Google has integrated its most advanced AI model, called Gemini, into the Google Ads platform to enhance advertising performance.
According to Shashi Thakur, Vice President and General Manager of Google Ads, this integration is meant to make it easier to create ad campaigns and help ads connect better with what people are searching for online as search behavior evolves.
Gemini: A New Frontier in Ad Creation
Gemini, which Google considers its leading AI technology, will now be used more widely across Google’s main products and services.
Applying Gemini to Google Ads is expected to be transformative, as it will enable more natural, conversational interactions that make it easier for users to create search advertising campaigns.
Thakur expressed enthusiasm about the progression, saying:
“We’ve been actively testing Gemini to further enhance our ads solutions. And, we’re pleased to share that Gemini is now powering the conversational experience. It’s the first of many Gemini integrations to come.”
The conversational tool combines advertisers’ expertise with Google’s AI capabilities. It starts with the advertiser’s website URL and uses AI to help create optimized search ad campaigns. The AI generates relevant ad content like creatives and keywords based on the site.
Beta Access For Advertisers
Google has launched the beta version of its conversational ad creation tool to English-speaking advertisers in the US and UK. The company plans to make it available globally to all English-language advertisers over the next few weeks. Support for additional languages is expected to follow.
Tests Show Enhanced Quality With Less Effort
Preliminary testing with a few advertisers has shown that conversational interactions considerably improve the quality of search advertising campaigns while decreasing the need for manual work. Ad Strength, a measurement that assesses ad copy relevance, quality, and diversity, has been a key sign of this enhancement.
Tom Foster, a Paid Search Manager at Page1, praised the new system:
“I found the conversational experience very easy to use. It helped me create even more high-quality ads with ‘Good’ or ‘Excellent’ Ad Strength, which has further improved the performance of my campaigns.”
Upcoming Features & Responsible AI Integration
Google is addressing the difficulty advertisers have in making engaging visual ads. Google plans to add a tool using AI to recommend images for campaigns. Advertisers will still choose final images to match their goals.
To be transparent about AI-generated content, Google will mark these images with invisible SynthID watermarks and metadata. This identifies images made by AI in Google Ads.
Stats show small businesses using conversational ad building are 42% more likely to get “Good” or “Excellent” Ad Strength scores. This matters because Ad Strength strongly predicts conversion rate. On average, conversions increase by 12% when Ad Strength goes from “Poor” to “Excellent.”
Looking Ahead
Google shares the industry’s optimism about the potential for AI to create new value for consumers and advertisers. However, Google aims to develop and deploy AI responsibly, in line with the principles for ethical AI development that the company outlined in 2018.
Advertisers and industry observers are advised to monitor Google Ads for future AI-enabled upgrades. Google also provides educational AI resources and tools for those interested in learning more about and working with AI technology today.
Google has announced an update to its policy on inappropriate content for advertisements, aiming to better address ads running during or about sensitive world events.
The new policy will go into effect in February 2024 and more clearly define what constitutes a “sensitive event” for purposes of prohibiting certain exploitative or insensitive ads.
Defining Sensitive Events
As per the updated policy, a sensitive event is defined as an unforeseen or unexpected situation that poses a significant risk to Google’s ability to provide high-quality, relevant information while reducing insensitive content in prominent and monetized features.
Sensitive events include those with major social, cultural, or political impact such as civil emergencies, natural disasters, public health crises, terrorism, conflict, or mass violence.
During such events, Google may take actions to address risks around misinformation, fraud, price gouging, and other predatory practices.
Prohibited Exploitative Practices
The updated policy provides the following examples of prohibited ads:
Price Gouging: Ads for products or services that artificially inflate prices during crises, or prohibit access to vital supplies.
Misdirected Traffic: Advertisers are prohibited from using keywords related to a sensitive event to drive additional, unrelated traffic to their content.
Victim Blaming: Ads claiming certain victims are undeserving of support will be banned.
Google’s Commitment To Responsible Advertising
Google’s update to its inappropriate content policy for ads aims to strike a balance during major world events.
On one hand, the company seeks to provide access to timely information and maintain revenue streams that support online content and services. However, Google faces rising demands to limit misinformation and exploitation on its advertising platforms.
The expanded restrictions around sensitive events show Google’s continued efforts to address these issues.
