If you monitor results closely as we do, you may have noticed a decline in the performance of Google's Broad Match over the last 5 months or so. We're having to lower bids on broad-matched keywords that used to work well.
We assumed that Google was simply playing with "the dials" again balancing their revenue against ad quality, but just recently we found what we think is actually a bug in Google's system. We pointed out a behavior to them that they had assured us didn't exist, and when confronted with the evidence they said "we certainly didn't intend for it to work that way."
Let's start from the beginning:
Broad match, which became "Advanced match" a few years back, can be enormously helpful. We hear that in any given month something like 25% of user searches are unique -- never-seen before. Anyone who searches through log files to compare user searches to the advertised phrase has seen this kind of thing: "I want to buy a widget, preferably red, but I don't know where to find one". As methodical and obsessive as we are about keyword creation, we probably don't have that one. People type in all kinds of crazy permutations on makes, model numbers, skus with and without a color preference with/without spaces, with/without typos that make a perfectly comprehensive list impossible.
We know that the broad matched traffic doesn't convert as well as traffic that exactly matches the ad phrase, but creating separate broad match and exact match versions of keywords and advanced atomic bidding allow us to capture the best of both worlds.
However, the truly troubling behavior of broad match that we've seen recently occurs when a broad matched ad is served instead of an exact matched ad in your own account. We understand that for the crazy user search above, Google might choose to serve either our broad matched ad Keyword = "widget", or our broad matched ad Keyword = "Red Widget". We understand that Google will probably serve the one of those two ads that makes them the most money (CPC * CTR).
What we didn't like was that sometimes a person searching for "Red Widget" would be served a "Widget" ad, when we have a perfectly good "Red Widget" ad ready to go. The Red Widget ad is more relevant, has a better landing page and will provide a better user experience than the "Widget" ad. We feared that broad matched ads in effect competed with each other, with the highest bid * CTR winning out over dead-on matches.
Google assured us that this self-competition did not exist. They told us that if you have a keyword in the account that exactly matches the user search only that ad and its bid will be taken into account, and broad matched variants will not be served even if they have higher bids. They said there are a few rare cases involving ads for the same keywords in different campaigns where there could be glitches, but that in almost every case they've investigated the situation only occurred when the exact matched ad had been halted by campaign budgets.
That got us thinking...
If self-competition does happen when the keyword that matches exactly is off because of budgets, does that also mean that keywords that are paused are also subject to such cannibalism by other broad matched ads? Say for example that you used to carry "steel widgets" but you no longer do. Simply pausing the keyword will result in people who were served the "steel widgets" ad, now being served the "widgets" ad, or the "blue widgets" ad, or the "wooden widgets" ad -- whichever makes Google the most money. You wanted to eliminate the traffic, but instead, you've shifted the traffic over to other keywords which are potentially less targeted and more expensive!
We asked Google's "Product Management" team for broad match and they confirmed that pausing ads in the account does, in effect, make those phrases available for broad matching to other ads. Google said that if an ad isn't active, then the broad match algorithm ignores it and seeks to make the best match it can.
That got us thinking...
What if an ad is not paused, but simply not bid high enough to be "active" -- did that effectively blind Broad match to the existence of the ad and allow this self-competition/cannibalization? We could deal with the "pause" problem by simply bidding a penny on ads we'd rather pause, unless bidding too little was effectively the same as pausing.
Google agreed that that used to be the behavior "However," they said "that's no longer a problem because we've done away with the notion of minimum bids!"
That got us thinking:
"Hey guys, what we think happened is this: Google did away with minimum bids to be active but replaced that concept with a minimum bid to be on the first page. We think what happened is that as of August/September, if an ad falls below the minimum first page bid it becomes "inactive" for search in broad match and other ads that do meet that minimum are shown in its place."
Google was silent for a minute and then said: "That shouldn't be the case. That isn't supposed to be how it works. Can you prove that that's what's happening?"
We could, and did.
What happens is this: Keyword "Widget" performs only so-so. Doesn't matter whether it's on broad match or exact match or if you have two versions. The competitive landscape is such that others can afford to spend more -- or can't but position bidding systems force them to overspend. "Widget" drops off the first page and immediately your "Blue Widget" ad (broad matched) starts showing since it converts better and has a higher bid than "Widget". The poor traffic that used to go to "Widget" now effectively contaminates the data for "Blue widget". Indeed, the traffic that converted poorly when dropped on the "widget" page will convert even worse when it lands on the "blue widget" page instead. The "blue widget" ad is bid down the page until it drops off the page, when your "Red Widget" ad starts firing...and so on. A cascade failure of broad matched performance because your targeted ads start competing with each other over the lousy traffic that you can't afford to spend money on.
What we saw as a result of this apparently inadvertent change in Google's logic in August was keywords that used to work fine on broad match no longer worked at all. We had to drop bids because of this which reduced Google's ad revenue and some of our clients' sales as well.
Using poor performing keywords as exact match negatives across all campaigns is one strategy to deal with this, but does "poor performing" mean any keyword that drops off the first page?!? The bidding landscape is so dynamic that what was off the first page yesterday might be back on today -- do we really need to add and delete exact match negatives based on this kind of fluctuation?!? It really makes it impossible to manage broad match intelligently. We lose the good stuff along with the traffic we don't want.
Bad for advertisers, bad for users, bad for Google.
We're very encouraged that Google sees this as a problem, too. Google is not evil. Indeed, Google is better behaved than any company in history that has as much power as it does. However, Google is bifurcated. There is a strong contingent of engineers and account reps who want to provide the best possible experience to their users, and the most control possible to advertisers to manage their advertising spend as effectively as they can. There is another contingent within Google who, like any for-profit business, wants to make as much money as possible. Sometimes these groups are at tension with each other.
We believe that improving the broad-match controls available to advertisers will benefit all parties concerned. We made a number of suggestions to the product managers -- I'll detail these in another post -- and those were very well received. Many folks at Google have the right instincts on these issues. We just hope they prevail in the internal debates to come.
I don't know whether Google will tell us if they find that we're right. I also don't know if they'll fix the problem -- we suggested that they simply prevent broad match from competing with any keyword in the account, regardless of bid, paused or not paused. That would represent a pretty big change, and they may have concerns about the impact on their bottom line.
Hopefully, they'll fix the problem and let us know when they've done so. When that happens broad match should work better for all of us.
We'll let you know if we hear more!