Should we convert now and get it over with? Should we run a few tests with our smaller, simpler accounts? Should we abandon tightly-crafted, geo-segmented campaigns in favor of the new geo-bidding options within Enhanced Campaigns?

Or, do we wait? Do we keep reading articles like this one, hoping to find guidance, when what we really want to find is some secret AdWords hack that lets us keep targeting tablets and bidding on mobile keywords like we’ve always done? That’s hoping against hope, of course, because it is very clear that Google is taking us all on a one-way trip to the Enhanced Campaign (EC) Universe in July.

My Advice On Enhanced Campaigns: Wait

A few weeks ago, down at Hero CONF in Austin, TX, I suggested that all PPC managers should all wait until midnight on July 21st before cutting over to ECs as a form of protest. It’s the same sort of feckless protest I make once a year by placing my tax return in the post office mailbox just before the stroke of midnight on April 15th.

I was only half-joking about the EC protest movement; but, I am one hundred percent serious with my recommendation that we all wait as long as possible before doing our EC conversions. Why? Two reasons.

First, the engineering work is not done yet. Google effectively acknowledged this by pushing back the conversion deadline date by one month (so far) and announcing one major platform change (so far) to the way mobile device bidding works.

Perhaps we were supposed to receive the relaxed deadline and ad group mobile bid function as great news, but we didn’t. Great news would have been rolling the bidding feature back to the keyword level, where it has lived for the last decade.

Setting mobile bids at the campaign level as a percentage of desktop bids was one of the most hare-brained ideas ever to come out of the AdWords engineering group. With so many brilliant features coming out of the AdWords development team day in and day out, how did a feature like this ever see the light of day in the first place?

Who knows what other changes Google will announce in the lead up to July 22nd? Will they relent on the restriction from bidding on mobile devices only? If Google continues to be unpredictable about rolling out and rolling back platform changes, then the only sensible thing for us to do is wait and give them more time to figure things out. Otherwise, we risk having to undo the restructuring we’ve already done when they change their minds once again.

I asked Paul Feng, Google’s Product Manager, given the enormity of the project, why the hurried deadlines? His answer was very reasonable from a corporate point of view.

According to Feng, it would be very difficult to develop a new AdWords platform while also maintaining the existing one. Managing two parallel development efforts, one to sustain AdWords and one to rebuild AdWords from the ground up, would be difficult, time-consuming and very costly to Google. So, they calculated that the lesser of the two development evils was to get the new AdWords up and running as quickly as possible and to move as rapidly as possible to abandon the existing one.

Google was aware that this approach was going to be controversial and disruptive to advertisers in the short term, and this was part of their calculus. That would explain their big PR push to sell the idea when it was first announced in February. The decision to move quickly, he suggested, was analogous to taking off a band-aid. You can try to peel it off slowly and minimize the pain, or you can rip it off quickly and get it over with.

Fair enough. However, rebuilding AdWords in situ can’t be much less of a technical challenge or less risky. With only one development path, any misstep by the development team doesn’t just impact Google’s development schedule, it impacts every advertiser and third-party tool vendor in the world.

A separate development path might have been more costly and time-consuming for Google, but that’s nothing compared to the business disruptions and associated costs borne by us advertisers to restructure accounts and develop new bid and targeting tactics — and by third-party tool vendors scrambling to rewrite code — against the moving target of Enhanced Campaigns.

I am willing to bet that for every $1 Google has spent on EC development, advertisers and vendors are spending at least $100K-$500K in aggregate.

But I digress from my point. The point is that Google will do what Google will do when Google decides to do it; and so, it’s a good idea to wait to let Enhanced Campaigns mature, if even for just another month or two.

The second reason I recommend waiting to convert is that Enhanced Campaigns are sure to change the economics of advertising on Google.

There’s been plenty already written about this topic in the trade press; but, the reality is that Google’s decisions to get rid of device targeting options and downgrade mobile device bidding options will negatively impact — or completely wipe out — the feasibility of advertising on Google’s networks for advertisers who rely on targeting of specific mobile devices, networks and O/S, or vastly different tablet device bids.

For advertisers who rely on the ability to target mobile devices, networks and O/S, or need to bid tablets differently, Enhanced Campaigns will diminish or completely wipe out the advantage of advertising on Google. For these advertisers, the waiting game is also the end game. They’ll keep their campaigns online until Google does its automatic rollover to ECs, and then, they’ll turn them off and find new places to invest their advertising budget.

Google appears willing to write off that set of advertisers. Their bet is that Enhanced Campaigns are in the best long-term interest of their shareholders. From stock movements, it appears true, and investors apparently agree, if you take a look at this simple timeline I put together.

Investors seem hot on what Enhanced Campaigns will do for Google’s bottom line. Many advertisers are hot about, too, about what Enhanced Campaigns will do to their bottom line.

