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“Jail Time Warranted” For Youths Who Misuse Search Engines: Agency Head — The Shallot

Posted October 15th, 2013 by Andrew Goodman

the shallotBy James Dinnerklieg

Digital Culture Reporter — The Shallot

October 15, 2013

 

Children engaged in class projects, or simply curious about what something is, have been playing havoc with online advertiser ROI, according to Cynthia Tripani, CEO of Providence, RI-based digital advertising agency Cyan Cyclone, LLP.

“Google seems to be bent on enhancing shareholder value, and has an elaborate agency partnership program,” said Tripani. “Yet sometimes I wonder if they have the proper commitment. Children as young as seven years old are searching for items our clients want to sell, yet they don’t have high purchase intent. They may not even have credit cards! It appears they’re just looking for learning opportunities. That’s nice, but it’s hurting our Quality Scores and driving up CPC’s.”

The problem has escalated to the point where the agency, despondent about Google’s lack of enforcement, has turned to the police to consider laying charges in such cases.

“Yes, we’ve been approached,” acknowledged a perplexed-looking Sgt. Don McConnell of the local police department in an exclusive interview with The Shallot. “Unfortunately, we don’t have full national cybersurveillance powers.” McConnell further implied that the same lack of spatial awareness that would cause someone to set up an ad agency in Providence, RI might hinder them from seeing the wider scope of the FBI, NSA, and other agencies when it comes to interfering with searcher privacy.

It appears the problem extends beyond the prepubescent set. Local industrial container supplier Henry Kendrick noted: “I love Google. I use it all the time to check out new wholesalers. Big, thick, metal containers of all shapes and sizes, with fine work on the reflective logos to add an easy 20% to profit margins… I can look at this stuff all day long. But I only make a supplier decision every couple of years, and that’s usually over a few boilermakers at the annual convention in Chicago.”

It appears that some industry experts agree with Ms. Tripani’s take. James Falconer, a former lead engineer on the Bing Ads team, agrees that “this can be a real problem for advertisers. Word to the wise: if you want full exposure on some of these mass information words such as ‘garter snake’ or the exact match for [stinky], try Bing Ads. Our Quality Score was never all that accurate. Chances are you can stay up there for single-digit pennies per click.”

At press time, children and other conductors of low-buying-intent searches remained at large.

This story was fake. And don’t try Googling “The Shallot,” the name of a nonexistent satire publication. You may be disgusted by all the ‘information’ you’re forced to look at.

5 Insanely Great AdWords Automation Tricks

Posted October 7th, 2013 by Andrew Goodman

With the proliferation of high-powered third-party tools, we might be forgiven for overlooking the loads of performance and personality you can inject into an account using the latest and greatest capabilities of Filters in Google AdWords. Give this a try! By creating bespoke outcomes using techniques you customize yourself, you’re not only providing the high-value-added service your client or company deserves, but you can feel a bit more creative than you would using somebody else’s off-the-shelf methodology.

We didn’t used to think of “Filters” as particularly actionable, even though, of course, they are. But with today’s capability to select all the filtered keywords and take any type of action (similar to bid automation) on all of them, AdWords Filters behave nearly the same as third-party bid automation tools, or the “Automate” button in Google AdWords.

 

match-type-filter

 

Using Filters as your automation method comes with a number of advantages. Foremost, you enjoy the flexibility and ease of sorting and viewing that is baked into the AdWords platform. But perhaps the greatest advantage of Filters is the flexibility in date ranges. For some reason, those creating bid automation software have loved “data look-back periods” of a week, a month, or (woo-hoo!) all 90 days…or “all time.” Notice a gap there? Between “90 days” and “six years,” for example? A whole bunch of your account might not have meaningful data from just the past 90-day period. And “all time” may be skewed, or overkill. With Filters, we can opt for a certain 18-month period and make our first couple of parameters related to minimum volume and cost, so we’re now managing a large, meaningful set of keywords or ad groups with a nice, statistically significant history. (To be sure, you should manage accounts frequently – daily, even – but for long-tail segments, you do want long date ranges.)

The principal drawback of using Filters as an automation method is the lack of a well-developed logging system and revert functionality such as that offered by AdWords in relation to the “Automate” button.

