Which Metrics Matter In PPC? via @sejournal, @navahf

Pay-per-click (PPC) advertising has evolved quite a bit since it first began in the early days of the internet.

Metrics like cost per click (CPC) remain an important part of the conversation, while others (like average position) have retired.

Understanding the history of each major metric, as well as how they relate to each other, is critical to determining which metrics to focus on.

This guide will attempt to be as agnostic as possible on account structure strategy (though a certain amount of subjectivity is unavoidable).

Here’s what we’ll be covering:

• The major metrics in PPC: In this case, we define PPC as any channel where you pay per click. This means there will be some video/social metrics.
• Relationships between metrics.
• Which metrics matter today and likely will matter in the future?

Major Metrics In PPC

Given that Google is a dominant player, we’ll focus mostly on those metrics. However, we’ll call out additional network metrics where needed.

Additionally, we’re not separating YouTube from Google Ads. We will only cover “go do” metrics vs. informational ones (i.e., the setup metrics).

By the way, this section is a bit beginner-friendly. So, if you’re already familiar with PPC metrics, skip ahead to the next section.

Relationship Between Metrics

There’s a lot of interconnectivity between PPC metrics, and it can be a bit daunting to know which relationships to build strategy around.

While there’s a case to be made for every metric playing a role in your account choices, these are the top relationships to focus on.

CTR And Conversion Rate

The most critical relationship to focus on is CTR vs. conversion rate.

This is because these two metrics help hold your ad account and website accountable for their respective roles in winning customers.

If your CTR is really good and your conversion rate is not, there are a few potential paths you can explore:

• Is the landing page letting you down? This could be a design issue or a technical one (conversion tracking isn’t configured correctly).
• The ads are engaging, but they target people who aren’t quite ready to purchase. Adding more prequalifying language into the ads can solve this.
• Targeting is outright incorrect, and the clicks are accidental. This can be caused by search partners with display expansion or misconfigured Performance Max campaigns.

When CTR is low but the conversion rate is good, the fixes will be a little different:

• The ad creative may not be enticing enough. You may want to be more direct in asking folks to contact you or order now.
• Your budget may not support prime-time bidding, so you end up serving a lot during off-hours when folks are less likely to engage. You can correct this with an ad schedule to force budgets to only spend during peak hours.
• There may be a double or triple counting issue, where you’re getting more than one conversion count per click. Use the “conversion action” segment to identify any false positives. This is critical to catch because double-counting conversions will influence smart bidding and reporting.

When both are good or bad, it can be a little tougher to know where to focus optimization or scale efforts.

The best starting point will always be your customers and the quality of your leads.

Average CPC And Search Terms/Placement Type

It can be very tempting to overoptimize for cheap clicks, but if you only focus on CPC, you may price yourself out of the auction.

While we don’t have full search term access, leveraging what we do have is critical to making informed choices around which ideas we budget for.

If your average CPCs are low for your industry, here is what you should check for:

• Branded queries sneaking into non-branded campaigns. This can happen if you’re using broad match, as well as if you don’t use negatives to sequester branded traffic.
• Non-search placements are using search budget. These placements aren’t inherently bad, but if you’re bidding for search, you will overbid on other placements.
• If you’re losing more than 50% impression share due to rank, you are likely choking volume too much to be profitable.

When the average CPC is high for your industry, here is what to check for:

• Accidental duplicates that might be causing you to bid against yourself (and potentially cause serving issues). While search terms will be the best source of truth for this, you also can check a keyword’s status. If you get the “another eligible keyword was chosen” status more than 25% of the time, you likely need to clean up close variant duplicates.
• The bidding strategy may be forcing you to bid too high because there isn’t enough conversion data to inform smart bidding. Consider switching back to manual or using target impression share/max clicks with a bid cap. The bid cap should be no more than 10% of your daily budget.

CPA And ROAS’s Influence On Volume/Value

One reason Smart Bidding (Max Conversions and Max Conversion Value) catches a lot of heat is that people don’t fully understand how to help them learn profitable budget allocation.

It is very normal for a brand-new account using Smart Bidding to have a bad experience if they don’t have enough conversions (30+) in a 30-day period.

When you need volume, CPAs and ROAS have to be more conservative. For example, you might be willing to take a $100 CPA on a $300 product/service. The ROAS goal would be 300% (we spent $100 to achieve $300).

This mindset is really important for product/company launches, as well as if you are facing a shortage of leads.

Conversely, if you’re under scrutiny for marketing costs, you may set more aggressive goals, so each customer is worth more (even if you get fewer of them).

For example, I might only be willing to pay $30 for that $300 product/service.

This inherently means that I will get fewer leads than when I was willing to pay $100 to acquire them, but that might also provide needed operational filters (not overloading sales/customer success teams with leads).

The ROAS equation is a little tougher because you still want to factor in lifetime value. Most industries do well somewhere between a two-time and five-time ROAS goal.

It’s also worth noting that your CPC will be directly impacted by which school of thought you adopt. Absolutely use bid floors and caps to make sure you bid enough to enter the auction, as well as balance how much of your budget goes to a single click.

As a general rule, you don’t want more than 10% of a daily budget going to one click because a 10% conversion rate is really good for non-branded.

However, the floor is a bit trickier to set. If you don’t have the data for your industry CPCs, consider starting with 3% of your daily budget.

Which Metrics Matter

Ultimately, the metrics that matter are the ones enabling you to “go do” off of the analysis, as well as the ones weighted in the auction.

These metrics are weighted in the auction:

• Conversions.
• CTR.
• CPC.
• Quality score*: While this is not officially weighted in the auction anymore, the core signals informing it still are.

These metrics are your “go do’s:”

• CPA/ROAS: Are you making enough money off of your ads? If not, adjust targets.
• Impression share: Based on what, if any, is lost to, make structural, bidding, or budgeting changes
• Conversion rate/CTR: Are the account and website supporting each other in winning business, and do you trust the reporting of both?

Metrics like Ad Strength and optimization score are friendly suggestions but don’t actually impact your account performance.

Final Takeaways

It can be tough to know where to focus on your ad account.

Hopefully, this review of the metrics and their relationships to each other helps you prioritize what to focus on, report on, and act on.

