many viewers are reached and how often they see the ads, helping marketers predict how brand interactions lead to future purchases.
Benefits For Marketers & Agencies
Meridian is open source, enabling marketers and data scientists to customize its code for business needs. It also allows you to include outside factors, like economic conditions and pricing strategies, in their models for a better overview.
To help marketers use Meridian, Google has created a partner program with over 20 certified agencies. These trained partners will assist advertisers with implementation and optimization.
What People Are Saying
Several measurement and agency partners praise Meridian’s features and innovative approach:
Dr. Santosh Nair, Founder and Director at Analytic Edge, states:
“Meridian integrates technical innovations to assess the indirect impact of search on marketing channels in the consumer journey. It enhances the measurement of “Reach” and “Frequency” for YouTube campaigns, helping advertisers with campaign planning. The seamless integration with Google Marketing Data Platorm boosts productivity in data processing and improves the accuracy of the data used in the model. Our collaboration on Meridian will help advertisers better understand the interactions between channels and improve their campaign strategies.”
Shuho Yoshida, Data Science Manager at Dentsu Digital Inc., states:
“Meridian is highly innovative in that it offers an option for effectiveness measurement that aligns with the characteristics of modern media, such as incorporating logic that considers Youtube reach and frequency, and improving the verification accuracy of lower-funnel media like paid search by introducing a framework for causal inference.”
Why This Matters
As digital advertising evolves, marketers need effective ways to measure online and offline campaigns.
Google’s Meridian offers a flexible solution for modern marketing challenges, including detailed search data and video metrics.
Looking Ahead
In the coming months, Google plans to further enhance Meridian’s features and methodology.
Marketers interested in exploring Meridian can download its core codebase on GitHub. Those seeking expert guidance can connect with Meridian-certified partners to tailor the platform’s capabilities to suit specific goals and business models.
This year brought a steady stream of updates in Google Ads that spanned across campaign types and creative, media activation, and measurement solutions – many informed directly by advertiser feedback.
I won’t cover every big update here, but building on a talk I gave at Hero Conf in San Diego recently, I’ll highlight some of the key themes in this year’s launches and the technological and consumer trends driving product innovation in Google Ads. (It was wonderful to catch up with old marketing friends and meet so many new ones!)
Let’s dig into some of the top trends and launches of what’s possible now to help you engage audiences and drive better results – and get a sense of where we’re headed.
Search Is Evolving & Bringing New Opportunities For Advertisers
For many years, people largely searched with short two- to three-word queries. For advertisers, that meant we could simply target a list of keywords matching those short queries to reach the right audience.
This has been changing.
We are seeing people asking longer, more complex questions.
Queries of five or more words are growing 1.5 times faster than shorter queries (Source: Google Internal Data, Global-EN, November 2022 – April 2023 vs. November 2023 – April 2024). You may notice this in your own search behavior.
This shift is why we continue to invest so heavily in broad match to help ensure your Search strategy can keep up with the complexity and diversity of searches.
AI Overviews in Search combines large language models (LLMs) with Google’s core search systems to provide responses and resources for more complex queries.
AI Overviews is now available in more than 100 countries and territories, reaching more than 1 billion users monthly in six languages (Source: Alphabet Q3 2024 Earnings).
Additionally, visual searches on Google are growing, thanks to huge leaps in multi-modal visual search capabilities with Lens.
Overall, we’re now seeing 20 billion visual searches a month on Lens, and 1 in 4 visual searches has commercial intent (Source: Google Internal Data, Global. Lens, August-September 2024).
To help advertisers connect with consumers in these new experiences when relevant, we’ve introduced Shopping ads in Lens results globally and text and Shopping ads in AI Overviews on mobile in the U.S.
More Personalized Shopping Discovery
Another new experience to highlight is the completely reimagined Shopping tab.
Currently live on mobile in the U.S., the new Shopping tab experience features a personalized feed for signed-in users and a dedicated deals page. It also incorporates features like Virtual Try-On.
Powered by Gemini models, Virtual Try-On lets potential customers see how an item of clothing drapes, clings, and stretches on real models of different sizes and shapes rig by combining the images of real, diverse human models with photos of your garments from Merchant Center.
All apparel brands with a shopping feed and high-quality imagery are automatically opted into Apparel Try-On and can show in both free listings and Shopping ads.
And while we’re on the topic of Shopping, Merchant Center Next (now simply called Merchant Center) rolled out globally this year.
The new interface has feature parity with the previous version, plus more features such as generated performance insights, tailored recommendations, and visual reporting that you generate with plain language prompts.
Launch, Iterate, And Scale Engaging Creatives
Creative generation solutions make it easier for businesses to create and launch higher-performing, on-brand ads.
The conversational experience for Search campaigns expanded to more languages and is available in English, Spanish, French, and German. It’s also now powered by Gemini models.
This feature is particularly helpful for new and small business advertisers.
We’ve seen that advertisers that use the conversational experience in Google Ads are 63% more likely to publish Search campaigns with “Good” or “Excellent” Ad Strength (Source: Google Internal Data. US, English campaigns published after using asset generation vs. published without using asset generation. January 1-31, 2024).
In short, that means they’re launching campaigns that are more likely to perform better from the start.
Image from author, December 2024
We also made continued improvements in our generative AI models and capabilities to make it a whole lot easier to create varieties of high-quality, on-brand image and video assets at scale.
The asset enhancements feature for responsive display ads uses AI to automatically modify your ad with smart cropping to highlight focal points, text assets, and logo overlays on relevant image areas, and improve image resolution and sharpness. It can even animate your static images for more engaging ads.
We also expanded generative creative capabilities beyond Performance Max to other campaign types this year.
Image asset generation is available in Performance Max, Demand Gen, Display, and App campaigns. It is now powered by Imagen 3, Google’s latest text-to-image model that generates crisper, more lifelike images for your ads.
To generate on-brand image assets, you can upload image references to help generate multiple image assets that better match your brand’s visual style.
Image editing got more capabilities this year as well and is now available in Performance Max, Demand Gen, Search, Display, and App campaigns.
During campaign construction, you can remove, add, modify elements, and extend backgrounds in your image assets, as well as adjust images to fit any size, aspect ratio, or orientation.
Pro tip: Image editing can be great for moments like seasonal campaigns to make sure your assets are on-trend with different holidays and moments during the year so they resonate strongly with audiences.
Note that image editing is different from Product Studio, which is where you can edit your product assets in Google Merchant Center and the Google and YouTube app on Shopify.
Product Studio also now supports reference images to create assets that reflect your brand’s visual style. And with image-to-video animation, it can quickly generate videos from your existing product images.
Speaking Of Video . . .
Image from author, December 2024
Creating great video assets for all the inventory options on YouTube can be challenging for businesses of all sizes.
This fall, we introduced video enhancements, which use Google AI to automatically create additional flipped and shortened versions of your existing videos.
These new ads go through extensive quality review before going live. You can remove generated assets you don’t want or opt-out (if desired) at the campaign level.
Voice-over is a new self-service feature available globally in the asset library in Google Ads. Simply add your script, choose the voice option you want, and then click to generate a voice-over for any YouTube video ad in more than 12 languages.
Long-form content is still extremely popular on YouTube, of course, but Shorts now see 70 billion daily views and an audience of 2 billion signed-in users monthly. And Shorts views on connected TVs more than doubled last year.
This year, we launched branded QR codes on YouTube connected TV. Viewers can scan the code on their phone to visit your website, make a purchase, or learn more about your product or service.
In Video View Campaigns, we introduced new format buying controls with the option to run ads on Shorts inventory only.
And if you’re interested in tapping the power of YouTube creators, Partnership ads powered by BrandConnect are now available in Google Ads globally.
You can use videos made by a creator and promote them as ads, then create new audience segments based on viewers of those videos.
A new video-linking API is also available to link creator videos to your Google Ads account at scale.
New Controls. More Transparency.
We all know that when using AI, better inputs lead to better outputs – and outcomes for your business.
Google AI doesn’t automatically know the definition of better results for your business – only you do. That’s why we’ve continued to add more ways to tell Google what’s important to your business.