Without further ado, here are five fun tricks you can try. Tip: most filters can provide misleading results unless you are thinking of ways to further filter out or avoid anomalies, such as brand terms. It can be helpful to filter at the campaign level as opposed to the whole account level.

  1. Goosebump. Sometimes you need to give volume a boost, but you can’t always do this in the most perfectly rational manner. Special situation: a client in the travel industry is willing to temporarily relax the allowable CPA in order to hit certain short-term volume goals – to impress an investor, for example. The account’s performance over the past 12 months has been volatile due to steady improvement via optimization and the deployment of Enhanced Campaigns in recent months. We want to reach the short-term sales target, but while minimizing waste. We’ll go on data from just the past 120 days, with the parameters as follows:
    • Conversions ≥ 1 (we’re taking any glimmer of performance as smoke to find fire).
    • Conversions ≤ 15 (anything high volume, we already manage directly).
    • Ad position worse than 1.6.
    • Cost/conversion < $52 (target is $60; we’re cherry-picking the good stuff).
    • Select all filtered keywords and increase bids by 10 percent.

    Remember, you can do this with just a couple of keystrokes with the current version of filters. You don’t need to change 92 bids individually. You can also “preview” the change if you wish. The only major difference between this and a more conventional bid management method is that this method is focusing on a shorter date range than might be warranted to make a statistically significant call on what bid level is accurate for some of these keywords. But given the turbulence in the account in the past year, and the short-term nature of the client’s new sales target, taking account of recent conversion behavior is a decent heuristic.

  2. Quality watchdog. This one’s easy. In an account that has relatively misleading attribution in the first place, it’s been decided that pausing low-Quality-Score keywords is high priority even if some of those keywords appear to generate some business. The action taken is to be roughly threefold. First, arrest the drain on the account-wide Quality Score factor by pausing all keywords with QS of three or worse. Second, given the waste that was apparently allowed to go unchecked for two years, determine whether the current account manager is up to the job. Third, rebuild the account structure as warranted, resuscitating some of the keywords and showing them against more relevant ad copy, implementing Sitelinks, and evaluating landing pages. The simple filter is as follows:
    • All keywords in account with Quality Score ≤ 3.
    • Date range: past six months.
    • Select all filtered keywords, and pause them.
  3. Keyword myth-buster. A truism around the micro-water-cooler that is the PPC division of your company has it that all keywords involving the word “buy” or “wholesale” will be worth more than product-related keywords not containing those keywords, so they should always be bid aggressively out of the gate. As it turns out on further investigation, that isn’t always the case. Phrases containing “buy” actually fail relative to other keywords when it involves the broad match type or a mobile device. “Wholesale” only works well when shown against relevant ads and landing pages. How do you challenge the “myth of the buy words” in just a few seconds? Across a whole account or campaign, simply employ the following filter. Again, this parameter is now easily findable in the menu that drops down from the Create Filter function.
    • Keyword text contains: “buy.”
    • Set the date range on this to the most recent one-year period.

    That’s pretty much it. Now you scroll down to the totals at the bottom of the page and look at the relevant statistics (such as ROAS or conversion rate) for “all filtered keywords” and compare it to the mean for “all keywords” across the campaign or account. In an account with many moving parts, this can make a big difference to your methodology in setting initial bid levels for new ad groups, for example. To get more granular with your analysis, you could add parameters for > 30 clicks and match type=broad, for example.