What Do We Know About Enhanced Campaigns So Far?

At this point, I have only converted a few select client campaigns over to enhanced campaigns. These were B2B industrial accounts with no fancy geo-targeting and no significant reliance on mobile or tablet traffic.

The conversion went quickly and smoothly because no merging was needed. All I did was convert them over and set the mobile bid multiplier to -100% and implement ad group level site links. Some campaigns were running with CPC, and some were running CPA bidding. We kept these options in place to see if rolling over to ECs would cause any problems for the automatic CPA bidding algorithms, and we were prepared to reset to CPC if so.

Here’s what we’ve observed so far, after four weeks of post-conversion data:

1. The CPA algorithms seemed to handle the conversion without incident.
2. We are now getting 4-5% of our clicks from tablets, which we know for these clients have a conversion rate close to zero. We estimate that tablet clicks have increased our ad spend by 2-3% non-productively.
3. Ad group level site links have had a positive impact on click-through rate and have increased traffic and conversions, essentially offsetting the 2-3% “surcharge” from tablet clicks.

So, for this small set of clients, for whom we were expecting no significant change with Enhanced Campaigns, we are actually quite relieved that account performance did not suffer and will take performance neutral as a win. We are not as optimistic about some of our other accounts where tablet traffic is more significant and has different conversion characteristics than desktops.

While You Wait, Spend More Time On Bing

I wonder how much of Google’s strategic consideration in rushing Enhanced Campaigns to market was to force advertisers to spend more of their working hours on AdWords issues for the next few months. After all, every hour spent having to keep up with Google’s changes is an hour that can’t be spent on Bing Ads.

I’m not a big one on conspiracy theories, but I get the sneaking suspicion that Google engineers purposely designed some of the wacky Enhanced Campaigns features specifically to slow down Microsoft’s engineering teams in their quest for total compatibility between Bing Ads and AdWords.

In case you missed it, Microsoft has been working fast and furiously to make it easy as pie for AdWords advertisers to port to Bing Ads, where by just about everybody’s estimates, CPAs are, and always have been, more favorable than on AdWords.

My advice to all advertisers is to take a fresh look at Bing Ads, and dedicate more of your time and your ad spend to optimize for Bing and Yahoo paid search traffic. If you are not getting between 20-25% of your traffic and conversions from Bing, there is a good chance you have plenty of opportunity there. And, since CPAs on Bing Ads have always been lower than on Google, you should absolutely consider optimizing your Bing Ad spend before you chase more traffic on Google.

And, of course, you can continue to target devices, bid on mobile keywords directly, etc., over the features that Google’s Enhanced Campaign simplification efforts have either complicated or eliminated.

Conclusion

As I said earlier, Google’s going to do what it wants to do, and while it is a fact of life that we all have to pay attention and make the appropriate changes to our accounts, we can also look at other options for our advertising investments.

Next month at SMX Advanced, we’ll be taking a more in depth look at how Enhanced Campaigns are performing, and we have an entire panel devoted to new best practices. Brad Geddes, Jeff Allen, Kevin Lee and Ben Vigneron will share their data, experiences, and new, evolving best practices for managing enhanced campaigns. If you haven’t already registered, do it soon. SMX Advanced is nearly sold out as of this column’s date.

Next month, I’ll start a multi-part series on optimizing for Bing Ads, where we’ll look at all the issues of creating, managing and optimizing your ad spend to get the most from Yahoo and Bing search networks.

The context of George’s remarks was setting expectations with client C-Level executives and educating them about what is and what is not possible with online marketing campaigns.

Maximizing PPC ad spend and managing to best ROI are usually conflicting goals.

ROI Targeting Differs From Budget Targeting

The reason these two goals are generally incompatible is that ROI targeting takes the dynamics of the auction into account and lets the ROI dictate the amount of ad spend. Spend rises and falls based on your ability to deliver profitable results. When you are told you must spend to a specific budget, your budget actually influences the dynamics of the auction and your ability to optimize CPAs.

For example, if you are given an extra $100K and told to spend it this month, you only have a few options available to you in the short term. You can increase bids to get more traffic from higher positioning; but, you’ll pay more for that traffic. You can also allow more budget to flow to your marginal campaigns, which also degrades your ROI.

If on the other hand, your budget is constrained, then you are forced to make decisions like advertising only on your brand terms, slowing down the pace of your ad serving by using standard ad delivery, or simply letting your campaigns run out of money before the end of the month, allowing your competitors to reap the benefits of your dropping out of the auction.

I think that most SEM pros and corporate CEOs would agree that managing PPC campaigns to ROI targets with unconstrained budgets is the ideal budgeting scenario. Common sense seems to suggest that if your paid search campaigns are improving both revenues and profits, you would want to spend as much as you can to keep the good times rolling.