For advertisers and publishers, the changing policies require close attention to stay compliant. And for users, it remains to be seen how effectively the rules curb harmful ads in the moments that matter most.
Celebrate the Holidays with some of SEJ’s best articles of 2023.
Our Festive Flashback series runs from December 21 – January 5, featuring daily reads on significant events, fundamentals, actionable strategies, and thought leader opinions.
2023 has been quite eventful in the SEO industry and our contributors produced some outstanding articles to keep pace and reflect these changes.
Catch up on the best reads of 2023 to give you plenty to reflect on as you move into 2024.
“Is this a good click-through rate for our campaigns?”
“Why is our cost per conversion high? Is this in line with our competitors?”
“What’s a good conversion rate?”
“Why was performance down yesterday?”
How many times do you get asked these questions in a week? A month?
Nothing’s more frustrating than getting these questions from your C-suite team without having data to back them up. Or, you have outdated data that is not useful in today’s advertising world.
Keeping up-to-date on industry Google Ads benchmarks is crucial to help answer these questions for your business.
Wordstream by LocaliQ recently published its Search Advertising benchmarks for 2023.
The data consists of data points from thousands of campaigns in both Google and Microsoft Ads for the top 20 industries. Some of the top industries include:
Arts & Entertainment.
Automotive.
Education.
Finance & Insurance.
Health & Fitness.
Home Improvement.
Shopping & Retail.
Travel.
While these benchmarks are a starting point, it’s important to note that many factors go into setting benchmarks that are attainable for your business.
We hope this data is useful for you to help level-set expectations and goals for your business, and get a sense of how you stack up to the competition.
In this report, you’ll find benchmarks for Search campaigns in Google & Microsoft Ads for:
Click-through rate (CTR).
Average cost-per-click (CPC).
Conversion rate (CVR).
Cost per acquisition (CPA).
Let’s dig into the data.
Average Click-Through Rate In Google & Microsoft Ads By Industry
Screenshot from LocaliQ, July 2023
The average click-through rate across all industries sat between 3-5% in 2023.
In LocaliQ’s data, the industries it pooled together outperformed that CTR, averaging over 6%.
Compared to when the company first started gathering data in 2015, the average CTR for Search ads was minimal at 1.35%.
The business category that boasted the highest CTR was Arts & Entertainment, with an astounding 11.78% CTR.
At the other end of the spectrum was Attorneys and Legal Services at a 4.76% CTR.
The CTR metric should be analyzed as only one indicator of performance, not the end-all-be-all when trying to determine if your ads are doing well.
Many factors can influence CTR, including:
Your competition (Is the SERP saturated?).
Your bidding strategy.
Your position on the results page.
Your ad copy relevancy.
Your audience targeting.
When analyzing your ads, Google gives you indicators of performance within your Quality Score. If your average CTR is below your peer set in your industry, Google will let you know.
When optimizing your Search Ads, make sure you’re taking a look at levers outside of just ad copy.
Average Cost-Per-Click In Google & Microsoft Ads By Industry
Screenshot from LocaliQ, July 203
While the Attorneys and Legal Services showcased the lowest CTR, it also boasted the highest average CPC. In 2023, the average CPC for this industry came in at $9.21.
This average is unsurprising, given the higher-than-average cost of acquiring a customer.
On the lower end of the spectrum, Real Estate and Arts & Entertainment industries had the lowest average CPC at $1.55.
Similar to analyzing the CTR metric, average CPC is just one performance indicator.
For example, your ads may show a low average CPC and a low CTR. This could mean your bids aren’t high enough to be competitive in the market, and you may want to consider raising bids.
On the other hand, if you have a higher-than-average CPC, you’ll want to monitor these more closely to ensure you can prove your return on ad spend/investment.
Average Conversion Rates In Google & Microsoft Ads By Industry
Screenshot from LocaliQ, July 2023
The average conversion rate is calculated from the number of leads/sales you get divided by the number of clicks from your ad.
When looking at the data from 2023, the average conversion rate varied highly across industries.
On the high end of performance, Animals & Pets had the highest conversion rate at 13.41%, followed by Physicians and Surgeons at 13.12%.
The industries that had the lowest conversion rate included:
Apparel/Fashion & Jewelry: 1.57%
Furniture: 2.57%
Real Estate: 2.88%
When looking at these industries and the products they sell, these conversion rates make sense.