More resources:

Featured Image: kenchiro168/Shutterstock

Mastering AI-Powered PPC Bid Strategies: A Guide To Maximizing Performance via @sejournal, @brookeosmundson

Let’s talk about PPC bidding strategies. If you’ve ever felt like you’re throwing darts in the dark when it comes to picking the right one, you’re not alone.

When I first started in Google Ads, the only bidding strategy available was “Max CPC” bidding, meaning everything was manual.

Nowadays, there are many AI-powered bidding strategies to fit your diverse campaign needs.

These strategies aren’t exactly a “one size fits all” deal for your campaigns.

Not only are there more choices than ever to reach your goals, but the inputs you set at the campaign level are just as crucial for success.

The truth is that choosing the right bid strategy can be the difference between crushing your PPC goals or watching your budget go up in flames.

Let’s dive into the nitty-gritty of AI-powered bid strategies, or Smart Bidding strategies, and figure out how to maximize performance for each of your campaigns.

How Many PPC Bid Strategies Does Google Ads Have?

Google Ads offers multiple types of bidding strategies aimed at meeting the goals of all available campaign types.

These strategies use Google AI to optimize in every single auction, typically known as “real-time bidding.”

It takes many factors into consideration at the time of auction outside of your bidding strategy, including device, location, time of day, operating system, and many more.

Google categorizes their Smart Bidding strategies into three main goals:

• Conversions.
• Clicks.
• Viewability.

It’s important to match your Google Ads bid strategies with the campaign’s specific advertising objectives.

If you’re not sure where to start with goals, consider these points when making a bid strategy decision:

• Are you looking for users to take direct action on your website?
• Do you want to increase website traffic overall?
• How important is brand awareness to you?
• Are you looking to increase video engagement and interaction?
• Are you focused on product or brand consideration when users are actively shopping around?

Conversion-Based Bid Strategies

Currently, Google Ads offers these Smart Bidding strategies aimed at increasing conversions:

• Target Cost per Action (CPA).
• Target Return on Ad Spend (ROAS).
• Maximize Conversions.
• Maximize Conversion Value.
• Enhanced Cost per Click (eCPC).

Click-Based Bid Strategies

If your main goal is gaining website traction, the only automated bid strategy currently available is Maximize Clicks.

Manual CPC bidding is still an option, but we’ll get to that later on in the article.

Visibility-Based Bid Strategies

Not all campaigns aim to capture the final conversion, and that’s ok!

You need to have some element of brand awareness coming in, otherwise the group of people who know about your product will continue to shrink.

If your campaign goals are focused on awareness, consider these automated PPC bidding strategies:

• Target Impression Share.
• CPM.
• tCPM.
• vCPM.

Next, we’ll examine the main AI-powered PPC bidding strategy more granularly to get a better understanding of each one, as well as when it makes sense to choose that particular bid strategy.

Read more: PPC Automation Layering: How To Get More From Google Ads

Target Cost Per Action (CPA) Bidding

Target CPA lets you set the amount you’re willing to pay for a conversion. Google Ads uses machine learning to get as many conversions as possible at or below your set CPA.

Google then takes your Target CPA to set bids based on the likelihood of conversion from that particular user.

While some conversions may cost more than your Target CPA, others may cost less than your target, but overall, the Google Ads system tries to keep your cost per conversion at the level you set.

There are multiple use cases for choosing Target CPA bidding:

• Historical conversion data is available. This bid strategy requires historical conversion data, so if you have ample campaign or account conversion data, this could be a good strategy for you.
• You need better budget control. It’s also good if you need to retain control over your CPA in order to manage the overall ROI of your PPC program.
• Conversion tracking is accurately set up. As long as there are no underlying issues with your conversion tracking, this bid strategy could be reliable for your campaigns.

For example, say you run an online boutique clothing website and know that acquiring a new customer at $50 will still be profitable. For your campaign, you choose the Target CPA bid strategy and set the limit to $50.

As you’re running your campaigns, the data shows you’ve consistently been acquiring new customers at $40. Because of this, the Google Ads system knows it can optimize bids further to get you more customers while still staying within that $50 limit.

Now, there are some limitations to Target CPA bidding to be aware of:

• Limited budgets could reduce visibility. If you’ve set a competitive Target CPA, Google may limit your ad exposure or participation in the auction and reserve your budget for more expensive or competitive auctions. Essentially, you may see impressions and clicks decline as the system “conserves” budget expenditure for the most likely-to-purchase candidates.
• Misalignment of daily budget and Target CPA can reduce results. Say you have a daily budget of $50 for your campaign, but your Target CPA is set at $25. Your impressions may be vastly reduced because, in this scenario, you’d need to have a stellar conversion rate for the number of clicks you get in order to stay within that $25 CPA.

Target Return On Ad Spend (ROAS) Bidding

Target ROAS aims to achieve a specific return on ad spend. You set the desired ROAS, and Google Ads optimizes bids to maximize conversion value while hitting your target.

Similar to Target CPA, Google then takes your ROAS inputs to set bids based on the likelihood of a conversion from that particular user.

Some good use cases for using Target ROAS bidding for campaigns include:

• Your goals are revenue-driven. Target ROAS is great for ecommerce businesses where goals are revenue-based.
• You have high-value transactions. This PPC bidding strategy can be especially effective for high-revenue transactions or a high volume of conversions.
• Proper conversion tracking is set up. Similar to Target CPA bidding, this strategy requires accurate conversion tracking. As long as tracking is accurate and validated, this can be a good choice for your campaigns.

The Target ROAS bid strategy is a great choice when you need to balance the cost of your PPC campaigns versus the revenue coming in.

Ultimately, it helps generate more revenue for every dollar spent.

For example, you have an online store that sells running shoes. Your average order value is $150, and you aim to have a 300% ROAS.

That means for every $1 you spend, you get back $3 in revenue. By setting a Target ROAS, Google optimizes campaign bids to focus on the specific conversions that will likely meet or exceed that 300% ROAS goal.

As your campaigns gain more historical sales data, you’ll notice that more of your dollars are going to those higher revenue-generating sales because of the goal setting.

With Target ROAS settings, remember that if you have an overall goal of 300% ROAS, that doesn’t mean every campaign you set should have that 300% goal.

When it comes to search campaigns, brand terms and non-brand terms are not created equal. Brand terms will likely have the highest ROAS because someone is actively searching for your brand, signaling a higher likelihood of purchase.