Unfortunately, the reality (and unreality) of corporate accounting and planning structures often dictates that short-term budget targets are cast-in-concrete and to be met at all costs, regardless of business results. In this environment, missing your budget either by under-spending or over-spending is an undesirable outcome, and draws unwanted (and often unwarranted) attention to your campaign management prowess.

So, unless you are one of the lucky PPC managers with unlimited budget as long as you hit ROI targets, or you have the bravado to ignore budgets to prove your management machismo, your best bet is to come in right on the mark.

Staying Within Range Of Your Target Budget

I generally worry about three things when it comes to managing monthly budget targets: (1) going over budget, (2) getting too far under budget and (3) Blowing through our budget before the end of the month. Of these worries, preventing over-spend is probably the easiest problem to avoid.

Preventing Over-Spend

If we are severely budget-limited, taking the campaigns offline when the budget is exhausted is the certainly the easiest option. I don’t prefer doing this because it seems so contrary to common business sense.

However, I have also found that nothing is more motivating to clients than the thought of their competitors gaining advantage by having the search results pages all to themselves! So, sometimes this option works well to free up more funding for paid search.

Going Over Budget

To prevent campaigns from going over budget, the first line of defense is to use the budget settings within Google AdWords and Microsoft Bing Ads.

Bing Ads: Bing Ads allows you to set monthly or daily budgets for your campaigns. If you choose to set monthly budgets, Bing Ads will show your ads whenever they qualify for an auction and then pause them when your monthly budget is exhausted. Alternatively, you can also use Bing Ad’s daily budgeting feature to spread your ad spend across the entire month.

For example, if your monthly budget is $3,000 for a month with 30 days, setting your daily budget to $100 will ensure that your ads show every day. With daily budgeting, you can also set the ad delivery to either standard or accelerated pacing. Standard delivery means Bing will pace the delivery of your ads so that they show throughout the day based on your budget. Accelerated delivery means your ads will show in all eligible auctions until your daily budget runs out.

Google Ad Words: In AdWords, you can’t set a monthly budget directly. Instead, Google calculates an effective monthly budget based on your daily budget setting. AdWords multiplies your daily budget by 30.4 (the average number of days in a month) and uses that value as your monthly maximum spend.

During the month, your AdWords spend may vary, exceeding the daily limit by as much as 20%; but at the end of the month, your budget will not exceed your target ad spend. So, for example, if your daily budget is $100 per day, then your total monthly maximum spend will not exceed $3040. You can also share a budget across some or all of your campaigns to ensure your whole account stays within limits.

Under Spending

Under spending budget is also one of my budgeting worries, and it is a tough one to manage if you get behind. Under spending can happen for a number of reasons: inattention to campaigns, ads that have been suddenly disapproved, another big competitor has entered your space and is eating into your search click volume, or your client suddenly decides they need to dump a lot more funding into your campaigns in the middle of the month.

In big corporations, this tends to happen at the end of fiscal quarters or the end of fiscal years. While no one ever likes to turn down additional budget, dealing with a huge budget bump can be very tricky in the short term.

Tracking Daily Spend

When hitting budget numbers becomes an overriding requirement, it is important to keep a very close eye where we are relative to the target monthly spend and make bid and budget adjustments daily. The challenge is knowing how big or small the adjustments should be, because every day of the week has its own traffic and ad spending profile that needs to be taken into account.

For this reason, we like to take day-of-week spending patterns into account when making adjustments.

PPC Ad Spend Weighted by Day of Week helps inform bid and budget decisions.

The above chart shows two curves. The orange curve shows the average daily spend we need to achieve in order to reach our month end target, somewhere around $325 per day. The second curve, the blue one, shows a spending plan weighted by day of week based on our typical intra-weekly spend patterns.

We developed the curve below simply by taking the daily profile of the last five or six weeks of ad performance, and weighting the ad spend based on how individual days of the week perform as percentage of the entire week’s ad spend. As you see, there is a big difference between Sunday and Monday average ad spending:

Each day of the week has its own ad spend profile.

Using a weighted average can make a big difference in the adjustments you make to your bid and budget allocations day-by-day compared with using a straight line average. For example, when your month begins on a Thursday, and you come in on Monday morning, you’ll see that your daily ad spend might look like this:

Daily PPC Spend plans – weighted versus straight line average.

If you are comparing your actual ad spend against the orange straight-line average target spend curve, you may be  inclined to make a much bigger set of adjustments than if you were comparing things to the weighted average. The weighted average curve looks very similar to your actual ad spend, so you would probably make smaller adjustments.

When we work from a weighted average in managing closely to monthly budgets, we find we are less likely to make yo-yo adjustments – too aggressive one day, and too aggressive in the opposite direction the next.