Furniture is a high-ticket item for many customers. Users do a lot of research online before making a purchase. Not only that, but because of the price tag, many customers end up purchasing in stores instead of online.
While the conversion rate may be low in this particular industry, it’s more important than ever to be able to measure offline conversions, such as in-store visits or purchases.
In the apparel industry, new brands seem to pop up every day.
If you do a simple search for Nike sneakers, the number of sellers and resellers for these types of products has skyrocketed in recent years.
The amount of competition can directly contribute to a low (or high) conversion rate.
Average Cost Per Acquisition In Google & Microsoft Ads By Industry
Screenshot from LocaliQ, July 2023
The average cost per acquisition is a core KPI that advertisers should keep a pulse on when analyzing performance.
It’s no surprise that certain industries have a much higher CPA compared to other industries. Some of the factors that can influence CPA include:
Average CPC.
Average CTR (this influences your CPC).
Audience targeting.
Conversion rate.
The type of product/service you’re selling.
The Careers & Employment industry had the highest CPA out of all industries at a whopping $132.95.
This is not surprising considering the possible barriers to entry during economic volatility.
In the past 12-16 months, many businesses have been forced to lay off a portion of their employees.
On the other hand, many workers are voluntarily leaving their professions to switch companies, start their own businesses, or simply take time off.
Those factors together can result in the high CPA in the Careers & Employment industry.
However, while the CPA may be high, many businesses in that industry find that well worth the investment, considering their return on each employee.
Those industries with lower-priced products and services likely have a lower CPA goal.
The industries that showed the lowest CPA in 2023 were Automotive Repair, Services & Parts at $21.12, followed by Animals & Pets at $23.57.
Compared to last year’s data, 21 out of the 23 industries reported an increase in CPA.
Image from LocaliQ, July 2023
As mentioned above, such a large fluctuation in CPA could be due to the record inflation and economic instability of the past few years.
Summary
If you find yourself on the lower end of the spectrum compared to others in your industry, don’t fret!
These benchmarks are meant to be a guidepost for you.
If you’re struggling to improve campaign performance, try following the tips below:
#1: Set the right (and realistic) goals for your campaigns.
#2: Test out other search engines besides Google.
#3: Choose the right budget(s) for your campaigns.
#4: Invest in a good keyword strategy.
#5: Focus on your landing page strategy and ad optimization.
#6: Don’t forget about the mobile experience!
Make sure to check out Wordstream by LocaliQ’s full report on benchmarks and tips to improve your campaigns.
Microsoft Advertising aims to lead the transformation of video marketing through partnerships with Netflix and top streaming platforms.
In 2023, the emergence of Connected TV (CTV) and over-the-top (OTT) platforms is redefining the advertising landscape.
During a recent webcast, Microsoft highlighted the significance of its unique tech stack, which provides advertisers with the flexibility to craft campaigns that align with their business needs.
Partnering With The Top Streaming Platform For Video Ads
Microsoft emphasized its commitment to driving innovation through partnerships with leading streaming platforms, particularly with an exclusive agreement with Netflix to power its ad-supported subscription tier.
This partnership expands Microsoft’s advertising reach, providing clients access to a highly engaged global audience. It comes at a time when the majority of US consumers will stream on one or more platforms like Netflix and Roku.
The webcast also shared insights into overcoming the complexities of video ad buying in a fragmented market.
Microsoft’s solution integrates unique data signals, collaboration with streaming services, and tailored video buying workflows to navigate these challenges efficiently.
Advertisers can benefit from a unified platform that offers consolidated deal buying and cross-channel measurement solutions, ensuring campaign success.
Scalable Advertising Solutions
Microsoft Advertising’s role in this rapidly evolving market is pivotal, offering over 860 CTV publishers, 100B weekly video impressions, and 1,200 always-on video deals.
The enterprise-level DSP, Microsoft Invest (powered by Xandr), further allows for intricate media buying strategies across various channels and formats, emphasizing the company’s versatile approach.
Advertisers have the opportunity to increase reach, enhance return on investment (ROI), and automate campaigns at scale with Microsoft’s robust suite of advertising solutions.
This comprehensive marketplace delivers scale, premium placements, and customizability that promise to revolutionize video and CTV advertising.
In the competitive world of advertising, connecting with enthusiastic audiences during sporting events presents a unique and lucrative opportunity for brands.