In Search campaigns, brand inclusions allow you to use broad match, while still constraining your brand campaigns to serving on specific brand or related product queries.
Brand exclusions are now available for all match types and Dynamic Search Ads to prevent your ads from serving on certain brand queries, including misspellings and variants.
We also rolled out these highly requested updates for Search campaigns:
Negative keywords now take misspellings into account. Just add one negative keyword to exclude traffic from all misspelling variations.
The search term report shows 9% more search terms on average by reporting misspelled queries with the correctly spelled query.
Image from author, December 2024
You can also see this focus on controls and transparency emphasized in many of the Performance Max updates this year, such as:
With Brand guidelines, you get to tell Google about your brand colors and font to generate on-brand visuals.
Campaign-level negative keywords – a top ask – are in beta and will be rolling out soon.
IP exclusions are supported, and account-level placement exclusions now also apply to the Search partner network.
A new experiment allows you to test the impact of final URL expansion to let Google AI select the most relevant landing pages and help you match to additional relevant search queries.
To give you more flexibility when managing both Performance Max and Standard Shopping together, Ad Rank is now used to determine which campaign serves when you have product overlap between them.
In addition to controls, we’ve also added more insights for Performance Max, including:
Asset-level conversion reporting.
Impression share reporting.
Demographics in audience insights.
New target pacing insights.
This is an area we are actively focused on. Stay tuned for more in 2025!
More Bidding Options Tailored To Specific Goals
Another area I want to call out is the continued focus on expanding and improving bidding capabilities tailored to advertisers’ specific goals.
Here’s a look at some of the work happening in this area:
For retailers with both online and physical stores, omnichannel shoppers tend to spend more.
In Demand Gen campaigns, Omnichannel Goals is now in beta to give those retailers the ability to optimize towards both online conversions and Store Visits.
For lead gen advertisers, the customer journey can be complex. And, of course, not every customer has the same value to your business.
Continuing to make value-based bidding easier to understand and execute will continue to be a focus area because we’ve seen the positive results it can drive for advertisers.
Lifecycle goals offer additional options to optimize toward your most valuable customers:
Last month, we added the ability to use custom experiments in PMax (in beta) and Search to test new customer acquisition.
The new retention goal is currently in beta for Performance Max. It allows you to optimize your campaign to win back lapsed customers to reduce churn rates.
And lastly, bidding to profit has also been a top ask from customers.
The new gross profit goal is in beta in Performance Max and Standard Shopping campaigns. It pulls in profit data from sources you already have, like Merchant Center, enabling you to bid to profit with Smart Bidding.
You can also easily switch between revenue and profit goals without disrupting performance.
Data, Measurement & Privacy
Image from author, December 2024
While advancements like image generation may capture attention, the solutions that provide Google AI with the necessary data are equally vital.
Your first-party data is the foundation for better performance and measurement. It helps drive better results and safeguard your campaigns against the impact of privacy changes and signal loss.
We’ve developed a number of privacy-centric solutions that enable durable measurement and allow you to make the most of your first-party data.
Google Ads Data Manager is a big step forward in simplifying the process of connecting your first-party data sources to your account and keeping your audience lists and conversion data complete and accurate.
This fall, we introducedconfidential matching for Customer Match in Google Ads Data Manager. It securely processes first-party data for use in Google Ads.
This happens automatically in the background so you don’t have to think about it other than knowing your data remains encrypted and unseen by anyone – including Google.
We’ve also launched the option to encrypt the data yourself and receive proof that your data is processed as intended. And, we are currently running a closed beta to enable confidential matching for enhanced conversions for web.
Tag diagnostics for the Google Tag is available in Google Tag Manager, Google Ads, and Google Analytics to help you quickly identify and troubleshoot potential issues.
Measurement diagnostics for Enhanced Conversions for Leads is also fully rolled out in Google Ads. Use it to monitor your setup and ensure you can take action against the offline data you share with Google.
While we’re on lead generation, new lead funnel reporting for lead gen gives you added visibility into offline conversions when you share qualified and converted leads with Google.
Lastly, advanced consent mode includes two new parameters for sending consent signals needed for ad personalization and remarketing purposes to Google.
The easiest way to enable and maintain advanced consent mode is to work with a Google CMP partner.
The new integrated CMP setup in the Google Tag UI makes this even easier with select partners. Just connect your CMP and configure consent settings right within the Google Tag UI – no code editing needed.
Looking Ahead
AI’s power comes in helping you dynamically adapt to market shifts and create better experiences – and ultimately better outcomes – for your customers and your business.
When you put AI to work with good data and inputs about what you know about your business and goals, you can spend more time focused on, well, the joy of marketing.
In the year ahead, you can expect us to continue building on these capabilities to help you create and measure engaging experiences that drive incremental value for your business.
Keep the feedback coming, and be sure to check out the full recap of top launches across each campaign type in Google Ads this year!
In Google Ads, where every click can be a potential sale, understanding your competition isn’t just strategic, it’s also absolutely necessary for creating a profitable ad campaign.
For our ecommerce clients, Google Merchant Center has long been a critical tool for managing unwieldy amounts of data.
When some ecommerce clients can stock thousands of SKUs or maybe even millions of SKU iterations, it enables us to manage shopping campaigns that would otherwise be impossible.
With new evolutions of machine learning and AI-powered Shopping on the horizon, making sure your store remains competitive in the massive landscape of ecommerce advertising is more important than ever.
Here’s how you can use this tool not just for managing product feeds, but also for identifying huge opportunities in your competition.
Merchant Center Next is an upgraded platform that allows ecommerce stores to manage how their products appear on Google Shopping, both paid and organic.
But for this post, we’ll focus more on its analytics and insights features, which are a gold mine for competitive analysis.
How To Use Competitive Analysis Features In Merchant Center
First, you need to make sure your account actually has access to Merchant Center Next.
Although Google first announced a full rollout by September 2024, not all accounts have access yet. The integration with Google Ads is seamless, so it’s an easy click.
Second, take a look at the competitor visibility section. This section is reached by navigating to Analytics > Products, and then looking at different content tabs, labeled Traffic, Competitors, Popular Products, Pricing, and Promotions.
This shows you cards that highlight how your products stack up against the competition in terms of overall visibility. You can see who among your competitors is getting more clicks, where their ads rank, and how your own traffic compares.
Third, take a look at price competitiveness. Google Merchant Center Next provides insights into how product prices align with the overall market.
Are your SKUs priced above, similarly, or below the average price across the internet? The data within this section will help you adjust your pricing strategy easily.
Researching Price Competitiveness Within Google Merchant Center. Screenshot from Google Merchant Center, November 2024.
Next, look at search trends. This section allows us to have a closer look at and to understand what consumers are looking for in aggregate.
It’s not just about products or individual SKUs, but also entire categories and product niches you may not be aware of.
Doing a deep dive into product performance can be massively valuable.
Best Sellers allows you to identify products flying off your virtual shelves. If competitors are selling items you don’t currently offer, this is a good indicator to consider product line expansion.
Out-of-stock Insights gives you a heads-up that you may need to restock a product – inventory management is always a huge issue with popular ecommerce stores.
How To Interpret Data For Real-World Use
One of my favorite metrics in Google Merchant Center Next is the Ad/Organic Ratio Analysis. This metric tells us how much of the traffic per product is paid versus organic.
You can infer competitor ad spend from this. If you can see a competitor has a high ratio of paid to organic, it means they’re possibly spending a lot more on ads than you, so it might be time to ramp up your Google Ads spend (something you’ve likely heard from plenty of Google reps).
Ad/Organic Ratio Analysis in Google Merchant Center. Screenshot from Google Merchant Center, November 2024.
Since Merchant Center isn’t only about paid traffic, you can also use search term insights in the Analytics > Summary tab to help with your ecommerce store’s SEO performance.
Use these insights into keywords to refine product titles, descriptions, or even URLs. If a competitor’s product with a similar title is ranking higher, this can indicate possible opportunities for improvement.