Non-brand terms, on the other hand, will be more competitive and costly, and likely won’t have the same ROAS as brand terms. So, be sure to set your ROAS goals at the campaign level accordingly.

Maximize Conversions Bidding

Maximize Conversions automatically sets bids to help you get the most conversions within your budget. 

This strategy aims at spending your entire campaign budget without having any ROAS or CPA limitations.

Maximize Conversions can be an ideal bid strategy if:

• You have more budget flexibility. As mentioned above, this strategy is not constrained by CPA or ROAS targets. If you’re looking to drive as many conversions as possible and have the budget to do so, this strategy is right for you.
• You’re looking for quick wins. If you just launched a new product and conversion expectations are high, this is an ideal strategy.
• A broader audience is targeted. This strategy can be effective with a broader audience because there’s more of a likelihood for your ads to show as the system learns what a valuable customer looks like.

For example, your company just launched a new fitness app and needs to acquire users quickly.

By having a flexible budget, Maximize Conversions is chosen to drive as many downloads and signups as possible. Google will automatically adjust those bids to find the users most likely to convert.

This bid strategy is not for the faint of heart, especially for advertisers who have limited budgets or need to stay within certain performance constraints.

Maximize Conversion Value Bidding

Similar to Maximize Conversions, the Maximize Conversion Value strategy sets bids to help you get the most conversion value within your budget.

This strategy aims to optimize for conversion value while spending your entire campaign budget without having any ROAS or CPA limitations.

Maximize Conversions can be an ideal bid strategy if:

• Conversion value is prioritized over volume. This bid strategy is suitable when the goal is to prioritize high-value conversions instead of the volume of conversions.
• Campaigns are revenue-focused. Maximize Conversion Value is great when maximizing revenue is important.
• Your products have multiple price points. This is an effective bid strategy when you have different products that vary in price. The system will learn to focus on the high-value transactions from users.

For example, you run an online wedding invitations company with higher price points. Your site also sells accessories that cost much less than the invitations.

Using the Maximize Conversion Value bidding strategy helps focus on those high-value transactions, like wedding invitations, to boost your revenue while spending your campaign budget.

As with each bidding strategy, there are some limitations to using the Maximize Conversions (and Value) strategies:

• Performance is dependent on campaign budget. If the campaign budget is set too low, it will be difficult for Google Ads to effectively learn and optimize towards high-value conversions.
• Less control over specific types of conversions. If you’re measuring multiple conversion types that have values associated, this strategy doesn’t allow you to target the specific conversion types. Its aim is to look at the overall conversion value.
• This could lead to inefficiencies in performance metrics. While you may see an increase in revenue, you could also yield higher Cost per Acquisition, especially during more competitive markets.

At the end of the day, it’s up to you to decide if you have enough budget flexibility to utilize Maximize Conversions (or Value) or need to stay within certain ROAS or CPA constraints.

Read more: How To Get The Most Out Of Max Conversion Value And tROAS Bidding

Maximize Clicks Bidding

The Maximize Clicks bid strategy aims to get as many clicks as possible within your budget.

What’s nice about this strategy is that you can add “ceiling” bid limits for Google to not go over within the auction process.

Maximize Clicks is ideal for your campaigns if:

• You’re looking to increase website traffic. If you’re less focused on conversion and looking to get as much traffic as possible, this strategy is for you.
• You’re running Top-of-Funnel (TOF) or Middle-of-Funnel (MOF) campaigns. Similar to the above, if your campaign goal is more about awareness generation and buyer consideration, Maximize Clicks is a great place to start.
• You’re setting up new campaigns with no history. Because many of the conversion-based bid strategies require historical data, setting campaigns to Maximize Clicks with a suitable maximum CPC limit can really help your campaigns take off quickly.

For example, you started a recipe blog website and just published a new guide on healthy swaps in your kitchen. Your primary goal is to drive as much traffic to that page as possible within your given budget.

Using the Maximize Clicks bid strategy will then aim to get you as many clicks to your site within that budget for the keywords you’re bidding on. Just remember to set a maximum CPC if you’re in a competitive industry!

Target Impression Share Bidding

This next PPC bidding strategy focuses mainly on the visibility of your campaigns, whereas the others focus on conversion or click-based outcomes.

Target Impression Share automatically sets bids to help ensure your ads achieve a specific impression share on the search results page. 

You can choose your goal to show your ads:

• At the absolute top of the page.
• On the top of the page.
• Anywhere on the page of the search results.

Using the Target Impression Share strategy can help boost your campaigns if:

• Brand awareness is top of mind. If the campaign’s main goal is maintaining a solid presence on Google or increasing visibility for your brand, this strategy is for you.
• You’re in a highly competitive market. In markets where competition is high and visibility to your brand is crucial.
• You’re running top-of-funnel keywords. Similar to brand awareness, you may be targeting keywords that aren’t conversion-focused and want your brand to be top of mind when users first start their purchase journey.

For example, you just launched a new fashion brand and want to ensure your ads are visible in a highly competitive space.

Your goal is to appear at the top of the Google search results page for keywords like “summer fashion trends” or “stylish summer outfits for women.” By choosing Target Impression Share, you can choose how often you’re willing to appear at the top of the page for the keywords you’re bidding on.

Keep in mind that by using this bid strategy, you may see higher-than-average CPCs. That’s because you’re paying extra for that coveted top space on the search results page.

Another example is setting your brand campaign on Target Impression Share to ensure your core brand terms are always covered.

Results have been mixed in my experience, as sometimes I’ll just see inflated CPCs on terms where I would’ve seen lower CPCs utilizing Maximize Conversions or Maximize Clicks.

What About Manual Bidding?

Manual CPC bidding is still around – for now.

Google has not indicated that it is removing this option, but we can never guarantee that it will always be there.

As the name says, Manual CPC bidding means you set the maximum CPCs you’re willing to pay. They can be set at the campaign, ad group, or keyword level.

The reason many have transformed their PPC bidding strategies to more AI-powered strategies from Google is that human real-time bidding simply can’t keep up with machine learning.

There are still use cases for brands who need to use Manual CPC and continue to use it to this day. Especially for brands that don’t have conversion data or are running small accounts, some just opt into this model for managing their Google Ads campaigns.