  4. Group love. If you are stuck filtering just for keywords, you probably use volume thresholds to avoid managing keywords with too little data to be statistically significant. But are you forgetting you can also look at aggregate keyword data – in the form of ad groups – to look for signs of trouble that might not be adequately captured by keyword sweeps?
    • Go to the ad group level and set your date range to the past year.
    • Clicks > 100, or some arbitrary volume threshold that is not too high, not too low. (Definitely not too high, as part of the point is to catch underperformers that have been flying beneath the radar.)
    • Assuming your target ROAS (conversion value/cost) is 2.8, filter for conversion value/cost < 1.4.
    • These problem ad groups are now “singled out” for special attention. If your filter only shows 30 to 40 ad groups or less, you could immediately go in and make a number of bid changes in these groups – even on lower-volume keywords arbitrarily. If you have a large account and more than, say, 300 culprits on this list, you may be in for a month or two of more fundamental renovations on these ad groups.
  5. Match game ’13. Here, we’ll go on the warpath against broad-matched keywords that are underperforming, singling them out for an extra dose of the bid-down treatment as they clearly haven’t gotten the message they aren’t wanted. Broad match types can pull valuable impressions away from more specific match types, and that situation won’t abate if they’re hanging around with medium to high bids. In this case, rather than taking the situation gradually, you want to give it a little extra emphasis with across-the-board cuts.
    • Set up your normal bad-keyword-sweep parameters, such as past nine months, cost > $75, cost/conversion > $40.
    • Add a parameter, match type. Check only broad match.
    • Decrease bid for all filtered keywords by 8 percent. Instantly, your account’s more specific keywords get more of a chance to shine, rather than having their thunder stolen by broad match types.

    Over time, your overall ROAS should improve as you bid more accurately by match type as a rule, rather than taking everything case by case. Case by case makes sense on the surface, but if you’re like me, you believe that broad match should be bid above other match types only some of the time. If it’s most of the time, your account isn’t doing as well as it should in terms of relevance. This strategy does not substitute for deep dives into the Search Query Report. It also blends Broad Match Modifier with the more-frequently-misbehaving ordinary broad match, unfortunately. (Come on, Google!)

Many of these techniques are quirky and personal rather than being universal, obvious rules that everyone should apply. This goes to show how much scope there now is for customization and creativity in the use of Filters as bid rules. The Filter menu contains nearly every parameter under the sun, from max bid to impression share, keyword and ad text, engagement metrics like bounce rate, and beyond. Enjoy making your own rules.

This column originally appeared at ClickZ on July 12, 2013. Reprinted by permission.

The Man Who Took On Chips Ahoy… And Won

Posted October 5th, 2013 by Andrew Goodman

Recently, Canada lost a giant in marketing: Dave Nichol.

Strangely, for twelve hours following his death, only one media outlet reported it. And the tributes and official obituaries were particularly slow to trickle in. It’s as if no one quite knew what to make of the man. The Globe and Mail has now published a full obituary weeks after Nichols’ death.

How big an impact did Nichols have on the average consumer? Talk to any Canadian, especially one over a certain age, and they will share with you the experience of:

  • Having eaten a Decadent chocolate-chip cookie (or maybe the whole bag). And remember those Oreo knock-offs with more filling? Seems like the Oreo folks had to run to catch up with that one. I don’t go down that aisle anymore, and the big-ass Oreo knock-offs are one big reason why.
  • Having stuffed their fridge with “Memories Of…” exotic-at-the-time sauces. Nichol introduced things like Szechuan flavoring to the average consumer.
  • Having shopped on price for No Name(TM) products.
  • Switching to President’s Choice peanut butter, because for many years, it was the only credible way for most people to get unadulterated peanut butter in a decent size at a good price. And maybe, especially…
  • Witnessing your usually-immune-to-marketing Mom waiting excitedly for Nichols’ Insider Report, a folksy, old-school 18+ page “newsletter” about recipes, food, new discoveries, etc. — information all delivered to you by pitchman Nichols. For the rest of us, who hadn’t just traveled to Italy or Turkey to check out all the culinary delights, Nichols’ publication was like a brief winter vacation. And in 1980′s Canada — before retail choice exploded and before most ordinary folks were routinely slapping such holidays on their credit cards — those mini-vacations livened up the place just a little bit, evoking sights, sounds, and smells just slightly more exotic than Zamboni fumes.

Someone has finally come out and compared Nichols to Steve Jobs, in a sense. And that’s accurate. He was impatient, detail-oriented, and visionary. He was said to eschew focus groups as pandering to the “lowest common denominator.” Although he never owned or controlled a large company, Nichols did transform an industry and how the average consumer looked at and purchased familiar products.