With 31% of the US population engaging in digital live sports content monthly and similar trends in the UK, advertisers are looking to score big with fans year-round, not just during major events like the Super Bowl.
Given the challenges of aligning advertising dollars, sports sponsorship collaboration, and creating a cohesive media strategy, Microsoft Advertising proposes a synergistic solution.
Full Funnel Media Solutions
With 77% of American viewers simultaneously online while watching TV, the platform facilitates targeting across various channels from Connected TV and Paid Search, all in a single ecosystem.
Advertisers from various sectors should leverage this window, including the MVPs (key sports-related brands), the Veterans (brands with sports sponsorships across multiple industries), and the New kids on the block (brands new to sports marketing).
A particular success story highlights a consumer-packaged goods brand that observed significant increases in website and retailer page visits after aligning with a major sports event.
Audience Segmenting For Specific Fan Types
Understanding the audience is key. Segments like Enthusiasts, Tailgaters, Game Hosts, and even the Forced Fan represent the diverse demographic of sports audiences.
Targeting them through Microsoft Advertising enables advertisers a way to engage effectively, whether through Genre targeting on MSN Sports, in-market audiences for sports gear, or context-driven display ads.
Integration and smart use of existing content made for other mediums are encouraged, ensuring easy onboarding onto the Microsoft Advertising Platform. Moreover, transparent reporting and support from Microsoft’s team help streamline campaign optimization.
Team Players For Advertising Solutions
Marketers are encouraged to team up with Microsoft to maximize sports marketing results into the New Year.
Google will roll out new features and integrations for Google Analytics 4 (GA4) for first-party data, enhanced conversions, and durable ad performance metrics.
Beginning in Q1 2024, Chrome will gradually phase out third-party cookies for a percentage of users, allowing for testing and transition.
Third-party cookies, which have been central to cross-site tracking, are being restricted or phased out by major browsers, including Chrome, as part of its Privacy Sandbox project.
The following features should help advertisers “unlock durable performance” while preserving user privacy.
Support For Protected Audience API In GA4
A key feature of recent updates to Google Analytics 4 is the integration of Protected Audience API, a Privacy Sandbox technology that is set to become widely available in early 2024.
This API allows advertisers to continue reaching their audiences after the third-party cookie phase-out.
What Is The Protected Audience API?
The Protected Audience API offers a novel approach to remarketing, which involves reminding users about sites and products they have shown interest in without relying on third-party cookies.
Screenshot from Google, December 2023
This method involves advertisers informing the browser directly about their interest in showing ads to users in the future.
The browser then uses an algorithm to determine which ads to display based on the user’s web activity and advertiser inputs.
It enables on-device auctions by the browser, allowing it to choose relevant ads from sites previously visited by the user without tracking their browsing behavior across different sites.
Key Features And Development
Key features of the Protected Audience API include interest groups stored by the browser, on-device bidding and ad selection, and ad rendering in a temporarily relaxed version of Fenced Frames.
The API also supports a key/value service for real-time information retrieval, which can be used by both buyers and sellers for various purposes, such as budget calculation or policy compliance.
The Protected Audience API, initially known as the FLEDGE API, has evolved from an experimental stage to a more mature phase, reflecting its readiness for wider implementation.
This transition is part of Google’s broader efforts to develop privacy-preserving APIs and technologies in collaboration with industry stakeholders and regulatory bodies like the UK’s Competition and Markets Authority.
The Protected Audience API offers a new way to connect with users while respecting their privacy, necessitating a reevaluation of current advertising strategies and a focus on adapting to these emerging technologies.
Support For Enhanced Conversions
Rolling out in the next few weeks, enhanced conversions is a feature enhancing conversion measurement accuracy.
Screenshot from Google, December 2023
Enhanced conversions for the web cater to advertisers tracking online sales and events. It captures and hashes customer data like email addresses during a conversion on the web, then matches this with Google accounts linked to ad interactions.
This method recovers unmeasured conversions, optimizes bidding, and maintains data privacy.
For leads, enhanced conversions track sales from website leads occurring offline. It uses hashed data from website forms, like email addresses, to measure offline conversions.
Advertisers can import offline conversion data for Google Ads from Salesforce, Zapier, and HubSpot with Google Click Identifier (GCLID).