Continuous monitoring and adapting to the current market are critical. Nothing seems to change faster than the digital advertising landscape.
Using Merchant Center Next to identify market shifts means you can discover new entrants, changing consumer preferences, seasonal trends, and more.
Using Merchant Center Next to identify changing product trends. Screenshot from Google Merchant Center, November 2024.
Using this newly available data within Merchant Center can help you outsmart the competition – spotting gaps where you may be able to see that competitors are missing out on certain categories or price points.
If you can see that no other competitor offers free shipping, or aren’t bundling products in unique ways, these are all ways to leverage the data for your own benefit.
More Data Is Coming For Shopping
One of the biggest complaints over time has been that Google Ads seems to continually remove granular data from our fingertips, making it harder to optimize and improve campaigns.
This is especially important to ecommerce advertisers who often have unwieldy amounts of SKUs and transaction data to analyze.
Google Merchant Center Next actually seems to be bringing some of this data back into the fold. By leveraging this data – specifically the competitive analysis tools – you cannot only keep up with the rest of the ecommerce market, but also maybe even jump ahead.
Plus, Google Ads has been making some major strides in consumer-focused customized experiences within Google Shopping.
These AI-powered custom shopping experiences are still in their infancy, but making sure your campaigns are fully optimized within Merchant Center Next is the first step to staying competitive even through these new changes.
After all, the data that Google uses to train these new experiences come directly from stores just like yours (which can sometimes feel like a double-edged sword, to be sure).
All indications seem to be that this data will continue to increase. Not only has Performance Max been offering more and more data recently, but shakeups at Google Ads seem to indicate that more granular data may be coming to us from more than one platform.
Ecommerce knowledge and data aren’t just power – they are profit!
Marketers spend years crafting strategies to drive results through Google Ads, Microsoft Ads, and more.
Of these many strategies adopted by brands and agencies, in my experience over the last 15 years, one topic that sits across every paid search strategy is brand bidding.
What Is Brand Bidding?
Brand bidding, in its truest form, relates to targeting keywords that relate to your (or your clients) business.
For example:
Screenshot for search for [new balance], Google, November 2024
The most common keyword marketers will include in their strategy is the company name. But depending on search demand, there may be additional keywords that are included.
Such as:
Brand keyword + product.
Brand keyword + ‘address’.
Brand keyword + ‘customer service’.
Brand keyword + ‘returns’.
There is also an element of brand bidding focused on products/services that may not contain the company name.
Think Apple and the “iPhone” or Converse and the “Chuck Taylor.” These terms are most certainly brand keywords, just without the company name.
From a tactical standpoint, whether brands bid on their keywords or not is a decision made between the stakeholders involved.
However, since Google Ads was birthed in October 2000, this topic has been very controversial for several reasons.
Why Is Brand Bidding A Controversial Topic?
The controversy is rooted in a question that many brands or agencies will likely have been asked or have asked themselves, “Why should we pay for traffic that we can get for free through organic?”
This is a completely justified perspective on brand bidding, and if brands could guarantee that the Google search engine results page (SERP) would serve a single organic result – and no competitor ads when a brand term is searched – it would make the decision for and against much more straightforward.
However, times have changed, as have Google Ads campaign types and the way in which the SERP is delivered and used by searchers.
Brand bidding should be treated on a case-by-case basis, considering as many situational factors as possible, such as:
Competition.
Market penetration.
Keyword contextuality (a common case being a high volume generic keyword as part of your company name, e.g., “The Next Day Flower Company”).
Search demand.
Resellers.
Budgets.
Organic rankings.
It’s not always clear which path to take, but there are a host of reasons for and against.
What Are The Benefits Of Brand Bidding?
Strengthened Visibility
Serving a branded text ad on the SERP alongside your organic listings provides an additional link for searchers to click through to your site.
Let’s say you rank position one organically for your company name, have the knowledge panel displaying your company information, a text ad serving sitelinks alongside your review rating, and your company telephone number. The real estate you are maximizing on the SERP will serve as an authority for your brand.
Brand Protection
Being on the receiving end of competitor bidding is a common reason for marketers and agencies to activate their own brand campaigns.
Brands are free to bid on competitor company names and/or related keywords across Google, Bing, etc. This is a common strategy used by brands and agencies worldwide.
There are restrictions that forbid brands from including trademarked company names within ad copy, but outside of this, brands have free reign.
In my experience, there are a few reasons (among others) for why brands adopt this strategy:
Reactiveness – when a brand spots a competitor bidding on their brand terms to get their brand back to position one as soon as possible.
Exploration to see whether the results-driven are in line with KPIs and if the incremental value is worthwhile.
Necessity as competitor bidding is common practice, and bidding on a brand is a requirement to ensure users can find your brand immediately in a busy SERP.
Messaging And Control
The organic listing served for brand queries contains a customizable title tag and meta description.
By serving a branded search ad, the advertiser is given complete control over the messaging.
This is useful in many scenarios:
Poor organic rankings (e.g., not serving an organic listing for branded search, wrong page ranking above the homepage).
To instantly serve bespoke messaging for your branded ads (e.g., promotions, updates).
Combatting rewritten title tags and/or meta descriptions.
Creating bespoke sitelinks to direct users to different landing pages.
Click Costs
Context aside, brand cost-per-click (CPC) is likely cheaper than non-brand (generic keywords) as there is less competition, and your quality score will be strong.
Each industry (market and vertical) will have a different scenario in terms of how much a branded click costs.
Take Nike, for example. Its brand terms will be incredibly competitive as resellers, marketplaces, and affiliates will serve ads on the company name. However, a small ecommerce store might not have anyone bidding on its brand name.
With the typically cheaper click costs, bidding on branded keywords can be seen as a cost-effective strategy, but all other factors must be considered – a key one being the impact on organic performance.
Incrementality
This refers to driving better results overall by bidding on branded keywords than you would without, and is a very hot topic in PPC.
As with almost all arguments for and against brand bidding, the incremental gains driven through this strategy differ by brand.
Among other methods, turn-off experiments are common practice.
This is where marketers pause brand bidding for a treatment group while maintaining visibility for the control group to observe the impact of bidding on branded keywords.
Studies have shown that turning off brand campaigns can result in lower overall performance versus having brand ads live.
Others have shown barely any impact overall, with organic picking up the sales or leads that would have been driven through ads.
What is the best way to find out? Give it a test.
What Are The Drawbacks Of Brand Bidding?
Budget
Context plays a huge role (size of business, level of demand, market, etc.).
But aside from any incrementality testing – in a budgeting scenario at the very top level – spending money on brand terms that (to some degree) will be picked up through organic can be seen as an inefficient use of spend.
It’s not uncommon to see companies with huge levels of brand search demand cut their brand spend. eBay did this over a decade ago, and more businesses have followed suit since.
Freeing up this budget will impact brands with considerable online demand. For smaller brands with less search demand, it’s really a case of weighing up the savings and seeing how far this could go if it were to be reinvested into non-brand new customer acquisition.
Impact On Organic
If a searcher is looking for your company name and you have organic listings serving on Google, the chances are they know who your company is and will visit your company website (among other reasons).
By activating brand ads, the amount of traffic, sales/leads, and overall organic engagement will be impacted when the ad serves above the organic listing.
It really depends on the brand, team, goals, and key performance indicators (KPIs) in question to weigh up the impact of running brand ads on organic, and a good place to start is incrementality testing.
Existing Customers
In most cases, new and existing customers should be targeted separately for brand search.
Take ASOS, for example. Its brand traffic will be a mix of new searchers, existing customers looking to shop, existing customers looking to log in and send returns, speak to customer service, and more.
By not accounting for this within your strategy, efficiencies could be missed, and the budget could be spent on driving users to take actions that are not aligned with KPIs.
Different Takes On Performance Reports
Brand performance will almost always be stronger than traffic driven for searchers who are not aware of your brand.
Over the last 15 years, I’ve seen many accounts that blend together brand and non-brand performance in reporting, including shopping and Performance Max campaigns, which also serve brand queries.