The Decadent Chocolate Chip phenomenon alone was transformative. “All” Nichol did was oversee the engineering of a much superior private-label cookie to the one that dominated store shelves at the time. Everyone “got” what Nichol had done, because it was everyone’s dream cookie — the one you’d draw up on the whiteboard if you were an immature 6-year-old being asked what you wanted. It would seem to be mostly just chocolate chips — real ones. The dough would be better, too. And you’d jam a few walnut pieces in there wherever there was room. You’d make sure the bag had big close-ups of the cookie all over it. You’d give it an audacious name. And finally you’d sell it for 50 cents less than the dominant brand.

Chips Ahoy didn’t know what hit it. During the Decadent’s heyday, if you’d have dropped in randomly on those Canadian homes with a “need” for a bag of cookies or two, you’d be more than likely to see a bag of The Decadent in the cupboard.

That represented so much of what was to come in the grocery business. Not in every field, but enough to change consumers’ perceptions (and thus, demands) permanently. Brands were in retreat. The grocery retailer could not only wipe what they wanted off the shelves and replace them directly with their private-label creations, their pitchman could speak directly to consumers in those same channels. The success of these products improved the profit picture at the retail level. Those profits meant that the retailer could increase share of voice for their “non brand” brands by outspending the brands themselves.

This accelerated the recognition that television advertising for products like cookies, toilet paper, and soft drinks was becoming increasingly wasteful. Television advertising for these products was based on the idea that costly exercises in “brand lift” would somehow cause consumers to search high and low for one brand over another. Sometimes, they still do. But the proportions have changed. The advertising seems ever more wasteful. And people only want to trust brands in certain areas.

Ironically, those who have cut into the appeal of brands by releasing private-label products — and now, in our era, creating information revolutions and means of helping consumers find out about products — have become the brands themselves.

Nichols as the brand never sat well with his corporate masters. And he never felt adequately recognized. While paid handsomely, Nichol wanted to graduate to the owner class. Imagine a Steve Jobs who was just kept on as a consultant, with his chum Steve Wozniak working anonymously down the hall, both earning $1 million salaries, but ultimately having to bow to the superior class of people who “gave them the opportunity.” It was a great opportunity for Nichols, but it could have become even more. He was right to strike out on his own.

Today, the trim, 40-year-old corporate scion Galen Weston Jr. has taken over the TV pitchman role at Loblaw — a role that had gone dormant after Nichols left many years ago. The role is still a powerful one, and the creation of innovative private label successes continues apace. But of course, Weston is no Nichol. He’s unconvincing as a foodie, and looks even more uncomfortable pretending to enjoy a barbecue with regular folks or holding a piece of fruit handed to him by a well-scrubbed farmer.

But his family and shareholders are big and strong — the strongest in the land. While the Sobey’s folks may have just merged with Safeway Canada, that has been eclipsed by Loblaw acquiring the nearly-as-large-as-itself drugstore empire Shopper’s Drug Mart. Although the corporate structure of all Weston and Loblaw related holdings may be too complicated to convey with a single valuation, all put together it’s above $30bn, far ahead of the competition. That effort to scale up may not have been a choice, but rather a perceived imperative. Various retailers compete with Wal-Mart, Costco, Target, and more. Loblaw makes money not only from groceries, but its pharmacy, the Joe Fresh clothing line, and the various other departments in its Superstores.

Corporate strategy has eclipsed personality and innovation, at least for now. We won’t see another Dave Nichol for a long time to come.

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

Posted September 25th, 2013 by Andrew Goodman

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.

iHomeless-300x225

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)

Posted September 23rd, 2013 by Andrew Goodman

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)

Posted September 20th, 2013 by Andrew Goodman

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!

Testing and Statistical Confidence: The Three Bears

Posted August 26th, 2013 by Andrew Goodman

The primary danger in taking actions in response to data (or even structured tests) in our industry appears to be overconfidence in overt data points and a lack of grasp of randomness and statistical confidence levels, leading to a flurry of actions and tweaks that get us more lost in the woods, not less. (I pointed this out here, last week.)

According to cognitive scientists like Daniel Kahneman and Amos Tversky, humans — even professional statisticians — are “poor intuitive statisticians.” (Predictably, some up-and-coming scholars in the same field have argued just the opposite.)