Proper Consent Setup
To effectively use Google’s enhanced privacy features, it’s essential to have proper user consent mechanisms in place, particularly for traffic from the European Economic Area (EEA).
Google’s EU user consent policy mandates consent collection for personal data usage in measurement, ad personalization, and remarketing features. This policy extends to website tags, app SDKs, and data uploads like offline conversion imports.
Google has updated the consent mode API to include parameters for user data consent and personalized advertising.
Advertisers using Google-certified consent management platforms (CMPs) will see automatic updates to the latest consent mode, while those with self-managed banners should upgrade to consent mode v2.
Implementing consent mode allows you to adjust Google tag behavior based on user consent, ensuring compliance and enabling conversion modeling for comprehensive reporting and optimization.
Consent Mode integration with CMPs simplifies managing consent banners and the consent management process, adjusting data collection based on user choices and supporting behavioral modeling for a complete view of consumer performance.
Durable Ad Performance With AI Essentials
To effectively utilize AI, marketers need robust measurement and audience tools for confident decision-making.
Google provided a general checklist of AI essentials for Google advertisers. In it, advertisers are encouraged to adopt AI-poweredsearch and Performance Max campaigns, engage in Smart Bidding, and explore video campaigns on platforms like YouTube.
Google also offers a more in-depth checklist for Google Ads, Display & Video 360, and Campaign Manager 360.
Screenshot from Google, December 2023
More Ways To Prepare For The Third-Party Cookie Phase Out
As third-party cookies are phased out, it’s essential to audit and modify web code, especially focusing on instances of SameSite=None using tools like Chrome DevTools.
Adapting to this change involves understanding and managing both third-party and first-party cookies, ensuring they are set correctly for cross-site contexts and compliance.
Chrome provides solutions like Partitioned cookies with CHIPS and Related Website Sets.
At the same time, the Privacy Sandbox introduces APIs for privacy-centric alternatives, with additional support for enterprise-managed Chrome and ongoing development of tools and trials to assist in the transition.
As Google continues to update resources and documentation to reflect these changes, stakeholders are encouraged to engage and provide feedback, ensuring that the evolution of these technologies aligns with industry needs and user privacy standards.
We’re diving into insights from over 16,000 ecommerce businesses, showing the trends that shaped PPC advertising in 2023, and how to use them to move forward into 2024.
In this insightful interview with Jacques van der Wilt, he and Loren examine highlights from DataFeedWatch’s powerful Multichannel Marketing Report. They take a look at which PPC strategies stood out the most and which channels provided the best return, along with big changes coming next year.
Using these insights, they also explore the most common challenges in ecommerce PPC campaigns, and what leading brands are doing to succeed right now.
We looked into the feeds of 15 to 20,000 online stores in all of those countries, and that means that’s such an incredible volume that what we see basically is an almost exact picture of what is happening in ecommerce advertising. – Jacques van der Wilt, 2:20
Obviously Google is still the largest channel. Almost every retailer is using that. However, we can see that social is beginning to eat their lunch. – Jacques van der Wilt, 6:06
I think Amazon has a big influence on everything. They’re probably market leader in ecommerce, so their impact must have been big. Yet I think that it’s not primarily driven by Amazon. – Jacques van der Wilt, 11:59
[0:00] About Jacques van der Wilt [2:11] DataFeedWatch’s Multichannel Marketing Report [6:06] Marketing channel trends [9:14] Growth of TikTok [13:42] The 3 largest barriers to PPC growth in 2024 [16:58] Other challenges retailers are facing [21:40] Best tactics for PPC practioners to use in 2024 [25:02] Challenges for retailers with large inventories
Resources Mentioned:
Creating or modifying images with AI is super easy. Imagine you’re unhappy with your images as a retailer, but you have images for 10,000 products. It’s horrible. So you can do that much quicker. It’s a big time saver. – Jacques van der Wilt, 16:02
Connect with Jacques van der Wilt:
Jacques is a shopping feeds industry leader, start-up mentor, and entrepreneur. He’s the founder of DataFeedWatch (acquired by Cart.com in 2022): a leading global feed management and optimization company that helps online merchants optimize their product listings on more than 2000 shopping channels in over 60 countries. Before founding DataFeedWatch, Jacques held leadership positions in the US and Europe. He is also a seasoned guest speaker at industry events and a mentor at Startup Bootcamp.
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