Read more: Do Manual Adjustments Still Make Sense With Automated Bidding?

Choose The Right Strategy For Your Specific Goals

So, there you have it – a breakdown of Google Ads’ AI-powered bid strategies and when to use them.

Remember, the key to PPC success is not just picking any strategy but choosing the right one for your specific goals and campaign needs.

Google’s machine learning outputs are usually the direct result of the inputs from the advertisers, so choose accordingly. And remember, they can be changed over time! Just make sure that your changes align with the overall business goals.

By understanding these strategies, you can make smarter decisions and get the most out of your PPC budget. Happy optimizing!

More resources: 

Featured Image: BestForBest/Shutterstock

The 8 Best PPC Ad Networks via @sejournal, @LisaRocksSEM

Choosing the right pay-per-click (PPC) ad network is a core strategy impacting the success of your advertising campaigns.

Each network offers unique features, reaches distinct audiences, and shines in different areas, making it crucial to understand their strengths and demographics to select the one that best aligns with your marketing goals.

In this article, we’ll look at eight of the best PPC ad networks available today, exploring what each offers when it comes to the following areas:

• Reach.
• Audience demographics.
• Ad formats.
• Unique features.
• Advertiser best fit.

Note: While we refer to the following as “PPC” ad networks, each offers multiple pricing options for pay-per-click, impressions, video views, or conversions. We are exploring popular paid media ads.

1. Google Ads 

Google Ads is the most popular ad network due to the immense reach of ads and its broad range of users. As the world’s leading search engine, Google offers incredible opportunities for advertisers.

It uses search and the power of the websites on the Google Display Network (GDN), which consists of more than 2 million websites, videos, and apps on which display ads can appear.

Audience targeting on the display network includes remarketing, in-market audiences, customer match, and more.

Both search and display campaigns allow demographic targeting in age, gender, parental status, and household income.

Adding in demographic targeting narrows the available reach for ads, but makes the targeting more relevant.

• Reach: Largest PPC network with billions of daily searches and extensive reach through Google Search, YouTube, and the Google Display Network.
• Demographics: Broad and diverse, all age groups, genders, and interests globally.
• Ad Formats: Text ads, display ads, video ads, shopping ads, and app promotion ads.
• Unique Features: Extensive reach through Google Search, YouTube, and Google Display Network, robust targeting and analytics, AI integration and optimizations.
• Advertiser best fit: Best for reaching a broad audience with high-quality traffic, comprehensive keyword options, and detailed performance insights.

Screenshot from search for [top headphones for music], Google, May 2024

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2. Microsoft Ads

Bing comes in as the second-largest search engine worldwide, behind Google. Despite being second place, it has an impressive 659 billion monthly PC searches on the Bing search engine.

The Microsoft Audience Network serves display and native ads. You’ll find remarketing, in-market, customer match, similar audiences, LinkedIn audiences, and more opportunities in the Microsoft Audience Network.

Microsoft has the advantage of exclusively serving Yahoo search traffic, powering several digital assistant voice searches (like Alexa), Microsoft products, and the ability to target searchers with LinkedIn profile data such as company, job function, and industry.

Microsoft Ads offers advertisers campaign import capabilities from Google Ads, simplifying the process of getting started and keeping consistencies between platforms.

• Reach: Significant volume through Bing, Yahoo, AOL, and DuckDuckGo search engines, reaching billions of users.
• Demographics: Slightly older demographic, 35+ age group; higher household income; professional and business users.
• Ad Formats: Text ads, image ads, shopping ads, video, audience ads.
• Unique Features: Integration with Bing, Yahoo, and AOL, competitive cost-per-click rates, LinkedIn profile targeting.
• Advertiser best fit: Suitable for reaching a slightly older, higher-income demographic. Skews slightly more business due to integrations with Microsoft products and high desktop usage.

Screenshot from search for [photo editing software], Microsoft Bing, May 2024

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3. Meta Ads

Meta Ads allow businesses to reach a highly targeted audience on both Facebook and Instagram, utilizing extensive user data for precise targeting.

User targeting can be very granular with demographics, interests, behaviors, and more. Facebook supports retargeting through user activity on Facebook and actions offsite through advertisers’ Facebook pixel data and upload of customer lists.

• Volume: Over 3 billion monthly active users on Facebook alone, with even more across Instagram, WhatsApp, and Messenger. The Meta Audience Network provides massive ad volume and targeting capabilities.
• Demographics: Wide age range, strong presence with 18-49 year-olds. Diverse interests among users with engagement across genders.
• Ad Formats: Image ads, video ads, carousel ads, slideshow ads, collection ads, and Stories ads.
• Unique Features: Highly targeted ads based on detailed user data. Advanced demographic and interest targeting. Integration with Instagram, diverse ad formats with strong performance tracking.
• Advertiser best fit: Ideal for social media engagement, detailed demographic, and interest targeting, and strong performance tracking. Better for upper funnel branding and awareness.

Screenshot from Facebook Reels, May 2024

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4. LinkedIn Ads

LinkedIn, owned by Microsoft, is the top platform for B2B advertising.

It offers a wealth of advertising opportunities for businesses looking to target professionals and career-minded social platform users.

LinkedIn Ads are ideal for B2B marketing. They enable audience targeting based on job title, industry, seniority, and company size, as well as remarketing and user behavioral targeting.

More than 1 billion professionals are on LinkedIn, and they can all be targeted by professional criteria.

• Volume: Over 1 billion professionals.
• Demographics: Professionals, business decision-makers, and B2B marketers predominantly aged 25-54; higher education levels and income.
• Ad Formats: Sponsored content, sponsored InMail, text ads, dynamic ads.
• Unique Features: Professional targeting unlike any other platform.
• Advertiser best fit: Highly effective for B2B lead generation and reaching business professionals and decision-makers. CPCs can be high, from $4 to $20 per click, but lead gen is very effective.

Screenshot from LinkedIn, May 2024

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5. TikTok Ads

TikTok has quickly become one of the most influential social media platforms, especially among younger audiences. This vibrant, short-form video app has changed content consumption and also opened new avenues for digital advertising.

With its unique blend of creativity, entertainment, and virality, TikTok offers advertisers a dynamic paid ads platform to connect with a highly engaged audience.