Translated into terms we see in our daily work in performance-based ad testing (etc.), it’s very common for novices — or even good workers who feel under the gun from bosses/clients who push us to “test more, do more,” — to respond frequently to random bits of data. For example, ads will be paused in favor of the ad or two that are “winning,” despite the statistical confidence levels on the win being (if you took the trouble to run them through a calculator) below 70%, despite the fact that a suboptimal attribution model is used such that sometimes segments get “last click credit” for “converting,” but other times do not (and again, often that is for no rhyme nor reason other than pure randomness). “What’s working better” in a combination of ads, keywords, queries, landing pages, inter-family buying dynamics, and medium to long consideration cycles — is never as easy as it looks. Tweaking to random data is, arguably, tantamount to concluding tests before they’re finished. In other words, you set up a whole bunch of experiments, and then shut them down prematurely. Wasted resources and insufficient learning/takeaways.

Too much random tweaking, we might say, is the action of the Impetuous Bear.

At the other end of the spectrum is the Inertia Bear. That bear once saw an A/B test that was rigged to be exactly the same ad competing with itself. 9 conversions accrued to the “winning version,” and only one to the “losing” (yet identical) version. Consulting the math experts, that outcome (in the case of a truly fair coin flip) happens only ten times out of 1024, so it’s less than 1% likely to happen. And yet it happened! From this, the Inertia Bear decides to insert a lot of these “placebo tests” into testing as a way to guard against acting on purely random results. Over time, though, the paranoia about some results necessary being random or impossible to explain (or correlate with the triggers being tested) begins to creep into a general mistrust of testing. That leads to a broader trend away from building anything new. That works fine, until it doesn’t.

So is the answer to simply be “Moderate Bear” and chart a path in between the two? Well, certainly you want to avoid either of these two extremes.

But in addition to that, you probably should be Curious Bear or Creative Bear, the kind of bear that fashions new things to see what might come of them, regardless of what the data say. If you’re purely driven by spreadsheets, provable outcomes, and “what’s best for the shareholders,” your output is bound to be less interesting. (See If Steve Ballmer Ran Apple.) And the end result of that, we see all around us. It’s why — despite not being an Apple guy either — while I have been somewhat intrigued by the Microsoft Surface tablet, I never bothered to actually buy one. If someone didn’t demonstrably pour some passion into the conception and development of the product, then why would I line up to buy it? Probably, I eventually will. Maybe. (Is that level consumer intent even worth testing around?)

The Relentlessly-Widening Performance Gap

Posted August 14th, 2013 by Andrew Goodman

Recently, I had a chance to review a deck produced by one agency handing back over a PPC account to its client owners (or potentially, a future agency).

Bullet point after bullet point referred to emphatic actions taken in the account. No doubt this only scratched the surface of the great number of actions taken.

I’ve always worked in the AdWords auction with a tacit ideal of “the perfect account.” Of course, there is no such thing. But insofar as every action has a chance to move either towards or away from perfection (much like a bronze sculpture, except that PPC is 90% science, 10% art), the end result of a vast many changes can vary greatly from manager to manager, account to account.

Analogy #43,589: you can think you’re going in a straight line in the forest, when what you’re really doing is making so many wrong turns you get impossibly lost. Getting out of the forest is actually easy, though, if all goes reasonably well. You find a river and follow it. Not counting the potential hypothermia and bears, “lost in the forest” is a picnic compared with “made 5,000 wrong moves in AdWords.”

What if the majority of changes in the account are pure guesswork, such that no change — the status quo — would have been superior to the change? As performance challenges toughen, are those errors compounded by further changes and desperation borne of declining performance? That sense of urgency — ironically, created by an urgent sense that bold, decisive action needs to be taken (often in the absence of insight into how much of that action is based on inexperience or guesswork) — parallels the “Death Spiral” concept that Jim Collins outlines in books like Good to Great. (That’s the opposite of focusing on the Hedgehog Concept and Turning the Flywheel.)