In some cases, this is the lens that stakeholders want to see. But if a brand drives a large percentage of revenue/leads for a small percentage of spend, the overarching view of performance may look more preferable than it is from a new customer acquisition point of view.
Relationships (Particularly Resellers)
Brands who sell through resellers/marketplaces can often have a competitive auction for brand terms.
Mutual agreements can be a way to put structure in place, agreeing to not bid directly on the company name with the freedom to bid on brand + terms (e.g., brand + product), for example.
However, these agreements can be difficult to manage as many parties can be involved (resellers with in-house teams, new agencies onboarded into resellers, etc.).
As a result, the auction can become competitive, which will, in turn, drive up click costs and lower efficiency.
What Else Do You Need To Consider With Brand Bidding?
Performance Max
PMax is a consolidated campaign type offered by Google and Microsoft. This fully automated campaign serves across multiple networks, one being Google search.
This campaign can (and will) serve branded queries. I’ve seen brands report strong PMax performance many times under the assumption that it’s non-brand when, in fact, a high percentage of sales/leads are driven through their own brand searches.
There are controls in place to remove brand from PMax (account-level negative keywords, campaign-level negative keywords added via Google Support, etc.). However, if you want control, I’d recommend creating a brand search campaign and removing brand from PMax.
Broad Match
This Google Ads keyword match type allows your ads to serve on searches related to the meaning of the keywords you’re bidding on.
With this, as your brand falls under this category, the chances of your ads entering auctions for brand queries despite your keyword not containing your company name are high.
As with PMax (but a little easier to implement), you can remove your brand terms from your broad match campaigns with the use of negative keywords.
Alternatively, you could target brand queries through broad match with a comprehensive negative keyword strategy to ensure you are only allocating budget to brand.
The Semantics Of Your Brand Name
Let’s say your brand name contains a word + the product you sell, such as “123 designer handbags.”
When bidding on brand terms, you may see competitors in auction insights matching through broad and/or PMax for the term “designer handbags.”
This may impact your click costs, which can fluctuate over time depending on investment (e.g., brands increasing budgets across PMax during peak months).
Competitors may still bid on your brand terms directly, but others may pick these queries up through PMax or Broad, a key consideration for budgeting and planning.
So, Should You Be Bidding On Your Brand Keywords?
There isn’t a right or wrong answer, and claims that there is will likely be rooted in personal experiences.
Knowing which path to take ultimately comes down to context, and this path will change over time.
For agencies managing multiple clients, each brand should be treated on a case-by-case basis, and historical context is certainly needed.
For in-house marketing teams, the same logic applies but you likely have fewer brands to make the decision for.
The arguments for and against are there to guide you in your strategic decision-making.
The best place to start is by listing all considerations and questions, such as “What is our organic positioning like for brand?”, “How many resellers do we have and what brand terms are they bidding on?”, and “Do we have the budget?”
From here, whether you currently bid on brand and want to test incrementality, or if you’re interested in running a short stint and haven’t used this strategy before, ensure reporting is robust and that you are always testing.
If you’re not using AI to maximize your ad budget, chances are your competitors are, which could leave you behind.
But don’t worry — there are plenty of AI tools to help you get more from your campaigns, boost productivity, and drive revenue growth without spending more on ads. One of the most impactful marketing tools is Google Ads Smart Bidding.
In this post, we’ll break down five essential Smart Bidding strategies that can help you drive more revenue.
Google Ads Smart Bidding offers multiple options tailored to different campaign objectives. Choosing the right strategy depends on your specific goals and budget. Here are a few:
Maximize Conversions: This Smart Bidding strategy sets bids to maximize the number of actions taken by users, such as sign-ups, purchases, or form submissions. It is ideal if you want to drive more actions like form fills, sign-ups, or purchases.
Target CPA (Cost Per Acquisition): With the target cost per acquisition (CPA) strategy, you specify the amount you’re willing to spend to acquire a customer. Google Ads then automatically sets bids to achieve that desired CPA. This strategy is best for maintaining cost efficiency by acquiring customers at a specific price.
Target ROAS: The target ROAS strategy allows you to set a specific ROAS goal, and Google Ads adjusts bids based on expected conversion values. If maximizing revenue while maintaining a specific ROAS is your priority, this is your go-to strategy.
Enhanced Conversions: You can use Enhanced Conversions to optimize for specific actions or events that hold significant value for your business. This strategy leverages machine learning to predict and adjust bids based on the likelihood of driving valuable conversions, improving the overall return on ad spend, and enhancing the efficiency of your marketing campaigns. According to Google, marketers who use this strategy see a 5% average conversion rate improvement on Search.
Google offers new AI tools to take your Smart Bidding strategy to the next level, helping you expand your reach. You can pair these tools with your desired bidding strategy.
Here’s what they are and how they work:
Broad Match: Use this tool to capture a wider audience by covering related searches and synonyms. Craft a comprehensive keyword list, incorporating broad-match keywords to increase visibility and attract potential customers who may use different search terms. According to Google, marketers who use Broad Match in Target CPA campaigns see 35% more conversions, on average.
Performance Max: This AI-powered tool optimizes your campaigns across all Google networks (YouTube, Google Maps, etc.) and ad formats to maximize results. With Performance Max, the AI technology automatically adjusts bids to achieve the best possible results, making it ideal for driving conversions and optimizing ad spend across Google’s expansive network. According to Google, marketers who use Performance Max achieve 18% more conversions at a similar cost per action. By pairing Broad Match with your chosen Smart Bidding model, you can maximize your query coverage on Google search.
By combining Broad Match with Performance Max, you’ll significantly increase your reach and boost conversions.
3. Use Revenue Execution Platforms To Supercharge Smart Bidding
AI is only as good as the data it’s fed, and many marketers miss a crucial piece of the puzzle: phone call conversions.
This can be a significant problem, as our research shows that 20-50% of conversions come in over the phone in many high-stakes purchase industries like healthcare, home services, automotive, and telecommunications.
If you’re not tracking all of those phone call conversions, your Google Smart Bidding instance is likely underperforming. That’s because automated bidding tools track the number of conversions each ad variation drives and then optimize bids based on what’s performing best. If you’re not tracking the phone call conversions your ads drive, you’re not giving the tool a complete picture of your performance.
Illustration, Invoca, October 2024
Illustration, Invoca, October 2024
A revenue execution platform like Invoca allows you to track these call conversions and feed them directly into Google Ads. This enables Google’s Smart Bidding AI to optimize more effectively, ensuring your ad dollars are spent on what truly drives revenue.
Check out this video series, to learn more about revenue execution platforms.
Illustration, Invoca, October 2024
4. Optimize Retargeting With Rich Data Insights
Retargeting is an incredibly cost-effective way to drive more conversions, especially when you’re targeting people who have already interacted with your brand. To enhance your retargeting efforts, first-party data is key — and phone conversations are a treasure trove of insights that can be unlocked with revenue execution platforms like Invoca.
Phone conversations contain more insights than an online form fill ever could — when your customers call you, they tell you about their needs, preferences, and how to make them happy. Invoca’s AI analyzes these conversations at scale and mines them for insights. The beauty of it is that you can easily train the AI to capture whichever data points are most relevant to your business — for example, you can track products callers expressed interest in, if they were price-sensitive, and if they made a purchase.
Check out the graphic below to see more of the data points you can collect with Invoca:
Illustration, Invoca, October 2024
With these deep conversation insights, you can build more complete customer profiles and retarget leads with more relevant ads. Below are a few common examples of retargeting and suppression strategies marketers use with Invoca’s first-party data:
Retarget callers who didn’t make a purchase with ads for the products they mentioned over the phone.
Retarget callers who bought over the phone with ads for relevant companion purchases.
Retarget callers who expressed price sensitivity with ads touting a special discount code.
Suppress callers who bought over the phone from seeing future ads for that product or service.
5. Detect & Solve Call Experience Issues
Many marketers lose potential revenue because they aren’t aware of call experience issues—missed calls, long hold times, or unoptimized call scripts that don’t convert leads. You could be flushing good leads down the drain without even knowing it. Using a revenue execution platform, you get detailed reports on call handling and identify areas where improvements are needed.