In general, it is always preferable to work to ROI targets and allow ad spend to drift up and down as market efficiencies dictate. However, if you are required to also keep close to your budget targets, it’s a good idea to keep track of where you are relative to your strict monthly budget goals on a daily basis.

You can build a simple model in Excel to help you track more closely to monthly targets that lets you take day-of-week ad spend fluctuations, and which lets you take holidays and other known events into account. If you’d like a copy of the spreadsheet I’ve used to create the examples shown here, click on the email link below to send me a note, and I’ll be glad to shoot it across to you.

At the heart of Einstein’s FIELD theories, which describe space-time, was his famous formula:

Okay, maybe you’ve never seen that before, but it is famous among theoretical physicists and cosmologists. The lambda, (Λ) is the cosmological constant, which we’ll touch on later in this article. Einstein’s most famous formula is, of course, E = mc2 which describes the conversion of mass to energy, as in that which happens in an atomic explosion.

It took the world of physics years to figure out what Einstein was even talking about, and then even more years for experts to work out whether he was right or wrong. As it turns out, Einstein was more right than wrong.

Google’s Grand Unification Theory Of Devices

In similar fashion, Google turned the world of paid search on its head last month when it unveiled Enhanced Campaigns, which I refer to as their Grand Unification Theory of Devices. Google’s stated purpose in pursuing the Grand Unification Theory is to create a new advertising universe where paid search campaigns are elegant and simplified, and where we can target all devices, bids, time and space from within a single campaign.

This theoretically perfect PPC universe is still young and unproven, but that has not stopped Google from creating it and implementing it before the end of the next fiscal quarter. Of course, they can do that; they’re Google. While Sir Isaac Newton and Dr. Albert Einstein had to content themselves with just describing the world around them, Google can change the way the PPC universe actually works.

Just as Einstein created his elegant equations to describe the grand workings of the cosmos, I thought it would be interesting to take a quick peek into some of the fundamental assumptions that Google must make in order for an Enhanced Campaigns universe to make sense, and express them as simple mathematical formulas.

This new universe operates differently than our current “Legacy” world, and I hope my math logic will help your understanding of what’s fundamentally changed. Making things simple isn’t always so simple, after all.

The Law Of Approximate Device Equivalence (LOAD)

To achieve simplicity and elegance in its new Enhanced campaigns, the first thing Google needed to do was get rid of all that pesky nonsense about campaign ROI performance being different on tablets than on desktop devices. Rubbish. How can anyone create simple campaigns if devices all perform differently?

Unless and until device performance could be proven to be equivalent, it would not be possible. This led to the necessity of inventing a new Law to describe device behavior in the new Enhanced Campaigns Universe, which I’ve named the big new Law of Approximate Device Equivalence, or I prefer to call it, the big LOAD.

Here is my equation that describes it:

According to the big LOAD equation, where rho (ρ), represents advertising performance, and ρ(t) represents performance of Tablets, and ρ(d) represents the performance of Desktop campaigns, Google has simplified the way things work by declaring that desktop and tablet advertising performance are equivalent, or at least close enough so that we need not concern ourselves with optimizing for them anymore.

Now, perhaps you are not a ‘math’ person, but you, as well as many advertisers, doubt that this can possibly be true. Perhaps you “just know” that tablets will perform differently than desktops. You see it for yourself in your everyday life. You see how tablets are replacing favorite magazines as something to browse through as you sit and watch the tele or enjoy a cocktail with your significant other. In the morning, whether traveling or at home, you see how tablets are starting to push newspapers off the breakfast table, and you ‘just know’ this can’t be true.

Or, maybe you are a data person, and claim to have “actual data” that confirms your suspicion about the veracity of Google’s big LOAD. Don’t fret, you are not alone. Even Google has data like this, and publishes it on its website like this:

Google’s own data shows significantly different usage profiles between Tablets and Desktops.

Hmmm, you ask. Shouldn’t Google use its own data to challenge a fundamental assumption of Enhanced Campaigns? Well, let me ask you something. When was the last time you tried to create an online ad system? What? Never? Then don’t question the wisdom of someone who has. And, besides, the big LOAD equation does not work in a Legacy Campaign world, so stop whining and start converting. And don’t laugh, either. After all, didn’t Isaac Newton have to create new math before he could prove his three Laws?

The second controversial, and even more mysterious, aspect of Google’s Grand Unification Theory of Devices is that individual keyword bids on mobile are no longer useful. Instead, mobile bids will now be calculated as a function of desktop keyword bids as explained in this equation:

The Law Of Bidding On Mobile & Desktop Devices (BMAD)

Translated, this equation states that your mobile keyword bid amounts will vary as a constant function of your desktop bids:

It no longer matters how your mobile keywords actually perform on mobile devices, what matters now is how your desktop keywords perform on desktop devices.

