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Context is King…or at least Duke

My latest column on Search Engine Land, if you missed it over there:

Enhanced Campaigns are the most important architectural change to Google AdWords since it moved from the right rail to take the place of “premium placements” in 2004. Much of the early commentary has focused on the version 1.0 implementation. It is important for Enterprise SEM program managers to start thinking hard and deep about the implications of Enhanced Campaigns in the long term as well, understanding what it is likely to become.

Better architecture to handle more complexity is not simplification

Google has mistakenly framed this as simplifying targeting. In fact, it’s just a different mechanism to accomplish the same goal. In the past, if you wanted to have different bids, different landing pages, and different ad copy based on device type you had to create replicated campaigns. Now, you just need one campaign, but you STILL have to provide all the same targeting information to Google with respect to what copy goes with what device, which URL to use, etc.

The problem with the old structure was that the number of replicated campaigns required to target by device, geography, syndication preference, etc compounded geometrically. This was awkward from a management perspective, and likely caused inefficiencies in Google’s auction algorithms as well. The single campaign with multiple levers approach is cleaner in that sense, but no less complex to do well.

As I described earlier, this change will actually add to the complexity of bidding in that instead of setting a bid for an ad that is associated with a keyword, match type and context, you have to set a bid for a keyword and then set multiplication factors for each different context.

This may make it simpler for the SMB willing to give Google their bank routing number and freedom to serve ads as Google sees fit, but I don’t see any Enterprise advertisers choosing that route. Two levers instead of one adds to the complexity of bidding.

It is all about context

Larry Kim has it right, it’s all about context. Many folks are upset with Google because the distinction between traditional computing devices (desktop and laptop) and tablets is gone in Enhanced Campaigns v 1.0. That is an error on Google’s part, and I’ll bet they fix it pretty soon. Google’s research shows that the behavior of people using tablets in the context of being at home in the evening is indistinguishable from their use of computers in that context. Google has more data on this than anyone (possibly the understatement of the year) so I don’t doubt that’s right. But this is just hinting at the real future of enhanced campaigns.

The controls in v 1.0 are rudimentary (geo, device, time of day/day of week). But let’s think about the future controls and all the amazing insights Google has about users that could be subject to targeting.

From your online behavior Google knows:

    • your demographic profile,
    • what you do and say socially,
    • what websites you like and/or frequent,
    • your religion,
    • whether you transact business online or prefer to do business in brick and mortar locations,
    • what you’ve searched for ever, what you’ve searched for recently,
    • whether you’re just researching or seriously comparing products/services and offers,
    • what type of device you’re using,
    • the size of the screen,
    • the connection speed

the list goes on and on…

Now let’s add to that what Google knows from your device gps, its own knowledge of geography, and your login to Google services:

  • where you live,
  • where you work,
  • how you commute,
  • how fast you drive,
  • where and when you go to lunch,
  • whether you’re walking or riding in a car or riding a subway.
  • They may be able to tell whether you’re sitting or standing.
  • They could probably know who’s cheating on their spouse (look for two devices that are usually together at the same residential address…look for one of those devices spending the night at a different residential address when the other device is out of town at a hotel….)

…it is truly mind-boggling!

Campaign replication simply could not keep pace with this. The architecture had to change.

You can bet your life that some or all of these contextual cues will impact the type of ad that will resonate most with that user at that moment, and how each potential advertiser should value that ad impression.

Used in the context of display advertising, this kind of information can be horribly creepy and bad. “Looking for a divorce attorney? You should be!” However, there is no creep factor with search ads. Not only do we understand a great deal about this user in this moment, we also know that they’re interested in seeing what we have to offer right now. The act of searching creates a “permission marketing” experience that makes ads relevant and useful in a way that no other type of advertising since the print yellow pages can offer.

How will we know what ads to serve and what bids make sense in different contexts? Google will have to give us contextual information about each user who interacts with our ads. This will be done by passing a click id that can be used as a key to pull context from Google. That in turn will allow us to see which contextual elements and combinations of elements impact post click performance. It will allow us to test different creative and landing page experiences so that we may learn what works best in a given context.

Keywords will remain king. I wager that we will all find out that the words used in the search are the most important predictor of value to an advertiser, but it would be crazy to think that those other contextual factors won’t be important as well. If context isn’t King, it will certainly be Duke.

Google isn’t sharing this data with anyone yet, and they won’t be willing or able to share everything they know about every user for privacy reasons. However, advanced advertisers should be furiously working on how they will gather and process the information Google passes and how they will react to it. The mechanics of what we do will have to change, but there are fundamentally new and exciting possibilities that smart marketers should start grappling with now.

Comments
5 Responses to “Context is King…or at least Duke”
  1. Abi G says:

    Thanks for the post George. I’m curious what RKG predicts will happen to the search landscape as Enterprise and SMBs transition their campaigns to enhanced. My assumption is that the majority of enterprise accounts will proactively update their enhanced mobile bid modifiers to correspond with their legacy mobile bids while many SMBs may not put in the effort and keep their mobile bids the same as their desktop/tablet bids (at least for a few days/weeks until they optimize their bids). Do you predict that advertisers will see big fluctuations in desktop/tablet and mobile CPCs over the next 6 months, 9 months, 12 months, etc? Or do you believe that advertisers, especially SMBs, will balance the landscape more quickly than i assume? My fear is that day to day CPCs and ave ad position will be very inconsistent as we get closer to national Enhanced Day . . . or maybe i’m just overreacting.

  2. Super question, Abi.

    Before I begin speculating let me start off with: “I don’t know what to expect”. With that understood…

    The right way to think about this (I think) is less enterprise vs SMBs and more “sophisticated advertisers and agencies” vs “not very sophisticated advertisers and agencies.” There may be some correlation between size and sophistication, but it’s a great deal less than one might imagine in our experience. I do think the less sophisticated folks might end up either not using the sliders, or not using them wisely. However, many of those same folks are already not differentiating between mobile contexts and static contexts and given the lower online conversion rates of mobile devices folks bidding to “average” efficiency are lowering bids overall depressing desktop bids and CPCs as well. We have heard that very few folks are handling the replicated campaign approach well, and that may be part of what drives Google’s actions.

    We could see mobile bids/cpcs drop and static bids rise because targeting is “easier” in the new system; we could see the reverse if more folks find their old methods not applicable and have a hard time adjusting to the new bidding.

    The change might also encourage more folks to throw in the towel and just let Google set the bids through Conversion optimizer. We say: “Never give up, never surrender!”

  3. Abi Goettsch says:

    Thanks George, the sophisticated vs non-sophisticated advertiser/agency reference definitely makes more sense. It will be interesting to see what happens once all advertisers are transitioned to Enhanced v 1.0. Until then . . . not surrendering.

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