• Volume: Over 1 billion monthly active users.
• Demographics: Mostly younger users, with a strong presence among 13-24-year-olds and a highly engaged and diverse user base.
• Ad Formats: In-Feed ads, TopView ads, Branded Hashtag Challenges, Branded Effects.
• Unique Features: Engages younger audiences with short-form video content and innovative ad formats.
• Advertiser best fit: Best for targeting Gen Z and Millennials, leveraging viral content trends and high user engagement. Innovative and trendy brands can connect with a highly engaged and youthful audience at scale.

Screenshot from TikTok, May 2024

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6. Amazon Advertising

Amazon Advertising is a powerful PPC ad platform for retailers that leverages the extensive reach of Amazon’s ecommerce ecosystem. It targets shoppers at the point of purchase, making it highly effective for driving direct sales and brand visibility.

Millions of daily transactions on the site offer massive ad volume and detailed targeting options to capture high-intent buyers.

• Volume: Millions of daily transactions on its e-commerce platform, offering substantial ad volume at the point of purchase.
• Demographics: Predominantly adults aged 25-54, higher income, strong presence among parents and frequent online shoppers.
• Ad Formats: Sponsored products, sponsored brands, sponsored display, and video ads.
• Unique Features: Target shoppers at the point of purchase, access to Amazon’s e-commerce platform.
• Advertiser best fit: Perfect for ecommerce and retail businesses aiming to capture consumers ready to buy, detailed product and keyword targeting.

Screenshot from Amazon, May 2024

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7. X Ads (formerly Twitter Ads)

X Ads offers several options to reach users through its social platform of 330 million active users each month.

Advertisers setting up these ads will find objective-based campaigns for awareness, consideration, and conversion served on X platforms (desktop and mobile app).

Promoted ads are probably one of the most flexible ad formats because they can include images, videos, carousels, and text with options to include other ad features like clickable functionality to an app download or website right in the ad creative.

• Volume: 372.9 million monthly active users.
• Demographics: Broad age range, strong presence among 18-49 year-olds, diverse interests, highly engaged in news, sports, and entertainment.
• Ad Formats: Text Ads, Image Ads, Image Ads with Website Buttons, Video Ads, Video Ads with Website Buttons, Carousel Ads, Moment Ads.
• Unique Features: Real-time engagement, promoted tweets, accounts, and trends on the platform.
• Advertiser best fit: Optimal for promoting timely content and events, engaging a broad audience in real-time conversations.

Screenshot from X (Twitter), May 2024

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Pinterest Ads

Savvy social media users find creative and shopping inspiration on Pinterest. In fact, it has 518 million active monthly users who are researching trends, ideas, and products, and many of them are looking to purchase.

The users skew predominantly women at 70% of Pinterest’s user base.

• Volume: Over 518 million monthly active users.
• Demographics: Rapidly growing Gen Z audience (13-24), predominantly female (around 70%), strong presence overall among 18-49 year-olds with interests in DIY, home decor, fashion, and recipes.
• Ad Formats: Image, video, carousel, shopping Pins, showcase, quiz, collections.
• Unique Features: Visual discovery platform, promoted Pins, and strong shopping integration.
• Advertiser best fit: Effective for targeting a predominantly younger, trendy female audience interested in health and beauty, DIY, home decor, fashion, and recipes.

Screenshot from Pinterest, May 2024

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Choosing The Best Ad Platforms For Your Business

Selecting the right PPC ad network can make or break your digital marketing efforts.

Each of these PPC ad networks we’ve explored in this article offers unique audiences, ad features, and great opportunities to engage with your audience. But you need to understand where your audience is, what they talk about, and who they follow to prioritize your advertising.

The right choice for you will depend on your business type, target audience, and marketing goals – so keep those top of mind as you review the strengths and capabilities of each network.

And once you select your network, remember to keep optimizing your ads based on performance insights. Good luck!

More resources:

Featured Image: Sutthiphong Chandaeng/Shutterstock

Unlocking The Secrets Of Google Ad Auctions via @sejournal, @siliconvallaeys

In the world of search marketing, ad auction dynamics play a crucial role in determining ad placements and costs.

Since the DOJ trial against Google, a few elements of the ad auction have gained visibility in the advertising community.

Due to the nature of the trial, the nuances of the auction have been portrayed as serving primarily to increase ad costs. But while higher cost per click (CPCs) are rightfully viewed with skepticism, consider that they may be a side effect of something advertisers would actually want.

I believe nobody should care about CPC.

Instead, the focus should be on cost per action (CPA), return on ad spend (ROAS), return on investment (ROI), or another metric more closely related to business outcomes than CPC.

If you disagree with that premise, you will disagree with the rest of my post. But if you are willing to consider that a higher CPC is not always a bad thing, read on to learn how to explain it to a boss or client who is always on your case about CPCs being too high.

We’ll explore key components of ad auctions, including ad rank thresholds and reserve prices, out-of-order promotions, Randomized Generalized Second-Price (RGSP) mechanisms, and pCTR normalizers to understand how these elements work to create a more effective advertising ecosystem.

But first, let’s cover some of the basics of the ad auction.

The Importance Of Ad Rank

Ad Rank is a fundamental component of ad auctions, balancing bid amounts with ad quality to determine ad placement on the search results page. The basic formula is:

Ad Rank = Max CPC × predicted CTR

This formula ensures that both bid amount and ad quality are considered when determining ad placement.

Predicted CTR (pCTR) is an estimate of how likely it is that an ad will be clicked when shown for a particular search query. This metric is critical because it reflects the ad’s relevance and expected performance.

pCTR Impacts Actual CPC

The actual cost-per-click (CPC) that advertisers pay in an ad auction is influenced by the projected click-through rate (pCTR) of their ads.

Essentially, ads with higher pCTR can achieve better ad positions at a lower actual CPC compared to ads with lower pCTR.

This encourages advertisers to create highly relevant and engaging ads that align with user intent, as improving pCTR can lead to more efficient spending and better ad placements.

Google Ranks Ads Based On CPM

You read that right, and I haven’t gone mad. Since we’re exploring the dynamics of ad auctions and how they influence costs, a helpful point for advertisers to understand is that Google’s ad auction is not a CPC auction but rather a cost-per-thousand-impressions (CPM) auction.