When you see a list of initiatives being taken in account management, it’s worth asking: how much of it is pure guesswork? Guesswork is nothing like testing. A testing orientation will greatly reduce guesswork. A typical “guesswork” bullet point would say something like “paused all ads with CTR below 1%.” Testing isn’t like that. Try instead: “Chose the winning ad, based on a thorough understanding of performance criteria, not necessarily reduced to one variable in all cases, and insofar as feasible, with statistically significant data (to a 95% or 99% confidence level).”

Other guesswork gimmicks include adding 1,000 new exact match keywords to an account from a keyword dump, because you have a theory about exact match. Despite 30% of those phrases being poor fits in the account. One step forward… two steps back… endless busywork… not data-driven.

When accounts are managed based on pure guesswork, they get farther and farther from perfect, rather than the other way around. Approaching perfection isn’t easy. Even the best account managers using the smartest rules will make many so-so decisions. But they need to be vastly outweighed by a strong overall sense of how moving parts in an account strategy fit together. And most of all, the actions taken should be accurate (not guesswork) most of the time.

Not as easy as it looks. It’s especially daunting to decide (many times over) that “no action” is safer than “wrong action.” How can you improve anything unless you’re constantly doing stuff, right? (Unless it’s the wrong stuff!)

If you hand a high quality account over to a relative novice, it’s predictable what will happen: performance will begin gradually deteriorating from Day One. As things worsen, the scattershot “panic tweaking” begins. It then takes a steady hand and a high quality rebuild to bring everything back into line.

Give an account to a guesswork-driven manager to build from the start, and there’s a good chance it won’t reach anywhere close to its potential.

As one of my colleagues said to a client, once: “It’s like chess.” (Unfortunately, turned out the client was a Chess Grandmaster, and far smarter than 99.99% of the population at chess. But that’s a story for another day.)

Manufacturing Purple Cows When Others Can’t

Posted August 12th, 2013 by Andrew Goodman

“All they care about is price.” Seth Godin reminds us that pure commodity thinking is deadly. If that’s all your customers can think about, they don’t care about anything to do with your product.

As PPC marketers wading into competitive (sometimes expensive) keyword auctions, we’re dead before we begin if we can’t suss out some so-called Unique Selling Propositions. Call it an identity. Call it differentiation. Call it a “story” (All Marketers Are Liars). Or just call it a Purple Cow.

Looking back over the long haul of efforts to win through sheer tactics, I can’t find too many businesses that have been unbendingly commodified to the point where we just throw up our hands, helpless. There have been a few. Web hosting is so bad it will make your eyes bleed if you’re a PPC marketer. Obviously, stuff like credit card deals and comparison sites will get pretty ridiculous as well. And even if you’re really good at working hard on the details — endlessly tweaking landing pages for conversion, even — you’re up against other companies that have Tim Ash or Conversion Rate Experts working on the same thing, up against obsessed PPC optimization and testing from the likes of yours truly (Page Zero Media), etc. It’s no picnic.

We were pretty impressed when one of our former clients, 50% of whose revenues came from various takes on web hosting, threw up their hands and divested all of their web hosting businesses in order focus on areas that were working, areas that weren’t so ludicrously commoditized.

Even at that, their other line of business — domain names (in various guises and areas of that industry) — is supposedly dangerously commoditized due to the well-known “GoDaddy effect.” The GoDaddy Effect has reached way beyond GoDaddy of course. Behemoths like Yahoo, various utility companies, web developers and yes hosting companies by the thousands — are all in on the act.

We certainly found that turning a profit on an $8 or $15 domain name registration wasn’t going to be a walk in the park via PPC. Over the years, we had our successes and failures in that endeavor. But the client, fortunately, kept building their unique take on their services, and an extremely loyal following. Plain and simple, what they offered was better and more tailored to the discerning customer’s needs. The sometimes-higher price point was simply a signal of that better neighborhood. And indeed, nearly 100% of the customers are buying from our client as a conscious protest against the GoDaddy’s of the world.

After years of staying the course, building great products, and telling their story in a supposed “commodity” business, this client has experienced a nice little breakout. (Their stock price is, in fact, up 82% in the past year, and business has never been better.)

Drawing out your unique qualities is almost always vitally important unless your competitors (and their agencies or in house professionals) are just stumblebums when it comes to logistics and campaign optimization. And it is almost always possible.