Invoca shows you the total number of calls your Google Ads campaigns send to each location or contact center, the number of calls answered, the name of the agent who handled the call, the number of leads, and the number of calls successfully converted to revenue.
If you notice specific locations or contact centers have high unanswered call rates, you can collaborate with them to improve call routing procedures and staffing. If you learn that some agents have low phone call conversion rates, you can review their call recordings and transcripts to learn the cause and notify their managers to help them improve.
You’ll increase conversion rates and revenue from your Google Ads campaigns when you work with your contact centers and locations to correct these issues.
Below is a sample Invoca report showing call handling by location:
Illustration, Invoca, October 2024
Addressing these issues, from ensuring calls are answered promptly to refining sales scripts, can lead to better conversion rates and higher revenue from your ad campaigns.
By following these five tips and integrating a revenue execution platform, B2C marketers can fully take advantage of Google’s AI capabilities, driving conversions and revenue from every marketing dollar spent.
Ready to learn more about how Invoca’s AI-powered revenue execution platform can help you level up your marketing? Check out this video series to see how it’s done.
For those of us working within strict industries, managing paid media campaigns involves added layers of work that may not be included in less regulated companies.
Healthcare, finance, and political organizations are potential examples here, although many industries have their own quirks both in internal policies and ad platform restrictions.
According to EMARKETER, in 2023, the financial services industry made up 11.4% of U.S. digital ad spend, while healthcare & pharma entailed 7.3%.
With these highly regulated industries entailing close to 20% of spend together (not counting other categories), that means many paid search marketers have touched or will touch campaigns in these areas at some point in their career.
In order to manage campaigns successfully in these niches, you need to think about both how to efficiently work through processes in your own organization to ensure assets are approved and ready in a timely manner, as well as know what to expect after setting your campaigns live in the platforms.
In this article, I’ll share a few tips to help, applicable both to those in-house at highly regulated organizations and to agency partners managing ads.
Plan Ahead
Work the expected timeline for approvals and edits into your planning for a campaign, and be realistic about how long it could take.
When ad graphics need to be designed and also go through compliance and legal review, you can’t promise to have a campaign active in a week.
Think through all the pieces you need to build out a set of campaigns:
Documentation of targeting criteria, if that needs to be approved.
Then, you can work through a conservative schedule for the creation of each of these items, as well as planning to submit for approval and allowing additional time for edits and final approval.
Additionally, think through other items that may be outside of your immediate control as a paid search manager, such as landing page development and additional approvals needed for that.
Document Ad Formats & Use Consistent Templates
Often, the individuals within your organization reviewing your paid media assets are not at an “in the weeds” level understanding of how ads will display.
You can make the process smoother both for them and for yourself by clearly documenting individual ad formats and explaining nuances such as character limits and responsive ad functionality.
Provide screenshots of possible ways that ads can display and provide links to platform previews where relevant.
Building out an ad without activating it can provide an option to view it in multiple potential formats, especially for ad types like responsive display ads and Google Demand Gen that can appear in many different layouts.
Meta’s Creative Hub is also a useful tool to build out sample ads and grab screenshots.
Set up templates that you can use in the future, including guidelines directly in the documents, as well as formulas to flag issues such as going over character count.
These can be created in Excel documents, shared Google Docs, or proprietary tools within your organization.
Approve Multiple Variants At Once
In organizations where the wheels of internal approvals move slowly, getting multiple text and image variants approved at once can help ease the process of updating ads in the future.
This process may require some extra work upfront but will allow for more efficiency over time.
For instance, you may launch a Meta campaign using one text variant and four image variants.
When you’ve reached significance and are ready to move on to the next test, you can choose the best image and test it with multiple text variants.
Having those text variants approved ahead of time will allow flexibility in being able to roll out this next initiative immediately when the prior test has wrapped up instead of having to wait for additional approval.
Use Pinned Headlines And Descriptions
Often, regulated industries require you to include a precisely worded disclaimer in ad copy. Pinned assets in responsive search ads are your friend here, as you can ensure that they will always show.
Use the first or second headline position or the first description position, as beyond that, assets may be cut off.
To pin an asset in a Google Ads search campaign, click the thumbtack symbol that appears when you mouse over a headline or description field.
You can then select the number position to pin it to (1, 2, etc.). Note that if you pin multiple assets to the same position, Google may pick any of those assets to show.
Screenshot from Google Ads, September 2024
Unfortunately, campaign types such as Performance Max, Demand Gen, and Display don’t allow you to pin headlines, so you’ll need to be more careful in providing copy that contains your desired disclaimers for those formats, or you may decide they are not workable with your requirements.
You can also discuss allowing for a “one-click rule” that doesn’t require a disclaimer in ad copy as long as it appears on the landing page when users click through.
Review Automatic Optimizations & Recommendations
When every word of your ad copy needs to be approved by your organization to run, you need to be particularly careful about features such as Google’s automatically created assets, which can insert text you didn’t want in your ads.
Be sure to turn these off for each campaign, before your boss or client contacts see them applied in the wild.
To do so in bulk, go to the Campaigns section and navigate to Settings. Select all campaigns.
Screenshot from Google Ads, September 2024
Click the Edit dropdown and scroll until you find “Change automatically created assets settings.” You’ll then see the form below, where you can select “Off” and optionally provide a reason to give Google feedback.
Screenshot from Google Ads, September 2024
Additionally, watch for settings that modify images in unexpected ways, such as Meta’s image optimization features, which can result in unapproved graphic variants being out in the wild or even the addition of animation and music.
Look for the Advantage+ Creative section in ad set settings, and you’ll see an option to edit and turn off unwanted variations.
Screenshot from author, September 2024
In general, be mindful that platforms are constantly testing new ways to automatically optimize and add assets. Watch for updated settings and checkboxes that you may not have seen before.
Familiarize Yourself With Industry-Specific Guidelines
Ad platforms often have their own stricter guidelines for sensitive industries, and you’ll need to be aware of what ad content and targeting settings can trigger disapprovals.
For instance, Google does not allow certain demographic targeting for finance or healthcare. Remarketing is also banned for some industries.
On the Meta Ads front, housing, credit, and employment ads are particularly restricted, with limitations on available targeting criteria. Political ads also require a verification process before being approved to run.
You can keep up with these updates in a variety of ways:
Visit ad platform support pages, where they will provide updates on upcoming policy changes. Here are a few links to current policy resources, each of which outlines technicalities for restricted content:
If you have platform reps, they can share additional guidance, often with more detailed documentation not publicly available on the web, and can reach out to internal contacts to clarify specific questions you may have.
While it’s not the ideal path to go, you’ll inevitably learn do’s and don’ts for your industry through trial and error as ads and campaigns are flagged in your accounts. Be sure to make note of disapprovals you’ve encountered and how they were resolved.
Often, ad platforms will provide a notice in the platform showing the specific policy violation or restriction that’s triggered for your ads.
However, particularly in sensitive niches, there are cases where ads may not run or be limited from running without clear notice.
In these cases, it’s helpful both to be as familiar with policies as possible when negotiating with support, as well as working directly with a platform rep if possible.
Use The Ad Platform Appeal Process
If you’ve complied with ad platform policy for your industry but are still facing disapproval issues, you can generally appeal for support.
The Google Ads Policy Center (Tools > Troubleshooting > Policy Manager) offers a hub where you can track the status of appeals, and other major platforms also offer options to monitor the status of appeals.
This is also an area where reps can sometimes be helpful in pushing through ad reviews or providing feedback that’s not showing in the ad platform interface.
Start Adapting Your Approach
If you’re managing PPC campaigns for a highly regulated industry, think through these tips to see where they can help improve your processes.
Do you have the internal steps for campaign planning, approval, and execution documented?
Are you fully familiar with how the ad platforms approach your industry?
Take the steps to meet with your team or client and determine how you can apply these tips.
This is it, the final chapter in our journey to mastering value-based bidding!