In olden days, advertisers only had one economic model to apply to AdWords bidding calculations. That model was based on the premise that your keyword bid should be a function of your conversion-rate-performance for that keyword. Now, with BMAD, we have two models. We can use that old model for our desktop device campaigns, and the new BMAD model for mobile keyword bids.

Now, I know you are saying to yourself, “how can it be simpler to employ two models rather than one?” As I said earlier, creating simplicity isn’t all that simple. Does that help? Good. Read on.

To make working under two economic models more simple than working with one, and to make the BMAD economics viable in the first place, Google simply invented the Mobile Bid Adjustment Factor, or BMAF, for short.

The BMAF is a constant, a percentage ranging from -100% to 300% that you can set yourself at the campaign level, which automatically creates your mobile keyword bid as a percentage of your desktop keyword bid. And, to make things even easier, any time you change any of your keyword bids, the BMAD BMAF instantly changes your mobile keyword bids, too. You’re welcome.

Still skeptical? Why, you ask, should mobile bids change every time we change a desktop bid? Why should mobile bids vary based on desktop bids in the first place? These are good questions. Let me get back to you on that.

Did Google Get It Right With Enhanced Campaigns?

Putting aside the shaky assumptions underpinning Google’s new Enhanced Campaigns that I satirized above, the question of the day is: will Enhanced Campaigns work and will advertisers be happy with it? Will Google be happy with it? Will Mobile CPCs rise and improve Google’s net profits?

There are certainly a lot of questions to be asked, and answers to be discovered, and the topic will certainly dominate the blogoshpere for months to come.

We’ve started modeling the expected impact of merging campaigns, and so far, we can find no significant gains or losses in the cutover, and so, we are starting the conversion process for our smaller customers.

Final Thoughts

A few final thoughts and questions about Enhanced Campaigns. Anyone who wants to weigh in, including Googlers, please leave your comments at the end of this article.

First, why didn’t Google first change the way it handles the time of day reporting and accounting for clicks?

I’d have thought this would have been the very first part of any AdWords reorganization. As it stands now, we still have to bid for clicks based on the time zone of the account, rather than the time zone where the click actually occurs. So, for example, If you want to reach people during their lunch hour, it would take 3-5 different campaigns for the US alone.

Some of the exciting new features in Enhanced Campaigns, like geographical bidding and site link scheduling would be much more useful if AdWords campaigns were based on click location.

Second, Google’s Product Managers have learned that handling PR surrounding new platform releases is probably as important as the release itself. I am sure that Google PR teams were embedded with the development teams, because the minute the story broke, there were industry pundits all lined up to say nice things about the changes.

Google strategically ‘leaked’ info to hundreds of major account reps, writers and bloggers so that within minutes of the announcement, the Internet was full of positive spin, which drowned out the negative voices. Well done, Google Product Development and PR teams. I sure hope there is as much steak in this new rollout as there is sizzle.

Well, that’s all that’s on my mind for Enhanced Campaigns this month. Want to give a big shout out to my brother, Bob, for his help with the physics and math stuff. Helps to have a physicist in the family! Please comment below with your own thoughts and ideas on Google’s latest efforts.

Having finished a detailed, three-part series on the Google Display Network last month, I thought I’d switch gears and jot down a few random aspirational musings about simplifying PPC reporting and finding better ways to preserve important historical findings inside our PPC campaigns.

These are my own chin-pulling musings — please feel free to add your own aspirations for the year ahead in the comments section at the end of this post.

The Zen Of Data Reporting

I have to admit to feeling a certain brotherhood with airline pilots who fly planes using a dizzying array of indicators, dials, levers, buttons and blinking lights that tell them everything about their planes operations so they can maintain proper course headings and schedules. Every reporting instrument and all the control levers and buttons within an arms length’s reach are important at some point in the flight.

The keys to a successful flight are the pilot’s ability to interpret real-time data from these complex data displays, to decide what changes are needed and the know-how to push the right buttons at the right times, gently or aggressively, to make appropriate course corrections.

Managing PPC and flying jumbo jets requires mastering complex data displays and controls. (iStockphoto used under license.)

I think that what we do as PPC campaign managers is very similar to that process.

All day long, we scan dashboards, real-time data charts and columns and rows of raw data, trying to get a handle on what’s happening inside our campaigns at that moment in time. And we feel a rush of adrenaline when we spot a particular trend or a sketchy data point out of range that jolts us into corrective action.

This sort of stimulation is what keeps us doing what we do. We love working with all the data. We love exerting control and changing performance quickly and forcefully. We pride ourselves on knowing exactly what buttons to push and when to push them (or not) in our Bing Ads and AdWords accounts.

