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Archive for September, 2013

Good Aggregate Tablet Performance Doesn’t Equal Sound Bid Strategy (Exhibit C)

Wednesday, September 25th, 2013

Let the data revolution continue!

Client C:

  • In retail. This is a good-sized account with a lot of diversity. Big dataset, long date range chosen (but not too long). The business is 99% online.
  • AdWords-attributed revenue annually is north of $4 million and less than $50 million, and that’s all we’re saying. The point is that blanket inefficiencies can cost a lot in absolute terms.
  • All metrics are watched closely by segment (keyword, ad, etc.); particularly revenue (ROAS) & CPA. We also weigh various attribution models in decision-making.
  • The site functions well on both computers and mobile devices, and the checkout process is very smooth by industry standards.
  • Average CPC is virtually identical tablets and computers; tablet CTR’s are slightly higher, but it depends on the product.
  • About 13% of clicks are on tablets.
  • In the aggregate, CPA and ROAS on tablets are only slightly worse than on computers, and they still hit our ROAS targets.

That doesn’t mean there isn’t a problem, though. The trick is in the fact that “aggregate” takes a lot of interesting and diverse behavior by product (ad group), and averages that behavior. It’s in the detail that you find the opportunities, of course. That’s pretty obvious to anyone who has ever bid on a keyword since 2001.

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Here’s what you get when you dig in, ad group by ad group (for this account).

This account is a poster child for the general theory that “usually, tablets perform about the same as computers.” And in many cases, that performance is very good. In fact, as I run through a long list of ad groups by top volume spenders, I find only about 20-25% of the ad groups have deviations in tablet behavior sufficient to warrant a special bid for that ad group. The ratio of “we would bid down” to “we want to bid higher” is around 3:1. What’s more, the deviations in behavior seem to be for recognizable reasons. The poor performers tend to share certain characteristics that attract more casual, nonconverting clicks in the tablet environment specifically.

Long term, it’s clear that Google comes out *roughly even* if they simply allow power users to enter adgroup-specific tablet bid factors, similar to those we can currently control for smartphones.

In this particular account, “only” 20-25% of ad groups being bid too high or too low represents a lot of misallocated resources. It’s really not all that much work to set those bid factors, especially since, past the first 300-400 ad groups, you won’t see statistically significant volume for a long time, so you wouldn’t want to tinker with them.

Whether it is a best-case or worst-case scenario (this being best-case), I say either way, case closed.

As Avinash says: “All data in aggregate is ‘crap’.”

 

Concrete Evidence on Tablet ROI in AdWords (Exhibit B)

Monday, September 23rd, 2013

Continuing the data dump. Data: what a great way to start the week!

Client B

  • In a travel-related business. The dataset is pretty big, so no problem with reliability here.
  • We’re getting lukewarm, but steady, conversions from mobile devices (smartphones) with full browsers. We’re able to control these bids.
  • Success is measured by e-commerce transactions (bookings). Some business is on the phone, but about 60% of conversions happen online.
  • Average CPC is roughly the same between tablets and computers; tablet CTR’s are quite a bit higher.
  • About 15% of clicks are on tablets; about 13% is on smartphones, leaving 72% of current clicks in this account on computers. The smartphone CPC’s are 40% lower than computer, so the spend is manageable.
  • CPA on tablets is about 48% higher than on computers. Much better than the previous example, but still not a profitable channel for the client. Just like any other big segment, we want to control the bid.

Before Enhanced Campaigns, many clients were quite granular with their mobile bidding strategies. Some excluded Android because the buying behavior seemed markedly different on Android devices than on iOS, etc.

I can think of no good reason why Google wouldn’t move to allow this flexibility.  It’s already working well in the mobile devices arena, with many advertisers continuing to spend at “mobile appropriate” levels.

The market for clicks is efficient and opportunists always pile in whenever pricing gets better in a given segment.

“Concrete Evidence” On Tablet ROI in AdWords (Exhibit A)

Friday, September 20th, 2013

At a recent conference, a Google executive reiterated what has become a surprisingly sustained refrain from Google since the full switchover to the Enhanced Campaigns architecture in AdWords: Google believes that “tablet behavior is about the same as computers,” and that there is “no concrete evidence” that any disparities in behavior warrant separate bidding capability for this device type. Yet Google feels that “this does not mean that Google plans to take away the separate reporting, as Google has always maintained the principle of providing data and not shutting off data breakdowns that can help advertisers gain insight.” Do you feel lucky?

Most PPC advertisers are now well aware that all of the granular bidding options for various mobile devices (including OS, device types, etc.) have been taken away under Enhanced Campaigns. Some of this is available for Display, but much of the control was removed for Search. Despite the removal of a “mobile only” campaign capability, some of us believe that the bid factors for smartphones are a convenient way of using a heuristic to simplify account management. The smartphone bid capability is now customizable to the ad group, allowing us to avoid wasting funds on a channel that needs a different bid structure to be profitable for most advertisers.

So the question remains: when will Google let us control our tablet bids? Want to see “evidence” that we urgently need to stop wasting funds in this channel?

All we have to go by is our clients. I’ll start with data from one dart-picked client, and keep going until I get farther down the alphabet. I will also be holding my breath until I turn blue.

In order to maintain client confidentiality, I’ll refrain from sharing date ranges and other private data, but the date ranges are long & the data is significant. The industry segment may be disguised, also.

Client A

  • In a printing-related business
  • Success is measured by e-commerce transactions (sales) and revenues (CPA, ROAS).
  • Average CPC is identical between tablets and computers; tablet CTR’s slightly higher.
  • 7.7% of spend is on tablets; less than 1% is on smartphones as we’ve chosen to largely avoid the latter
  • CPA on tablets is 5.4X that on computers (440% higher)
  • Tablet ROAS is 80% worse than computers (or, it’s 20% the computer number).
  • This is on search campaigns. In our Remarketing campaigns in the Display Network, we have not a single conversion from tablets, ever. Depending on the month, this channel amounts to 10-15% of remarketing spend, but we can’t shut it off or even turn down the bid, despite it never having converted.

Of course, people may switch devices and attribution may not be perfect. And some advertisers may not have a website that makes it quite so hard to customize a purchase on some tablet OS’s, as this advertiser’s does.

But it should be up to the advertiser to decide how to handle bidding on all of their significant, identifiable segments.

Exhibit B… to follow soon!

 


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