We have covered a lot of ground, from determining whether value-based bidding is a fit for your business, to understanding what data you’ll need, to assigning the right values, and choosing the right bid strategy.
After you have executed your value-based bidding strategy in your campaigns, it’s important to understand how and when to measure performance and how to optimize for your goals.
Check out the last two-minute video in our series on value-based bidding, and then we’ll go deeper into the details of optimizing value-based bidding.
When To Start Analyzing
To get a clear picture of how your campaigns are performing, you need enough data to work with.
Aim for at least 50 conversions or a full month of data, whichever comes first.
Remember to exclude the initial ramp-up period when your campaigns are still learning and gathering data. This ensures you’re analyzing stable and representative performance.
Evaluating Performance: Focus On The Value Metrics
In value-based bidding, we’re primarily concerned with two key metrics:
Conversion Value: This represents the total value generated from conversions driven by your ads. It’s the monetary worth of the actions users take after clicking on your ad, whether it’s a purchase, a sign-up, or a subscription.
Average Target Return On Ad Spend (ROAS): This is the traffic-weighted average ROAS that your bid strategy optimized for over a given time period. If you don’t see this metric in your performance table, be sure to add it from the column icon at the top of your Campaigns table. It’s available for both standard and portfolio bid strategies.
Optimization: Balancing Efficiency And Growth
If you think of your value-based bidding campaign as a car, your target ROAS and budget are your controls to adjust its speed and efficiency. To take this analogy further:
Target ROAS: This is like setting your cruise control. Adjusting your target ROAS influences how aggressively your bids compete in auctions.
A higher target ROAS means your bids will be more conservative, and you’ll likely compete in fewer auctions. Set a higher target ROAS if you want to prioritize efficiency.
Setting a lower target ROAS allows for more aggressive bidding. You’ll likely compete in more auctions and reach more customers. Set a lower target If you want to prioritize growth.
Budget: This is your gas tank. The amount of gas you put in depends in part on the bidding strategy you’ve chosen.
If you’ve set a target ROAS, ensure your budget aligns with your target ROAS and allows the system enough room to optimize effectively. You want to always have plenty of gas in the tank.
With a Maximize Conversion Value bidding strategy (without a target ROAS), the system aims to use all the gas you give it each day. It prioritizes driving the highest possible value within a specific allocated budget.
Understanding The Relationship Between Your Controls
Just like in a car, how you use the controls affects your overall performance.
Bid Limits – Don’t Limit Your Speed
You might be tempted to set limits on how much you pay per click (like setting a maximum speed limit) by setting bid limits. However, they can actually constrain the system and hinder performance.
It’s like trying to win a race while keeping your car below a certain speed. In value-based bidding, it’s best to let the system automatically adjust your bids based on the potential value of each click.
You may opt to set bid limits when you’re getting started or are in a highly competitive sector, but keep these tradeoffs in mind as you evaluate performance.
Note that bid limits are only used in Search Network auctions and only available for portfolio bid strategies.
Budget Constraints – Ensure Enough Fuel
If you’re using a target ROAS, make sure your budget isn’t constrained. Otherwise, it’s like trying to drive a long distance with very little gas. You won’t get very far.
A restrictive budget can limit the system’s ability to participate in valuable auctions and achieve your desired return. The system needs a sufficient budget to effectively optimize for your target ROAS.
More Optimization Tools
Use these additional tools to help you optimize your value-based bidding campaigns:
Bid Simulators
These simulators allow you to experiment with different ROAS targets and see the estimated impact on key metrics like conversions and cost when adjusting your targets.
Bid Strategy Report
This report provides insights into your campaign performance over time. It helps you understand how your bids are performing, diagnose any unusual fluctuations, and identify areas for improvement.
The conversion value delay shows how long it takes for customers to convert. This amount of time is the recent period to exclude when evaluating performance, as some conversions may still be reported later.
This also is where you’ll find the “Actual ROAS” metric, which represents the actual ROAS that this strategy was able to achieve. Keep in mind that small fluctuations in performance are normal.
Performance Planner
Forecast target and budget scenarios across your campaigns.
Performance Planner simulates relevant ad auctions over the last seven to 10 days, including variables like seasonality, competitor activity, and landing page.
It also includes conversion delay estimates for Search and Performance Max impact estimates.
Portfolio Bidding & Shared Budgets
These features enable you to allocate spend across a group of campaigns. They can be especially useful when using a target ROAS since a shared budget will automatically reallocate any underused budget to budget-capped campaigns.
Only apply shared budgets to campaigns that share the same goal (e.g., don’t have campaigns with different targets or bidding strategies sharing a budget).
Also, note that shared budgets can’t be applied to campaigns that are part of an experiment.
Embracing The Journey
Optimization is an ongoing process.
As your business evolves and your understanding of your customers deepens, revisit your conversion values to ensure they still accurately reflect the worth of each lead.
Adding “value” to your advertising strategies will allow you to go beyond customer (or lead) acquisition costs, focusing on driving return in your campaigns.
You’re now equipped with the knowledge and tools to bid to value.
By focusing your budget on finding the leads that align with your goals, you can drive meaningful results for your business.
Now, we’re going to cover the final step before activating your value-based bidding strategy: choosing the right bid strategy for your lead generation campaigns.
The big benefit of value-based bidding is that it allows you to prioritize conversions that are most likely to drive higher revenue or achieve your specific business goals, such as sales, profit margins, or customer lifetime value.
By assigning different values to different conversion actions, you gain greater control over your bidding strategy and optimize for conversions that deliver the most significant impact.
Whether it’s a purchase, a lead, or a specific action on your website, value-based bidding ensures that your bids reflect the true worth of each conversion, enabling you to maximize your return on investment (ROI).
The bidding strategy you select to optimize for value depends on a few factors. Check out this two-minute video for a quick overview, and then keep reading to dive deeper.
Which Value-Based Bidding Strategy Should You Choose?
With value-based bidding, Smart Bidding predicts the value of a potential conversion with each auction.
If the bid strategy determines that an impression is likely to generate a conversion with high value, it will place a higher bid.
If this bid strategy determines that the impression isn’t likely to generate a high-value conversion, it’ll place a lower bid.
Value-based bidding can use data from all of your campaigns, including the conversion values you are reporting, to optimize performance.
It also uses real-time signals, such as device, browser, location, and time of day, and can adjust bids based on whether or not someone is on one of your remarketing lists.
To start bidding for value, ensure the following:
Measure at least two unique conversion values optimized for your business.
Have at least 15 conversions at the account level in the past 30 days. (Note: Demand Gen should have at least 50 conversions in the past 35 days, with at least 10 in the last seven days or 100 conversions in the past 35 days.)
You’ve got two bidding strategy options to tell Google how you want to optimize for value:
Maximize conversion value.
Maximize conversion value with a target ROAS.
Here’s a quick way to think about each before we dig in further:
Maximize conversion value
Target ROAS
Goal
Maximize conversion values for a specific budget.
Maximize conversion values for a target return on ad spend.
When
Your priority is to maximize value and spend the budget.
You don’t have a specific ROI target.
You have a specific ROI target.
Maximize Conversion Value
This option focuses on maximizing conversion value within a defined budget.
It’s suited for advertisers who prioritize driving the highest possible value within a specific allocated budget.
Advertisers often start with this before moving to a target ROAS strategy.
Maximize Conversion Value At A Target ROAS
This option allows you to set a specific target return on ad spend (ROAS) and instructs Google Ads to optimize your bids to achieve that target while maximizing conversion value.
Target ROAS: Why Your Budget Should Be Uncapped
When bidding with a target ROAS, your campaign budget should not be limited or capped.
That may sound scary at first, but let me reassure you that it doesn’t mean you don’t have control over your campaign spend!
Your ROAS target is the lever that manages your spend.
With a target ROAS, you’re telling Google to optimize for value at that specific target rather than find as much value within a specific budget.
So, when your budget is limited, it potentially prevents the system from having the flexibility to find the next conversion at your target.
Setting Your ROAS Targets
You can choose whether to use a recommended target ROAS or set your own.
When setting ROAS targets, use the last 30 days’ return on ad spend as a benchmark.