Its not being a CPC auction should be obvious. After all, the pCTR is an equally important factor, and the ad with the highest MaxCPC doesn’t automatically win.

Advertisers bid a maximum CPC (or set a tROAS or tCPA, which gets turned into a MaxCPC at the time of each auction), and when that is combined with pCTR, you get an estimated CPM (eCPM).

The ad with the highest eCPM wins the auction. Since the ad with the highest ad rank wins the auction, we can see that ad rank and eCPM are interchangeable.

And by the way, any publisher can tell you that the best way to monetize a finite number of web visits is by maximizing the CPM, so it should make sense that Google wants to sell ads to the advertisers with the highest CPMs. I explain this in a video.

The Role Of pCTR In Ad Auctions

pCTR is a dynamic metric that influences ad placement and cost. It is calculated for each auction based on the specific context of the search query.

Advertisers with high pCTR benefit from lower CPCs and better ad positions, as the system rewards ads that are more relevant and provide a better user experience.

Understanding and optimizing relevance is crucial for advertisers. High-quality ads that resonate with users are more likely to achieve higher pCTR, reducing overall costs and improving campaign effectiveness.

This dynamic nature of pCTR ensures that advertisers continuously strive to improve ad quality, benefiting both users and advertisers.

Quality Score Is Not pCTR

Quality Score (QS) and projected click-through rate (pCTR) are both critical components for advertisers, but they are not the same.

QS is a 1-10 integer representing the quality and relevance of an ad, taking into account factors such as ad relevance, landing page experience, and historical performance. It is a key performance indicator to help advertisers navigate their way to more relevant ads.

On the other hand, pCTR is a dynamic metric that estimates the likelihood of an ad being clicked for a specific search query.

It varies with each auction and reflects the ad’s expected performance in real time. While QS provides a broad assessment of ad quality, pCTR focuses specifically on predicting user engagement for individual auctions.

Now that I’ve covered the foundation of the ad auction, let’s explore the nuanced aspects that surfaced during the trial.

Thresholds And Reserve Prices

What Are Thresholds And Reserve Prices?

The ad auction is not as simple as ranking ads and then showing them from highest to lowest rank. There are thresholds that determine a number of things, including an ad’s eligibility for a more prominent location on the page and the reserve price for it to be shown at all.

These thresholds vary based on factors such as ad quality, position, user signals, and the specific topic of the search.

Google believes ads are information, too, and should help answer questions. So, there is a quality threshold an ad must meet before it can be shown above organic results.

This is why many searches have fewer than 4 ads above the search results. According to Google’s internal data, as of 2020, fewer than 2% of all searches on Google had 4 or more ads, regardless of position on the page.

How Thresholds And Reserve Prices Impact Costs

To explain this, we need to introduce the notion of an ad’s long-term value (LTV), a measure of the economic benefit of showing the ad minus the expected cost of showing it.

The economic benefit is the ad rank, or pCTR X Max CPC, i.e. how much Google predicts they will earn from showing the ad.

The cost of showing the ad is a prediction of the possibility that the ad will harm user experience and cause them to start avoiding future ads or suffer ad blindness.

The predicted negative impact is the threshold, or reserve price, for an ad. Only if its economic benefit exceeds the expected cost can the ad be shown. So if LTV > 0, the ad may show.

This means that ads may need to pay more than $0.01 (or the equivalent lowest currency in other markets) in order to appear, and that raises prices.

How Do Thresholds And Reserve Prices Benefit Advertisers?

If all second-price auction prices were determined by the next competitor, many advertisers would fall below the LTV > 0 thresholds even though they have a maxCPC that could get them above the threshold.

Google honors the advertiser’s wish to show their ad by collecting the CPC necessary to offset the predicted negative value of showing the ad.

You can think of the threshold as a hidden participant in the ad auction whose ad is tied to the position of the threshold. Beating this threshold raises the effective CPC an advertiser pays, but it also enables the advertiser to get their ads to show in scenarios where they otherwise may not have shown while paying no more than their maximum bid.

For example, in a scenario where your ad is the sole eligible contender, you may be required to pay the reserve price, which is influenced by the thresholds.

In a scenario without strong competition, a very good ad with high quality and a high MaxCPC could find itself unable to meet the threshold. To ensure the advertiser gets what they want, Google bumps their effective CPC so that they meet the threshold and their ad can be shown (LTV > 0).

Out-Of-Order Ad Promotion

Now that we understand reserve prices and thresholds, let’s look at a particular example that involves the threshold for ads to be shown at the top of the page.

What Is Out-Of-Order Ad Promotion?

Out of order ad promotion is when an ad with a lower Ad Rank is allowed to be promoted above an ad with higher Ad Rank.

Let’s dive into this.

The thresholds have a relevance component; for example, Google may say that an ad can only be promoted to the top of the page if it has at least a certain level of relevance (pCTR).

Because Ad Rank is made up of MaxCPC and pCTR, it is possible that a lower-ranked ad (Ad B) could have a better pCTR but be stuck at the bottom of the page behind a higher-ranked ad (Ad A) with a lower pCTR.

If the pCTR promotion threshold was 5%, and Ad Rank was honored, neither of these ads could appear at the top of the page even though ad B has a high enough quality. It would be forced to stay behind Ad A in order to honor Ad Rank.

In out-of-order promotion, ad B is allowed to jump over ad A.

How Out-Of-Order Ad Promotion Impacts Costs

When advertiser A’s low quality doesn’t meet the promotion threshold but advertiser B does meet it, rather than pushing both advertisers to the bottom of the page, advertiser B is allowed to be promoted out of order above advertiser A.

Now, advertiser B pays the CPC needed to beat the top of page threshold (reserve price) which is more than if they were left at the bottom of the page. It can also be more than if they had to beat the Ad Rank of Ad A.

How Out-Of-Order Ad Promotion Benefits Advertisers

Out-of-order ad promotion, where ads are promoted based on factors beyond just the bid amount, benefits advertisers. This approach considers various thresholds, including ad relevance, ensuring that high-quality ads have a chance to appear in top positions even if their Ad Ranks are not the highest.

This can help smaller advertisers with highly relevant ads compete effectively against larger competitors with bigger budgets.

By promoting ads based on relevance and quality, advertisers are incentivized to create more engaging and useful ads, ultimately leading to better user experiences and higher conversion rates.