However, as passionate as we may be about what we do, when it comes time to explain to our clients what we’ve accomplished, we can’t give them a running commentary on everything we’ve done and why we did it. A common tendency we all are guilty of at some point, is overwhelming our clients with data, numbers and charts. Maybe it is because we just can’t help gushing about what we do, or how clever we are, that we substitute voluminous data for actionable analysis and recommendations.

At the end of the day, though, the only thing our clients really want to know is “Are we on target?”

Here’s the problem. The process for, and the goals of, communicating results is nothing like the process of creating those results. Reporting results can and should be different and much more elegant.

For example, although a pilot might love to explain all the technical aspects of what they did in flying you from San Jose to Boston, they will probably simply say, “Welcome to Boston.” That really says it all.

So how can we ‘say it all’ about our PPC campaign efforts and achieve a similar simple reporting elegance? How can we eliminate every non-essential metric in our reporting, and by simplifying, make our reporting even more powerful? I don’t know the answer to that question, but one of my quests this year is to achieve the zen of client campaign reporting.

Visual displays of data, such as Excel charts and graphs are certainly going to be a part of that simplification process. Simple line charts like the one below are helpful, because they can show history, current status and provide a glimpse of what the future looks like with just three simple lines.

The chart below tells the story of what’s happening with an increase to ad spend budget implemented around May. The question on everyone’s mind is whether more ad budget will lead to more sales opportunities.

A simple trend line chart tells a complete story.

In this chart, the dotted line shows our original target goals based on the original budget. The black line shows the new targets expected from the increased budget. The green line shows the progress towards our new target. Our report to the client, based solely on this chart could be very simple. “We are making progress, but slow progress towards our new goals.”

But, we actually don’t even have to say a word. The client can see this for themselves because the gap between the green and black line is closing, but not very quickly. No more data is need to understand what is happening, it is self-evident in the chart.

Before we can achieve zen reporting, I think we must first establish clear, measurable goals and objectives for each of our campaigns. Without forward-looking objectives, we can only know where we are now and how we got here. That, unfortunately, is a story about the past and we can’t change the past, we can only describe it. We can only change what lies in front of us. With target goals and objectives, we are able to report where we started, where we are now, and most importantly, where we are heading.

Now, instead of worrying about what has already happened, we can quickly turn to discussions of what actions can be taken to change the trajectory of the future.

The Zen Of Change Management

Although we have been at the PPC game for more than a decade, we have yet to create the perfect ad group or campaign. Now I know it’s crazy to even consider perfection – as in an ad group where all the keywords all have 100% click-through and conversion rates. And yet, perfection is the direction we all want our campaigns heading.

If we have a 10% CTR, we’re not satisfied until we get to 11 or 12%. Once we’ve hit 12%, we want to keep going higher still. So, while we know we’ll never attain perfection, we always find ourselves striving toward that ideal.

One challenge we always run up against in our quest toward perfection is doing, undoing, and then redoing the same things to our campaigns over and over again. This is especially true when new account managers take over accounts and, all too often, the accumulated intelligence of why the structure of the campaign is the way it is, and why match-types, negative keywords, ad copy, landing pages are what they are, and all that has transpired within the history of the account is lost or simply forgotten. And over the course of time, we even find ourselves (or a fellow account manager) undoing helpful changes and repeating unhelpful ones.

Both Bing Ads and AdWords give us historical change reports which help us identify what’s changed, and when those changes were made. Those reports, such as the one from Bing Ads shown below, are enormously helpful for diagnosing the cause of significant performance changes. But these change reports, while valuable, only tell us what changed, who made the change and when it happened. They do not tell us why the change was made.

PPC Campaign history reports show what’s happened and when, but not why.

If we want to keep moving our campaigns toward the perfection, we need to remember why each change was made.

Some changes may have been tactical, reactionary and temporary, like bid modifications. Others may have been temporary, but strategic, such as testing match type changes, ads and landing pages. Other account changes may have been more fundamental, structural and semi-permanent, to incorporate our best accumulated understanding of how to succeed with our online campaigns.

Clearly, it is important to capture and document the ‘why’ behind changes we make, especially the more fundamental and structural ones, because if we don’t remember why we made the changes, we are more likely to undo the very things that have propelled our accounts to their current state of success.

We do our best to document and describe all the account changes we make, but under pressure of deadlines and competing priorities, and people just being people, the histories we keep are often not much better than the automated reports that Google and Microsoft search engines provide. Until we can preserve the accumulated wisdom that each of us contributes to in our PPC campaigns we will never be able to achieve the perfect ad group, or even moving in that direction.

So, I’ll leave you today with these two overarching issues to ponder for yourself. How can you simplify and improve client reporting, and how can you capture and preserve the essence of all changes you make inside your accounts?

I apologize for not offering prescriptive solutions to these problems, but these are questions we all must answer for ourselves. Sometimes questions teach you more than answers.