Google’s target ROAS recommendations are calculated based on your actual ROAS over the last few weeks.
This recommendation excludes performance from the last few days to account for conversions that may take more than a day to complete following an ad click or interaction (such as an engaged view).
While you can launch value-based bidding directly, you may want to start with a small test using a campaign experiment. This allows you to compare the performance of value-based bidding against your existing bidding strategy and make data-driven decisions.
You have two options to create a campaign experiment:
One-Click Experiment From Recommendations Page
You may see suggestions on implementing value-based bidding on your Recommendations page.
The recommendation to “Bid more efficiently with Maximize conversion value” will show if our simulations identify that your account is measuring two or more unique conversion values and will likely benefit from this strategy.
From this recommendation, you can create a one-click experiment to test the impact of value-based bidding on a specific campaign.
Custom Experiment
You also have the option to create a more tailored experiment to test value-based bidding in your campaign.
Be sure to choose a campaign that receives sufficient traffic and conversions to generate statistically significant results.
Configure the experiment to use value-based bidding, while the original campaign continues to use your existing bidding strategy.
See the instructions here to set up a custom experiment.
How To Jumpstart Value-Based Bidding
You can employ strategies to jumpstart the system, such as initially setting a low ROAS target or starting with Maximize conversion value without a ROAS target.
If you opt to start with Maximize conversion value without a target, be sure that your budgets are aligned with your daily spend goals.
Allow A Ramp-Up Period Before You Optimize
Once you’ve launched value-based bidding, give the system a ramp-up period of two weeks or three conversion cycles. This allows Google Ads to learn and optimize your bids effectively.
When measuring performance, be sure to exclude this initial period from your analysis to obtain accurate insights.
We’ve now covered all the basics for getting started with value-based bidding.
In our last segment, we’ll discuss monitoring and optimizing your performance to drive value for your business.
Whether you’re an in-house marketer or working at an agency, effective bid management is crucial for scaling success.
However, understanding how to optimize and adjust bids effectively in Google Shopping ads can be challenging, especially with all the different settings and levers that can be pulled!
Google Shopping has come a long way since its original inception in 2022 – and up until 2012, Google Shopping was free!
It seems that every year, more is needed to win the bidding war against rising costs in the Google Ads platform and keep brands’ profitability in check.
In this article, we’ll explore the strategies, tools, and best practices that can help you win the bidding war and maximize ROI on your Google Shopping campaigns.
1. Understanding The Google Shopping Auction Model And Its Impact On Bidding
Before we jump into bid management strategies, it’s essential to understand how Google Shopping works behind the scenes. Unlike Search campaigns, Google Shopping doesn’t rely on keywords to trigger ads.
Instead, product listing ads (PLAs) appear based on a combination of your product feed data and the user’s search intent. Google uses a unique auction system, and your bids interact with factors like relevance, user behavior, and other competitors in the space.
The Role Of Quality Score In Google Shopping
Quality Score plays a role in Google Shopping bid management, but a bit differently from Search campaigns.
Factors such as the product feed quality, landing page relevance, and historical campaign performance can influence how often your ads appear and at what cost. Here’s how to ensure you’re optimizing for Quality Score in Shopping:
Product Feed Optimization: Ensure that your product titles, descriptions, and attributes are clear and relevant.
Accurate Categorization: Place your products in the most appropriate categories for better relevance.
Optimized Landing Page: Make sure the page that users land on after clicking the ad is optimized for a better user experience, and don’t forget about mobile!
How Bid Amount Affects Visibility
Higher bids don’t always guarantee visibility, and low bids don’t always exclude you from auctions.
It’s a balance of ensuring your product feed is optimized while bidding strategically based on the product’s potential to convert.
Bidding strategies should reflect the actual performance of your products and overall business goals related to those campaigns.
2. Craft A Strategic Bidding Approach
One of the first decisions you need to make when managing Google Shopping bids is whether to rely on manual or automated bidding.
Both approaches have advantages depending on your business objectives, campaign budget, and the scale of your operations.
Manual Bidding: This gives you more control, allowing you to adjust bids based on performance. For example, if you notice that certain products are underperforming, you can reduce their bids to allocate budget to higher-performing products.
Automated Bidding: Automated strategies like Maximize Conversion Value or Target ROAS (Return on Ad Spend) use machine learning to adjust your bids dynamically based on real-time auction signals. These can be ideal for large product catalogs or when performance data is inconsistent across different products.
Google has added more automated bidding strategies over the years, making it easier to effectively bid based on your business goals.
However, the added complexity of choosing Standard Shopping campaigns versus the newer Performance Max campaign type allows for different bid strategies.
If choosing Standard Shopping campaigns, you have the option of these two automated bid strategies:
Maximize Clicks: Helps you get as many clicks as possible within your target daily budget.
Target ROAS: Helps you maximize conversion value while reaching an average return on ad spend that you choose.
Screenshot from author, August 2024
If you choose to set up a Performance Max campaign with your product feed linked, you have the option of more bid strategies:
Maximize Conversions: Helps generate the most amount of conversions within your daily budget, regardless of conversion value.
Maximize Conversion Value: Helps generate the highest conversion value within your daily budget.
Additionally, Performance Max campaigns have the optional “Target ROAS” input to yield a little bit more control over your campaign bid strategy.
Lastly, you now have the option to choose how to bid for acquiring new customers – a very welcome addition to further maximize those ad dollars!
In Google Ads, you can choose to either bid higher for new customers than existing customers. Or, you can bid for new customers only.
Screenshot from author, August 2024
For Google Shopping campaigns specifically, you may want to choose to bid higher for new customers instead of excluding them altogether, especially if your brand is used to having repeat customers.
This essentially means you’re willing to pay more to get a new customer, knowing they will likely purchase again in the future, leading to incremental revenue.
For higher-ticket items that users may only purchase once every few years, it may be worthwhile to choose ‘bid for new customers only’.
At the end of the day, make sure to choose the customer acquisition strategy that aligns with your business goals.
Segmentation And Granularity In Bidding
A key component to effective bid management is to segment your campaigns and ad groups properly. This allows for more granular control over bids and enables better performance optimization.
Product-Level Bidding: Rather than bidding at the campaign or ad group level, product-level bidding allows you to adjust bids based on each product’s unique performance metrics. Products that generate more conversions or revenue should receive higher bids, while underperforming products can have bids scaled back.
Segment by Profit Margin or Price Point: Grouping products based on their profit margins or price points can help you adjust bids based on the product’s value to your business. High-margin products may justify higher bids since they offer better ROI.
Seasonality and Time Sensitivity: Adjust bids based on trends in user behavior throughout the year. For instance, products may perform better during certain seasons or promotional events, requiring temporary bid increases.
3. Use Your Own Data & KPIs To Inform Your Bid Management
Knowing which metrics to monitor is critical for making informed bidding decisions. Below are the core KPIs to watch closely:
Cost Per Conversion (or CPA) and Return On Ad Spend (ROAS): These two metrics provide insights into your campaign’s efficiency. You want to identify which products or campaigns have the highest ROAS and optimize bidding for those.
Impression Share and Click-Through Rate (CTR): These metrics can give you a sense of how your bids are affecting visibility. If you’re seeing low impression shares on profitable products, it may be time to increase your bids.
Conversion Rate: Analyze conversion rates to identify which products are most likely to turn clicks into sales, then adjust your bids accordingly.
Lifetime Value (LTV) and Customer Acquisition Costs (CAC): If your business has repeat purchases, focusing on lifetime value can give you an advantage when bidding on products that may have lower immediate returns but higher long-term value.
Knowing these KPIs for your business can help shape your bid management strategy and make strategic changes based on your Google Shopping performance in comparison to your business’s set KPIs.
For example, if you have an average conversion rate of 4% as a whole, but your Google Shopping campaigns are only providing a 2% conversion rate, that may tell you something needs to be optimized.
You may need to take a look at the keywords your products are showing up for and do some negative keyword management. Additionally, maybe your ads aren’t reaching the right users and you need to further refine audience targeting within your campaigns.