Randomized Generalized Second-Price (RGSP)

What Is RGSP?

In a traditional second-price auction, the highest bidder wins the ad spot at the price of the second-highest bid.

But remember that the second price depends on pCTR, a number predicted with machine learning. Predictions are not precise, and it can happen that multiple advertisers are competing very closely, and the only thing that sets them apart is an ML-generated pCTR.

To ensure that inaccurate predictions don’t become self-reinforcing truths, ads can be randomly re-ordered. This introduces chances for experimentation that the ML algorithm can use to evaluate its accuracy and improve future predictions.

RGSP is a system to help ensure normalization is handled correctly. It’s hard to have data to do normalization if ads don’t vary. You need to see the same ad’s performance when it wins and loses to be able to identify how much of its performance is due to its inherent quality vs external factors like where it showed.

How RGSP Impacts Costs

RGSP introduces an element of unpredictability, which encourages advertisers to bid their true value rather than strategically underbidding.

When ads are re-ordered and don’t follow the pure ad ranking mechanism, CPCs will be different, and that can raise prices for some advertisers.

How RGSP Helps Advertisers

This mechanism helps prevent ads with high predicted relevance from consistently hogging top positions, promoting a diverse range of ads. By fostering a competitive environment, RGSP mechanisms encourage advertisers to focus on ad quality and relevance, which can lead to better performance and higher return on investment (ROI).

It prevents ads with incorrectly predicted high pCTRs from unfairly remaining in top positions and beating newer ads with inaccurate low pCTRs.

Normalization Techniques

What Are Normalization Techniques?

Google’s normalization techniques ensure that ad rankings reflect relevance rather than being influenced by external factors like ad format or position.

By incorporating metrics such as projected click-through rate (pCTR) and adjusting for factors like ad format, the system creates a level playing field for all advertisers.

Ad rank is partially based on pCTR. But we know that CTR depends on a lot more than just the text of the ad itself. For example, all else being equal, ads in higher positions will get a higher CTR than those in lower positions. Ads with more visible lines of ad text will get higher CTRs than those with fewer lines of text.

Project Momiji works to normalize pCTRs so that a more appealing ad format doesn’t unfairly penalize advertisers whose ads didn’t get the same visual treatment.

How Normalization Techniques Impact Costs

When pCTR is normalized for ad formats and page position, some advertisers with high pCTRs will see a downward adjustment. This is to say that the high pCTR was driven in part by the inherent benefit of a more appealing ad format or a higher page position.

Advertisers should compete on a level playing field, so when this normalization happens, some advertisers will pay more than if the normalization hadn’t happened.

For example, an ad shown in position 1 with a pCTR of 10% may only have had a pCTR of 8% if it had been shown in position 2. There’s an underlying ad relevance pCTR that can be estimated by removing all factors that boost the pCTR due to factors out of the advertiser’s control, like ad formats, position on the page, number of additional ads, etc.

Google can then price all ads based on their normalized pCTR. So, in our example, if the pCTR for the auction is 10% but normalized for all factors, it would only be 8%, then the advertiser’s effective CPC will be higher.

How Normalization Techniques Help Advertisers

Normalization techniques prevent unfair advantages stemming from superior positions or ad treatments, ensuring that ad pricing reflects true relevance. This approach benefits advertisers by promoting fair competition and encouraging investment in high-quality ads that align with user intent.

Focus Less On CPC

Understanding the intricacies of ad auction dynamics is crucial for advertisers seeking to optimize their campaigns and achieve better outcomes.

While higher CPCs might initially appear disadvantageous, they often result from mechanisms designed to promote ad quality, relevance, and a better user experience.

By focusing on metrics that truly matter, such as CPA, ROAS, and ROI, advertisers can better appreciate the benefits of these dynamics.

The components of the ad auction, from ad rank thresholds to out-of-order promotions and RGSP mechanisms, work together to create a competitive yet fair environment.

This encourages advertisers to continuously improve their ads, ultimately benefiting both their business and the users they aim to reach. By embracing these complexities and striving for high-quality, relevant ads, advertisers can navigate the ad auction landscape more effectively and achieve greater success in their digital marketing efforts.

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Featured Image: ImageFlow/Shutterstock

How To Make Sure Google’s Automation Settings Aren’t Working Against You via @sejournal, @MenachemAni

Automation can be powerful, but it can cause performance and output issues without human supervision. Google Ads is no exception.

Despite the truly compelling advances Google has made in machine learning and automation over the past five years, it’s important not to lose sight of the reality behind that technology.

In this article, I’ll walk you through the importance of being the ultimate decision-maker for your account, as well as some of my must-track settings in Google Ads that help you exert more control over campaign performance.

Why Automation Requires Human Supervision

Google’s goal with its ad product is to get advertisers and brands to spend more. There’s nothing wrong with this – every business exists to generate profit and grow shareholder value.

But a side effect of this is that it’s not always evident how to exercise control over that automation in Google Ads.

Whether this is by design or oversight, it means that ad managers (especially new ones) will put too much trust and control in the hands of machines that don’t have context on the nuances and needs of individual businesses.

Google continues to make improvements to its automation, but at no point will it be able to make such a large-scale model work just right for every business.

This is where account managers come in.

As our jobs morph from optimizing campaigns to optimizing the machines that run campaigns, we find ourselves focusing on new ways of controlling performance – through data inputs, decision-making, and automation of our own.

9 Automation Settings In Google Ads That Deserve Your Attention

Whether you’re starting a new campaign or diagnosing an ongoing one, these nine settings are worth your attention and effort.

This list is not exhaustive; there are far more than nine things you can control.

These are the ones I focus on before others because they have a stronger-than-usual tendency to negatively impact the campaign or account.

1. Location Settings

With location targeting, the default setting is “All countries and territories.” Make sure to only target the specific locations that make sense for your business.

Screenshot from Google Ads, May 2024

We typically recommend only targeting “Presence,” not “Presence or interest.”

If you only want to show your ads for home repairs in New York or London, selecting “Presence or interest” will show them to people who might have been searching for things to do before visiting those cities, but who live in Miami or Manchester.

Screenshot from Google Ads, May 2024

This is especially vital for localized campaigns and slightly less critical (but still important) if you’re targeting an entire country such as the United States.