I like to think about two distinct types of display campaigns which work together but have different goals. The first type is a ‘seed’ campaign, which uses automatic placements to enable our ads to show on every possible relevant webpage across the Internet and which generates conversions at reasonable levels.

The second type is a ‘harvesting’ campaign, which takes the best performing display placement sites from the seed campaign and allows us to optimize them for more conversions and lower costs.

Tip #1: Separate Display From Search Network Campaigns

The most important rule for structuring your display campaigns is to make sure they are Display Network only.

Always create separate Adwords campaigns for the Display Network

Display advertising is very different from search, and enough articles have been written about this point that I hate to even mention it here, except that Google still offers this sort of advice in its online help shown below. (The suggested correction is mine.)

This snippet is from Google help files. The editorial insertion is mine.

For the life of me, I can’t figure out why Google continues to make statements like this. Advertisers who know the difference between search and display advertising know that it is important to manage them separately. New advertisers are particularly susceptible to this sort of poor advice, and I’ve seen way too many ill-informed advertisers blow substantial parts of their budgets on display network ads with absolutely nothing to show for it.

Selecting Campaign Settings

Most of the targeting options you will use for fine-tuning your display campaigns are managed at the ad group level, but you need to select options for Devices, Bids and Budgets, Locations, and Ad Scheduling upfront at the Campaign level.

You’d be surprised at how simply changing from CPM to CPC bidding can change your campaign reach, and profitability; or how differently tablets perform versus smart-phones or desktops; so, once you have your campaigns up and running, you’ll find you want to test different settings for your most important campaigns.

Sometimes your products and services offerings dictate your Campaign settings for you; but in other cases, you’ll have to let the campaigns run for some period of time before you know whether or not to duplicate your campaigns and test different campaign settings.

Tip #2: Manage To Placements

In search campaigns, managing and optimizing the tightest sets of keywords is the ultimate goal for your campaign structure. In display campaigns, your success is all about identifying the best placements and then optimizing to those placements with your targeting options, your ads and your landing pages.

That’s why we generally like to start off with two types of campaigns, one that uses automatic placements, and then another that uses managed placements. With the automatic placement campaigns, we let Google do its best work to place our ads on sites targeted by keywords and topics, and then harvest the best placements into their own managed placement campaigns where we concentrate on optimizing them specifically.

Tip #3: Keep Targeting Simple

When Google introduced its new flexible targeting, it enabled many of the targeting options to be implemented at the ad group level and combined together. You can target keywords, placements, topics, age, gender, interests and remarketing all in the same ad group. In addition, you can optionally specify that some of your targeting options are used to target sites, while others are used only to determine the bid.

For example, if you have a keyword-targeted ad group, and tell Google to show your ads on all eligible placements, not just the ones you specify, then Google will use your keywords to target the site, but your placement bid to determine your actual bid.

This selection means that placements are used only for bid determination.

The more targeting options you layer onto an ad group, the tougher it is to understand what is influencing your performance. In the example below, you’d be hard pressed to know what caused you to win (or not win) a placement.

Combining GDN targeting options gets complex quickly

Although the placement bid is considered the most specific bid, if it was your topic bid that enabled your ad to show, then your topic bid is used. As you can see, it gets pretty complex pretty quickly. There are cases where you will want to attempt this sort of flexible targeting all within the same ad group, but this requires very close attention to detail and painstaking setups.

For a great discussion on how that all works, I recommend you watch this video by my colleague and fellow Search Engine Land author, Brad Geddes, who takes you through the logical hierarchy of flexible reach targeting and bidding logical hierarchy of flexible reach targeting and bidding.

In general, however, we recommend keeping your targeting and bidding separated, and to limit your targeting selections and exclusions to the fewest possible.

Tip #4: Targeting Combinations For Seed Campaigns

The dual purpose of seed campaigns is to expose your ads to the widest reasonable audience at a reasonable cost and to identify sites that have enough impression volume and topical relevance that you want to focus on them in a harvesting campaign.

We find that the best ad group targeting combinations for seed campaigns are:

Keywords + Negative Keywords

Keywords + 1 Topic (or subtopic)

Keywords + 1 Topic Exclusion

We advise against ever running keyword or topic targeting as standalone options. They are simply too unfocussed.

Any of these targeting options will be sufficiently open to allow you to start developing performance profiles for sites you’d like to focus on, and as well, they can bring you good converting traffic from a plethora of the lower volume sites out there on the Internet. Your seed campaigns are not set-it and forget-it, though. You will want to monitor the traffic coming in and fine tune the seed campaigns little-by-little to sculpt the types of sites you are bringing traffic from.