Another example of using your own data is knowing your profit margin for products. If you have a subset of products that have a high-profit margin, you can add a custom label into your product feed that denotes those products.
From there, you can segment your campaigns to have a higher priority on those particular products or choose to bid higher on them because they’re worth more to you and your business.
Leveraging Bid Simulators And Other Tools
Google also provides several tools that can help inform your bid decisions:
Bid Simulators: These help you understand how different bid levels would impact your impression share, clicks, and conversions. You can use this data to adjust your bids in a way that maximizes your return without overspending.
Custom Labels: By using custom labels in your product feed, you can segment your products by performance, seasonality, or promotion. This way, you can quickly adjust bids based on these factors.
Scripts and Third-Party Tools: Tools like Optmyzr or custom Google Ads scripts can automate bid adjustments based on performance data, allowing you to focus on strategy rather than manual labor.
4. Optimize Your Bid Management For Long-Term Success
Bid management is not a “set it and forget it” exercise. Continual testing, analyzing, and adjusting are necessary to maintain and improve campaign performance over time.
Bid management should also not be used for daily volatile changes at the campaign level.
If you’re micromanaging performance each day and changing bid strategies too often, you may end up with sub-optimal performance because you’re not giving Google enough time to learn and optimize based on performance.
It’s about finding a healthy balance between “set and forget” and “over-optimizing”. Going back to point #3, knowing the values of your core business metrics and goals makes it easier to react to performance swings and know when to take action.
Some ways to optimize for long-term success include:
A/B Testing on Bids: Running A/B tests on bid adjustments allows you to assess the impact of bid changes without risking your entire budget. Test different bidding strategies on subsets of your campaigns or products to see what delivers the best performance.
Seasonal Adjustments: Stay ahead of trends by adjusting your bids before key periods like Black Friday or holiday shopping spikes. Predictive adjustments can help you capture market share before your competitors ramp up.
Monitor Competitor Behavior: Keep an eye on your competition. If you notice that competitors are aggressively bidding on certain products, you may need to adjust your strategy to compete, either by raising bids or adjusting product listings.
Prepare For Future Changes In Google Ads
Google Shopping is constantly evolving, and as machine learning models become more sophisticated, the way bids are managed will continue to change.
Staying informed about new features, tools, and best practices will help you maintain a competitive edge. Subscribe to updates, attend industry events, and engage with the community to keep your knowledge fresh.
Summary
Google Shopping bid management requires a balance between data-driven strategies, an understanding of the auction system, and a willingness to experiment and adapt.
By leveraging the tips and strategies discussed in this article, you’ll be better equipped to navigate the complexities of Google Shopping and drive profitable growth for your brand or clients.
Keep refining your approach, test new strategies, and stay on top of Google Shopping developments to stay competitive and ahead of the bid war.
The next key is to assign the right values for the conversion actions that are important to your business.
We know this step is often seen as trickier for lead gen-focused businesses than, say, ecommerce businesses.
How much is a whitepaper download, newsletter signup, or online quote request worth to your business? While you may not have exact figures, that’s OK. What you do know is they aren’t all valued equally.
Check out the quick 2-minute video in our series below, and then keep reading as we dive deeper into assigning conversion values to optimize your value-based bidding strategy.
Understanding Conversion Values
First, let’s get on the same page about what “conversion value” means.
Conversion value is simply a numerical representation of how much each of these conversions is worth to your business.
Estimating The Value Of Each Conversion
Ideally, you’d have a precise understanding of how much revenue each conversion generates.
However, we understand that this is not always feasible.
In such cases, it’s perfectly acceptable to use “proxy values” – estimations that align with your business priorities.
The important thing is to ensure that these proxy values reflect the relative importance of different conversions to your business.
For example, a whitepaper download may indicate less “value” than a product demo registration based on what you understand about your past customer acquisition efforts.
Establishing Proxy Values
Let’s explore some scenarios to illustrate how you might establish proxy values.
Take the event florist example mentioned in the video. You’ve seen that clients who provide larger guest counts or budgets in their online quote requests tend to result in more lucrative events.
Knowing this, you can assign higher proxy values to these leads compared to those with smaller guest counts or budgets.
Similarly, if you’re an auto insurance advertiser, you might leverage your existing lead scoring system as a basis for proxy values. Leads with higher scores, indicating a greater likelihood of a sale, would naturally be assigned higher values.
You don’t need to have exact value figures to make value-based bidding effective. Work with your sales and finance teams to help identify the key factors that influence lead quality and value.
This will help you understand which conversion actions indicate a higher likelihood of becoming a customer – and even which actions indicate the likelihood of becoming a higher-value customer for your business.
Sharing Conversion Values With Google Ads
Once you’ve determined the proxy values for your conversion actions, you’ll need to share that information with Google Ads. This enables the system to prioritize actions that drive the most value for your business.
To do this, go to the Summary tab on the Conversions page (under the Goals icon) in your account. From there, you can edit your conversion actions settings to input the value for each. More here.
As I noted in the last episode, strive for daily uploads of your conversion data, if possible, to ensure Google Ads has the most up-to-date information by connecting your sources via Google Ads Data Manager or the Google Ads API.
Conversion value rules allow you to adjust the value assigned to a conversion based on specific attributes or conditions that aren’t already indicated in your account. For example, you may have different margins for different types of customers.
Instead of every lead form submission having the same static value you’ve assigned, you can tell Google Ads which leads are more valuable to your business based on three factors:
Location: You might adjust conversion values based on the geographical location of the user. For example, if users in a particular region tend to convert at a higher rate or generate more revenue.
Audience: You can tailor conversion values based on specific audience segments, such as first-party data or Google audience lists.
Device: Consider adjusting conversion values based on the device the user is using. Perhaps users on mobile devices convert at a higher rate – you could increase their conversion value to reflect that.
When implementing these rules, your value-based bidding strategies (maximize conversion value with an optional target ROAS) will take them into account and optimize accordingly.
Conversion value rules can be set at the account or campaign levels. They are supported in Search, Shopping, Display, and Performance Max campaigns.
Google Ads will prioritize showing your ads to users predicted to be more likely to generate those leads you value more.
Conversion Value Rules And Reporting
These rules also impact how you report conversion value in your account.
For example, you may value a lead at $5, but know that these leads from Californian users are typically worth twice as much. With conversion value rules, you could specify this, and Google Ads would multiply values for users from California by two and report that accordingly in the conversion volume column in your account.
Additionally, you can segment your conversion value rules in Campaigns reporting to see the impact by selecting Conversions, then Value rule adjustment.
There are three segment options:
Original value (rule applied): Total original value of conversions, which then had a value rule applied.
Original value (no rule applied): Total recorded value of conversions that did not have a value rule applied.
Audience, Location, Device, or No Condition: The net adjustment when value rules were applied.
You can add the conversion value rules column to your reporting as well. These columns are called “All value adjustment” and “Value adjustment.”
Also note that reporting for conversion value rules applies to all conversions, not just the ones in the ‘conversions’ column.
Conversion Value Rule Considerations
You can also create more complex rules by combining conditions.
For example, if you observe that users from Texas who have also subscribed to your newsletter are exceptionally valuable, you could create a rule that increases their conversion value even further.
When using conversion value rules, keep in mind:
Start Simple: Begin by implementing a few basic conversion value rules based on your most critical lead attributes.
Additive Nature of Rules: Conversion value rules are additive. If multiple rules apply to the same user, their effects will be combined.
Impact on Reporting: The same adjusted value that’s determined at bidding time is also used for reporting.
Regular Review for Adjustment: As your business evolves and you gather more data, revisit your conversion values and rules to ensure they remain aligned with your goals.
Putting The Pieces Together
Assigning the right values to your conversions is a crucial step in maximizing the effectiveness of your value-based bidding strategies.
By providing Google Ads with accurate and nuanced conversion data, you empower the system to make smarter decisions, optimize your bids, and ultimately drive more valuable outcomes for your business.
Up next, we’ll talk about determining which bid strategy is right for you. Stay tuned!