Like Seth says, it’s pretty rare that you can purely out-execute your industry peers by managing strictly to numbers. That is tablestakes, to be sure. But your big breakthroughs come from figuring out how people are going to react emotionally to your offering. Yes, emotionally.

PPC: Fast and Slow

Posted July 11th, 2013 by Andrew Goodman

At our house, “Canada’s Worst Driver” is a huge hit. The show is so popular nationwide that it’s into its eighth season. Not too shabby.

Speaking of “hit,” that’s what contestants do to the inanimate objects in the obstacle courses, on a regular basis. On “Canada’s Worst Driver,” the expert judges consist of a retired cop, a couple of advanced driving instructors, and – yes – a psychologist.

This last one is telling, because the show is like a lab demonstration of just how sound theories of attention are. Even if you’re a talented driver, distractions can be hazardous. Distractions can drain anyone’s ability to concentrate. The most dysfunctional drivers also happen, quite often, to be part of dysfunctional couples. When the hyper-critical spouse is riding shotgun, there is screaming, crying, and denting of fenders. When they kick the spouse out and let the “hopeless” driver go it alone, there is often marked improvement.

Many of us would rather rely on our “raw skill” than admit we need to step back and build in a consistent routine intended to manage our natural limitations.

In the highly acclaimed “Thinking: Fast and Slow,” Daniel Kahneman synthesizes decades of research that has uncovered two distinct thinking “systems” in our brains. System 1 (reactive) is essential for bundling together eons of evolution and a lifetime of experience into seamless performance. As amazing as this system is, its performance is easily degraded – for example, by fatigue and distractions. It won’t work effectively in the modern world without System 2, a deliberative form of thinking that is required to produce rational outcomes.

Back to the example of driving: assuming we’re reasonably skilled drivers, Kahneman notes that we’re amazing at letting our eyes and hands work to steer around a curve, with little consciousness of our skill in processing the information and reacting to it. But we need System 2 to tell us to set up a routine like drinking coffee, singing, and rolling the windows down on a long drive. Although unromantic, years of deliberations by engineers have taken our “skill” of slamming on the brakes in dangerous situations and created a much safer (machine-driven) stopping method: ABS. Neither our legs nor our brains can jam the brakes on and off fifteen times per second. We’re safer now on slick pavement because of System 2; i.e., what the engineers built and tested over a long period of time.

Too often, we hop into our PPC accounts with an excess dependence on an all-too-human System 1, like we’re some spreadsheet-enabled Tarzan swinging on a vine.

Neither being busy, nor being “really good at this stuff,” should be an excuse for completely ignoring the need to incorporate deliberative, “slow-thought” protocols into your campaign management methodology. The fact that it feels “right” to nervously tweak incremental details of accounts during the “fast season” doesn’t make that activity particularly effective. It doesn’t mean you’re off the hook in terms of System 2.

Now that we’re hitting the summer months, you may be relieved to have a little breathing room to work on more methodical, “important but not urgent” initiatives. Indeed, if you put in the time now, things might feel less frantic come fall. Not only that, but System 2 is great at building systems, protocols, and machines… not just operating them with a twitchy trigger finger. Systems, protocols, and machines are what will make you the real money. How are you going to build something new or better that scales, that relies less on your raw animal (or even advanced cognitive) abilities?

Here are some to-do’s to consider:

  • Set up new remarketing audiences and come up with new image ad creative. If you have a PPC account with little or no remarketing set up, you need to do this yesterday. The same goes for replacing outmoded remarketing code with “new” remarketing code, such as Google’s Universal Remarketing Tag. Remember that a remarketing audience must be cookied as such; your audience size starts at zero. Get that code installed on the website! Start now! If you’ve already started remarketing, work on thinking it throug more thoroughly, with custom combinations that include cart abandoners, a “don’t show any ads for the first three days” setting, etc., as seems appropriate to your custom needs. Or contact your Google rep for more information on Dynamic Remarketing, if you retail a large number of products. Finally, think through what story you want to tell, or what brand image you want to portray, with your image ads. You’ll be serving tens of millions of impressions, typically. What do you want people to see (over, and over, and over)?
  • Build simple or complex bid rules and figure out how often you’ll run them. Along with the more obvious account-wide sweeps you might do to look for anomalies or opportunities, you can also try less comprehensive, non-obvious ways of building filters and bid rules to create bespoke outcomes. For example, filter for match type and bid down on a match type you feel has been grabbing too much impression share away from better match types. Or run an account-wide match type performance report using a third-party tool like Optmyzr. That can be a nice way to inject your creativity and your “rock star powers” into the equation. But it is System 2 thinking because you’re slowing down and taking stock of how the account functions, instead of merely reacting to little pieces of data like Miguel Cabrera diving out of the way of a brushback pitch.

