Gauging Google’s Automated Response to Pay-to-Play SEM Updates
For most of its existence, Google’s search engine marketing platform has worked as a somewhat manually operated auction. Advertisers put in their bids for clicks, tweak their audiences or campaigns and watch to see what happens. On the one hand, that approach has offered a great measure of control; on the other hand, it has made it hard for companies that don’t have dedicated SEM teams to compete in the marketplace.
Starting in 2023, Google will be automating much of its SEM system and tools. What will that mean for large companies that rely on SEM revenue? Or for smaller companies hoping to finally crack into the SEM-driven advertising world? Or for consumers who benefit by getting matched up with the products and services they seek?
How It Started
In its infancy, Google Adwords enabled advertisers to show sponsored text ads on Google’s search engine results pages — known as SERPs — by connecting the user’s search term to an advertiser’s keyword. Of all advertisers whose keyword matched the search term, the one with the highest bid for that keyword was awarded the first (i.e., the most visible) listing on the page, and the subsequent listings were given to the next-highest bidders. Advertisers were able to earn themselves more prominent placement on a SERP and, as a result, more click traffic by outspending their opponents — at the cost of return on investment.
During the mid-2010s, Adwords’ machine learning began to influence advertisers’ ability to target a more valuable searcher or reduce the number of ads served to so-called unqualified searchers. The re-introduction of automated “target cost per acquisition†bidding strategy (or tCPA) in 2013 allowed advertisers to set a desired cost per conversion, and Google would attempt to maximize the number of conversions received at or below the predetermined spend. From a bidding perspective, Google would be able to raise the bid on any keyword to give the biggest-spending advertiser the best chance to capture a quality click, or an advertiser could opt to spend less for a lower-quality click.
How It’s Going
Many advertisers (and not without justification) already look at Google as a black box where money goes in and hopefully results come out, and for some, the automation push could result in less control than ever over ads in the face of stiffer-than-ever competition. The new paradigm also presents new and potentially lucrative opportunities, however.
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Potential Advantages
Performance Max (Pmax) campaigns leverage not only automated bidding — as with tCPA and “target return on ad spend†(tROAS) — but also employ automated ad creation based on advertiser-supplied assets. These dynamic ads are served not only on the Google search network, but on the Google display network, YouTube, Gmail, and Discovery placements. That streamlines and simplifies key components of marketing, freeing up invaluable time for campaign asset creation that will be vital in the growing marketplace. Another notable change is the removal of keyword targeting in favor of audience signals that group users into audiences based on search terms or behavior — potentially a more organic and well-rounded way of predicting a user’s needs and future actions.
Causes for Concern
Still, as SEM professionals, we should be doing our due diligence in substantiating Google’s recommendations. One point of debate is over transparency: While audience signals may paint a bigger picture, the groupings that comprise the picture (for instance, the search terms) aren’t visible to marketers. Another concern is that, while automation makes SEM marketing accessible to smaller businesses not familiar with the intricacies of Google’s advertising options, SEM marketers are always going to have the upper hand thanks to more experience and greater adaptability — which could limit success for mom-and-pop shops hoping to benefit from SEM marketing.
Keeping Up With "The Only Constant"
Google is always evolving to hit the moving target of consumer needs while fulfilling product obligations to advertisers. There will be ups and downs — as we’re certainly not going to like every update we’re served. But if we embrace each new change as an opportunity to better serve the needs of our customers, we’ll be able to more nimbly navigate the ever-shifting landscape.