Damn You Google
Data-Driven Marketing and Growth Insights (9/30/2024)
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Last email, we hit you with some pretty great news.
Today, not so much.
Yeah, it’s a plot twist nobody asked for.
In the last month, the marketing businesses community has been ranting against Google consolidating VAC with Demand Gen.
So, while platforms like Meta are improving their systems to help businesses understand where incremental conversions are coming from, Google has been moving in the opposite direction—something they’ve become rather good at over the years, I must say.
A Bit of Context:
It all goes back to 2021.
Google launched PMax, an automated campaign – the most opaque program they have ever released…
PMax has some benefits. It can help you find broad-based keywords that you might not have targeted otherwise but wraps bad ad inventory with good inventory and over-optimizes at the bottom-of-the-funnel – of course, to appear that it’s driving more lift and higher returns than it actually does.
This made it more difficult for SMB and mid-market companies looking to drive performance because PMax is a black box that you can’t even optimize. You just give it some signals, put images and videos in it, and hope it performs.
Keeping with their horrendous and short-term business moves, they are also consolidating Demand Gen campaigns.
Like PMax, this campaign takes all its worst ad inventory and combines it with its best. In a way, it’s taking gold and trash and hoping that if you combine them, it’s still gold.
The Present:
Next year, Google will phase out Video Action Campaigns (VAC) and funnel advertisers into Demand Gen campaigns for conversion-focused video ads. So once again, we’ll be forced into a “black box” setup, making it even harder to figure out what ads are actually performing well and converting best.
As we can see…
Google is moving even further away from advertisers having granular control and instead being forced to rely on – and trust – Google’s algorithms to manage things.
Essentially, they are undermining marketers’ and businesses’ ability to deliver cost-effective, profitable outcomes and offering less optimization to drive incremental sales.
As I said, this will be incredibly detrimental to SMB and mid-market companies looking to drive performance over general brand awareness. It will push more advertisers away from the platform and lower total spend as uncertainty increases and more complex measurement testing is required.
You would think they would be more intelligent than this, yet they keep pushing their accounts in that direction.
It’s a textbook move: boost short-term profits now but degrade ad product and lower everyone’s incremental impact in the long run.
Next Steps:
The horizon isn’t exactly glowing with promise right now.
However, we do a few things at SeedX to face this head-on and keep our clients moving forward.
We have been testing PMax for quite some time and will continue to test Demand Generation merger.
A few notes…
We’ve noticed that PMax over-optimizes for specific keywords and placements. While it can help discover new keywords you wouldn’t usually bid on, you’ll want to take those and scale them outside of PMax to make the most of them. We continue to utilize manual campaigns for our highest manual keywords and exclude those from PMax. In this way, PMax can be used effectively as a “broad” campaign.
Also, if you’ve many addressable keywords (100s), running PMax based on specific products or audience segments is a good idea. Historically, the best advice from Google is to have it in one campaign with several asset groups. However, we have discovered that PMax will over-optimize for just one group of keywords. Splitting up the keyword groups allows Pmax to focus on broad while still scaling multiple targeted keywords.
As we test the new Demand Generation campaign, we will release new findings.