Advertisers who actively want to target people with interest in a location (like hotels or bed and breakfasts) should feel free to enable that setting.

2. Campaign Creation Settings

It’s important that you know what you want to do in Google Ads before you create a campaign because Google will nudge you toward its automation nearly every time.

For example, if you’re looking to launch a Shopping campaign, the system will push you to create a Performance Max campaign instead.

If you don’t know the difference, you could spend considerably more money on a lower-quality campaign.

Screenshot from Google Ads, May 2024

Screenshot from Google Ads, May 2024

Ordinarily, this wouldn’t be a problem, but for advertisers who don’t know all the safeguards that need to be built to make Performance Max work, this could cost them far more than they’re willing to spend on ads – or can afford in the first place.

3. Display Network

If you’re running a Search campaign, Google will allow you to choose (to some degree) where your ads are shown.

The Search Network is enabled by default. This is the standard text-based ad you see in search results, but there are two settings you’ll likely want to keep an eye on.

Screenshot from Google Ads, May 2024

• Leaving the “Include Google search partners” setting selected will allow your ad to be shown on third-party partner websites with Adsense enabled, as well as YouTube and other Google properties outside of the search results. Unless you know how to monitor the quality of these placements, it’s best to opt out.
• You also probably want to opt out of Display Network placements. These are the image ads that you see as you browse YouTube videos, third-party websites, and apps. Again, these can bring in a disproportionately high amount of low-quality traffic.

4. Auto-Apply Recommendations

Auto-apply recommendations (AAR) are a source of stress for many modern Google Ads marketers, largely because outsourced Google reps push for their enablement and go around account managers to make that happen.

As with everything else in Google Ads, there is balance beneath the surface.

Screenshot from Google Ads, May 2024

Many of these are too general, even for my liking, while others actually make an impact. As a rule of thumb, I like to disable any AARs that can change any of the following:

• Budget, i.e., how much the account is spending.
• Bids, i.e., how much we’re willing to pay per click, conversion, or other action.
• Targeting, i.e., deciding who sees the ads via keywords, audiences, etc.

In other words, most settings will be turned off. In some cases, we’ll leave the following ones enabled:

• Upgrade to data-driven attribution.
• Optimized ad rotation.
• Remove non-serving keywords.
• Add audience reporting.

5. Smart Bidding And Conversion Tracking

Smart Bidding can be a very powerful tool, but it relies on two things: historical data and conversion tracking.

Newer accounts tend to be short when it comes to both of these, but conversion tracking is something you can at least control from day one.

We still regularly see and hear about accounts that are months or even years old with non-existent or poor conversion tracking setups. This is a direct result of subpar account management.

One common culprit is setting conversion actions that have no identifiable business value, such as page views.

This is usually done to make a questionable PPC professional look good by inflating conversion count and value – but it costs a great deal of money with little return. It also has the added effect of making your historical conversion data almost worthless.

Genuine errors can also cause problems. We had a client who made a change to their website, and Google started double-counting ecommerce transactions.

Smart Bidding incorrectly thought the campaign was performing twice as well as it actually was, which led the system to spend more of the budget. If we hadn’t caught it quickly, it would have wasted a lot of money.

The inverse is true as well. If you aren’t tracking all conversions, the system will think it’s not hitting targets and spend less, causing you to lose out on potential revenue.

I will always push for conversion tracking to be part of any Google Ads account.

But if you don’t have it set up for whatever reason, avoid automated and Smart Bidding strategies like Maximize Conversions and Maximize Conversion Value. Stick to manual bidding instead.

6. Gemini AI And Auto-Fill Ad Text

I’ve been using Google’s generative AI model Gemini (formerly Bard) on and off for a few months. This is a new technology with challenges of its own, so questionable output is still common.

Because it relies on your website as the primary data input, you really have to have your messaging there dialed in to get any meaningful copy out of Gemini.

But even with a great website, you’ll still get subpar copy options.

Gemini is good at taking input and giving you a variety of ideas, which you can then fine-tune with feedback and additional prompting.

So, while you can’t use its output as is, Gemini is a solid ideation tool – especially for small business owners with limited resources.

7. Keyword Match Types

Keywords are (for now) the heart and soul of Google Ads, but their match types determine how they will behave when it comes time to show your ads.

In my experience, phrase and exact match are your best options when using manual bidding.

You can still use broad match, but limit it to a handful of highly relevant terms. This is because broads operate with far more freedom when interpreting intent.

When you pair that with Smart Bidding, it allows Google to determine which people searching for what you have are closest to converting.

But when adding new keywords to Search, the system will always add them in as broad match unless otherwise specified. Be careful with this, and remember to format your keywords appropriately.

Similarly, adding negative keywords to a campaign will default to negative exact match.

We much prefer to pare it down to the root theme and block using phrase match negatives for both Search and Shopping.

8. New Customer Acquisition

With the New Customer Acquisition setting in Search and Performance Max campaigns, you have the option to tell Google to only go after people who haven’t done business with you in the past.

It’s as straightforward as uploading a customer list and keeping it fresh, but the targeting is not perfect. Causes include expired tracking cookies, delays in updating customer lists, and general errors that are part of all automation.

But even though the system will still go after some existing customers, it should still largely work the way it’s meant to.

Remember that turning this option on will count the increased value of a new customer as revenue. This affects reporting and Smart Bidding’s choices, so it’s generally a good idea to build a separate campaign specifically for New Customer Acquisition.

9. Retargeting & Enhanced Audiences

If you create a dedicated retargeting campaign that only targets people who have visited your website, Google will automatically enable “Enhanced Audiences.”

This allows the system to go beyond your defined audience, in a manner similar to how audience signals work in Performance Max.

Don’t Blame Google If You Don’t Want to Adapt

Nothing in Google Ads is all good or all bad – a philosophy that I extend to all advertising and business in general.

These machine-driven automation capabilities can deliver great results when used appropriately, but they have their drawbacks. Something that is built for all advertisers can never work the way you want it to out of the box.

The truth is that we’re all fending for ourselves. Anyone managing Google Ads campaigns is answerable to their accounts, clients, brands, businesses, and bosses.

It’s a tough journey, but one that we’re on together, like it or not. If you aren’t ready to put in the effort to adapt, you can’t blame anyone but yourself down the line – not even Google.

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Featured Image: BestForBest/Shutterstock