brushback pitch

  • Review long-running ad tests with insight into why they were set up that way in the first place. Don’t just stab the pause button at lower performers, and don’t end tests that are too close together in performance yet to be statistically distinct. Take some time to recall what principles went into the tests, and if you draw any conclusions, take time to communicate those with someone – preferably in writing. To take an example, a client in the office furniture business has several internal landing pages that are underperforming the home page in terms of ROI on PPC. Had we followed only best practices, we’d have stuck rigidly to the notion that the keyword should take us to the focused landing page, and that is that. We now have more insight into the workings of the site as it relates to different product lines. Testing is about the spirit of inquiry, which requires continuity and planning. It’s not nearly as effective when it’s only about stabbing a pause button.
  • Deliberately incorporate teamwork; don’t be a lone wolf. Successful testing, and successful companies, require a culture of acceptable debate and disagreement, as shown by Jim Collins in “Good to Great” – Collins calls it “confronting the brutal facts.” Testing isn’t about consensus, it’s about learning and iterating. As Seth Godin pointed out in “Survival Is Not Enough,” you need to think about how to involve various perspectives in your decision-making so that there is a robust mDNA (meme DNA) in your operations. Godin insightfully argues that in terms of evolving to meet new industry challenges, “competence” can be a company’s worst enemy, as it gets stuck on a routinized “winning strategy.” To shake things up when seeking input, consider a shortcut: informally “crowdsourcing” within your own company (assuming you’ve encouraged diversity in your company) – use an anonymous process if that helps. Be supportive of “weird” ideas, as long as they’re not the only ideas people suggest.
  • Get high-powered tools working for you. Above, say, $500,000 in annual ecommerce revenues, do you really have any excuse not to put a program of A/B testing in place for key landing pages? And for a busy home page driving $2 million or more, is there any excuse not to seek out an advanced multivariate testing tool to see if you can’t create a lift of 15-20% in conversions from visitors landing there? Simple math: 15% X $2 million = $300,000/yr. in increased revenues. For that kind of money, it’s pretty obvious what you should do: push away from the desk so you can’t tweak those same keyword bids 50 more times, or add another 700 negative keywords to a campaign. Get the right tools and team together and set that goal to generate that 15% lift in conversion from that page.

Cognitive scientists like Kahneman and his colleagues often employ a simple word to describe our tendency to over-rely on System 1 (reactive/heuristic thought), and to avoid too much engagement with the more mentally taxing System 2: “lazy.” It seems we’re hard-wired to conserve mental energy. Reacting does not wear us out as much as stepping back and planning. But of course a day spent reacting will be a day where we eventually make many mistakes as we fatigue, even if we’re “smart” or “sharp.”

So, plan we must. And some of that planning needs to create the kind of consistency that appears to take “us” out of the equation. By taking steps to remove your System 1 self out of the equation more often, and using your System 2 self to do so, arguably, it’s a higher-order “you” that’s involved. “Smart” or “sharp” needs to give way to “rational” when dealing with large, complex systems. It is rocket science.

To profit in the midst of modern, complex systems, our natural aversion to System 2 thinking (it’s just so taxing) is something we need to combat. System 1 was great for prehistoric man running from a hungry predator, and remains an advantage in the sport of dodgeball. But it’s terrible for sitting at a desk and correctly intuiting statistical confidence in an ad test.

Schedule an appropriate amount of time in your schedule for System 2 thinking. There’s no time like the present!

An earlier version of this column ran at ClickZ on Nov. 30, 2012. Reprinted by permission.

 


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