Google’s most recent change to PMax and Shopping means higher cost and less control for advertisers. People love it ?? ? It’s actually pretty simple: If a product is covered by both PMax and Shopping campaigns, ad rank now determines which one takes precedence. ? So why is this bad? ? Before this, there was a hierarchy: PMax always trumped Shopping. In essence, it used to have ultra-high priority, whereas Shopping campaigns were set to high, medium, or low. ? Now, this clear hierarchy is gone: PMax competes with shopping campaigns on ad rank, regardless of priority. If you have multiple shopping campaigns, they still observe priority among themselves, but then the highest one competes with PMax on ad rank. ? This leads to higher cost. ? To understand why, we need to take a closer look at how this works: ? Ad rank = CPC bid x click-through probability ? The second factor also goes by other names (Quality Score, “expected CTR”), but it doesn’t matter: Since the product ad looks the same regardless of campaign type, the second factor will be the same. Ergo: the higher ad rank is determined by the CPC bid alone. ? So you have two CPC bids. If those are different, the higher one enters the auction. ? Before, with campaign priorities, it was sometimes the lower bid and sometimes the higher bid that entered the auction. Now it’s always the higher one. This difference between "sometimes" and "always" is what leads to higher cost. ? There’s also less control. How come? ? The CPC bid is usually set through Smart Bidding. Smart Bidding considers many factors to determine the value of a click. Again, this is the same regardless of campaign type. Nobody thinks “this feels like a PMax campaign, I’m going to buy twice as much”. ? What’s left for Smart Bidding to determine the actual bid: ???Target CPA/ROAS ???Budget constraints ???Marginal CPA/ROAS ? We control targets and budgets. But marginal CPA or ROAS is completely outside our control. To give you an idea about this complicated subject: If your target ROAS is 1000% and your campaign is projected to reach 1200%, then there’s room and it can bid higher (this is very simplified). ? Bottom line: There are some very complex calculations that determine which campaign gets to serve. From our perspective this is basically arbitrary. ? What does this mean for advertisers? ? If you have PMax and Shopping campaigns in your account, you might see this change reflected in your performance as we head into Q4. ? As usual, knowing what’s happening is key. Since Google has yet to inform most advertisers, we’ve started alerting clients of our housekeeping tool SEA Safeguard if they are affected. ? In general, I would advise avoiding conflicts between PMax and Shopping campaigns. This means avoiding overlaps in terms of product coverage and targeting. The simplest way to do this is using only one campaign type for shopping ads.
I tend to disagree. There are some interesting opportunities emerging here where pMax is stuck serving on tried and true products/queries where having a Shopping campaign managed underneath can introduce new products into the auction increasing coverage. These historically wouldn't serve from Shopping because of pMax priority 0. I do agree the management of these two together might be more challenging because none of us have the full picture of what goes into Ad Rank, but feels like some big opportunities to squeeze yield from the system going forward.
Is it confirmed that it'll work like this, or is this your guess? :)?
While I like your reasoning, I'm not sure it's correct enough. Or at least here are some differing considerations. So, actual auction mechanics are not changing. You mentioned that earlier sometimes a lower bid could beat a higher bid (and "priority" not being an ad rank factor), giving strong evidence it's not all about the bid. This is still true after the update. There's the bidding algo and audience layer in the mix. In many cases, your Standard Shopping probably wouldn't be using the same automated bidding algo as your PMax, therefore not being as hyper-focused on the same soon-to-be-converting audience as PMax would = actual overlap becomes negligible. Those are just the first thoughts that came to mind.
If you run your campaigns with a clear distinction of what standard and pMAX is used for and set them up accordingly in regards to targeting, this is not an issue. This will only become an issue when you run your setup as Google intends you to run it. Broad. Low degree of control. Intransparent. If you have done your homework, all is fine. But thanks for the clarification. I was wondering why people got so excited aswell ??
Also ich habe die Befürchtung, dass nur PMax den aktuellen KI-Entwicklungsstand enth?lt und dadurch die alten Kampagnentypen zunehmend das Nachsehen haben. Google will, dass wir die Kontrolle abgeben und sitzt am l?ngeren Hebel. Aber Kampagnen ohne Klickgebotsbegrenzung bleiben für mache Konten einfach tabu. Das Thema ist für mich eh ein rotes Tuch.
Great explanation, as always, Martin. Even an Google Ads backend noob like me gets that point. Will it hurt Google in the end? If costs raise without having a better result, advertisers might reduce the ad spend.
Hi Martin, Google used to prevent your keywords from competing with one another. Only one of them with a higher ad rank would enter the auction, leaving others out of that same auction. This wouldn't increase cpcs but would lead to other campaigns containing left out keywords underdeliver. So, this mechanism doesn't apply in this case? If so, this is not good news at all :/ "If multiple keywords, targeting the same domain, are eligible to match the same search term, they don't compete with each other in the auction." https://support.google.com/google-ads/answer/2756257?hl=en&sjid=17745210299453097990-EU
but ad rank doesn't come into play if we're shifting (by exclusions) core terms out of PMax and into standard shopping, which is where I see the exciting potential.
IYO what is the breakdown (for a same product or category of products) between e-commerces using : - PMax + Shopping - PMax only - Shopping only
Founder @ Big Flare | $150M+ Ecommerce Revenue Generated | Google Ads Geek | AI Whisperer | Educator
4 个月Here’s an idea: this change is a positive thing, because… First I’m assuming here you’re using Smart Bidding/Target ROAS in both campaigns, not budget limited, have enough conversion volume, your aim is to maximise revenue, and you have set good goals/targets. In this case what it’s eventually going to boil down to is whichever ad makes more money is going to win. Costs may rise but that’s not the full picture. So will revenue. And if you have set your goals well this will be profitable. There will be some sort of difference between the two campaigns. If they were exact duplicates then there would be no point running the two campaigns. Maybe the Target ROAS will be different, maybe the audience, or maybe you have two different products but both competing for the same search term. Because something will be different, one ad will be more likely to generate more revenue at its given target ROAS. This change allows the ad that the system thinks will generate more revenue to be prioritised. So if you believe the system is generally good at figuring out which ad will generate more revenue, and your goal is to maximise revenue at a given target ROAS, then this change can be thought of as a good thing. Thoughts?