Complexity @ Google Ads…. How it affects Enterprises & SMBs

Nobody has seen a media company like Google. It has doubled sales despite its large scale in less than 5 years, as seen above.

This rapid growth has happened due to the trillions of search queries that are growing each year and the pace of innovation at Google Ads.

Google Ads has innovated in hundreds of big and small ways in the last 2-3 years. These are pretty hard to cope up even for enterprises spending millions of $ p.a. And is terribly hard on smaller Google spenders.

Let me explain it through a few innovations (these are among hundreds of innovations at Google Ads)

Some key innovations in last 2 years of Google Ads:

1)     Average position of our spending is gone… 

This means that clients don’t really know where the ad appeared. Only the top impression rate is available.

And clients are forced to invest additional CPCs to try and improve their clicks / conversions.

2) Broad match is WAY MORE brooooader

Companies used to utilize broad match to ensure that they don’t bid for every keyword imaginable. Now Google has made broad match brooooader. 

This puts pressure on companies to manage their “negative keywords” aggressively… since quite a bit of junk comes through because of this new broad match and phrase match definitions.

3)     Only expanded text ads

This means that the previous way of using standard text ads is long gone – and clients are forced to do these things to increase their ROI:

-         Have a range of 3-4 ads running in parallel for each ad group

-         Have a range of extensions to increase clicks

-         Compelling “ad copy” is encouraged…with close relationship to the landing page

All of this with say 500 to 1,000 ad groups for a spend of $100,000 p.m. means enormous amount of work…. With continuous monitoring of keywords, bidding etc to be done in parallel.

4)     Image ads / Gallery ads on search

While Google ads remained text-only for the longest ever time… they have opened up image ads for select advertisers who spend a ton of money on them.

These have significantly higher CTRs on mobile in particular

5)     Call-only ads

While these are variations of call extensions, these are more effective for some categories where consumers just want to speak to somebody on the go.

They are available only in some geographies due to limitations of Google’s call forwarding technologies as of now.

6)     Target CPA

Once a campaign/ad group has enough history, Google encourages moving to “Target CPA” instead of manual bidding approaches.

While this is supposedly aided by Google’s AI algorithms, the net effect is an immediate increase in both spending, conversion and CPA. (since the recommended CPA is always a bit higher than the account’s current CPA)

Over a period of time, it takes skill to reduce this target CPA – without angering the all-powerful Google AI algorithms.

This also takes a bit of time to do it gently without creating a sudden anger in the above-said algorithms. (if you reduce the target CPA suddenly, the conversions drop sharply!)

What does this mean for Enterprises?

If an enterprise spends upwards of Rs 70 L / $100,000 p.m., they would surely need an army of ~10 highly skilled people to manage the spend.

The spend also has to be continuously monitored, since there are a range of innovations to be monitored – along with day-to-day work of looking at the keywords, bidding, ads etc. This continuously increases the costs and attrition related to the ~10 highly skilled people required to manage these innovations.

While Google also provides specialized account managers to help with the spend, most enterprises rely on their in-house teams to maximize their ROI. (I wrote about Google's 20,000 account managers/sales team members here.)

…and what happens to small Google spenders?

If an SMB or Mid-sized client spends in the region of say Rs 7 L / $10,000 p.m. on Google, it would still take ~2 highly skilled SEM team members to manage, given the constant threat of attrition that exists in the digital marketing space.

Also these small spends put severe dent on what can be done with respect to experimentation in bidding (Target CPA for instance), ads (# of ads to try out, Discover-Gallery ads to try etc) or Keywords to try (Broad-Exact etc).

Further the SMB spender would surely get poorer ROI, just because of their budgets + limitations on the skill levels of their employees to manage the Google complexity.

So what?

Over the last 2-3 years Google has increased its sales dramatically, as I show in the first picture above. But so has the complexity of the Google Ads product.

This means that thousands and thousands of SMBs and Mid-sized advertisers are not well-served by the current version of Google Ads product.

What can Google do to make it better?

-         Try to manage small spenders better… by “productizing ad solutions” (Eg: calls for small restaurants in 5 km vicinity)

-         Provide greater support/service…. By “proactively providing these solutions”

o  (Maybe insource some of the support/service… instead of outsourcing to partners?)

While the above could cost money, these could really make an impact on smaller spenders…and help them get better ROI on Google.

(Disclaimer: Estimates of # of team members needed per $100,000 of spend could vary by category/country)