Tip #5: Targeting Combinations For Harvesting Campaigns

Once you’ve identified some good placements from your seed campaigns, you then want to optimize and manage them as managed placements. Again, we recommend that you keep things simple, and isolate only a few targeting options by ad group.

Keywords+ Placements + Negative Keywords

Keywords + Placements + Topics

Keywords + Placements + Topic Exclusions

We typically manage our harvesting campaigns by the keyword theme of the ad group, and manage a few dozen placements inside those ad groups. Over time, however, as we’ve sufficiently optimized the ad groups using these tactics, we will then take the highest volume placements, and move them into their own ad groups, so that we can tailor the color, style and text of the ads to be more integrated with the placement website/webpage, and tweak landing pages for them, too.

Tip #6: Separate Out Your Text And Image Ads

Text and image ads will perform differently on your placement campaigns. We recommend splitting them out into their own ad groups, by image size, so you can easily see which ad sizes perform well on your various placements.

Targeting Options On The GDN

The ultimate goal of targeting your ad on Google’s Display network is quite simple, really. You want to find the websites and webpages across the length and breadth of the Internet where your ads attract visitors to your site who then become customers.

I think of the display network sort of like a gigantic news stand with billions and billions of printed pages contained in millions and millions of magazines, newspapers, and books, with tens of thousands of perfectly wonderful places to display our ads to audiences as precise as nice, little old ladies on their way home from church.

Like a favorite news stand, Google’s Display Network has something for everyone.

I think the news stand is a helpful analogy to bring the various GDN targeting options into focus. AdWords gives is the targeting tools to help us cut the Internet down to a more manageable size and cut through the clutter. There are plenty of pages where we can place ads. Our job is to find the best ones and milk them for all they are worth

Making Sense Of GDN Targeting Options

What is a topic, really? What’s an audience? Do keywords work the same way in display campaigns as they do for search? In fact, the way GDN targeting options work are generally more ambiguous than the literal keyword targeting we’re used to in paid search. It takes some time working in the network and lots of experimenting before you understand how your keywords behave, and how often your perfectly logical assumptions are anything but.

Before we dive into those issues, let’s start with AdWords targeting we already know from search-only campaigns. The good news is that all the standard campaign-level ad targeting and delivery options we have come to know and love in search are just as applicable in the GDN: budgeting, geo-targeting, ad scheduling and rotation all work pretty much the same way. Want to target ads to people in Venice, Italy, browsing on their mobile phones as they stroll the avenue at 11:00 on a Sunday morning? Non un gran problema.

There is a second set of targeting options, however, that are GDN-specific for controlling ad distribution. These options, most of which are implemented from the ad group level (thank you, Google engineers), give you plenty of flexibility to experiment with the targeting options listed below, either as standalone tactics or used in combinations.

Powerful targeting options for expanding and refining display ad campaigns.

Placement Targeting

When you hear Google or other advertisers talk about placements, be careful to understand the context. Placements can mean the the actual websites, webpages, and apps where you get your ads placed, or it can be a short hand way of saying, ‘managed placements,’ which is a targeting options that lets you hand-pick the websites you want your ads to appear on.

There are basically two ways to find placements that will work for you.

The first is called automatic placements, where you train AdWords to find placements for you by specifying combinations of the keyword, topic or interest targeting decisions. AdWords uses your targeting rules to look for contextually relevant webpages across the Internet and then automatically places your ads on them.

Automatic placements is a great way to show your ads on highly-relevant pages you never knew existed. New content pages come online all the time, and automatic placements enables you advertise on them. We like to use automatic placements both as a revenue generator, and as a farmfield where we discover promising sites and then tend to them directly as managed placements.

Managed placements are specific sites you literally instruct AdWords to advertise on by adding the URLs into your ad group. You can enter sites you already know of, or find sites by using Google’s Placement tool or other competitive analysis tools like AdGooroo, SEMRush and others to find promising domains to target as managed placements.

Generally speaking, if you target placements just by the top-level domain URL, you are not going to get your best ROI. Using our newspaper analogy again, that would be like targeting an entire paper, when you really only want to place ads into the sports section where they are contextually more relevant.

For large, diverse websites, like the New York Times or ehow.com, AdWords may allow you to select and target subdomains and directories so you can avoid clicks from non-relevant parts of those sites.

Using keyword and topic targeting improves your managed placements.

However, placement targeting is more powerful when you combine it with other targeting options like keyword and topic targeting because they can help you drill into the specific pages that are most relevant to your products and services.

As you optimize your GDN display campaigns, be sure to review the performance of the places your ads actually appeared. You will notice sites that are simply not appropriate and some that will completely blow your mind. In that case, you can prevent your ads from showing by excluding those inappropriate sites. You can manage site exclusions either at the ad group or campaign level, and in shared libraries across multiple campaigns.

Keyword Targeting

Keyword targeting is probably the most prevalent targeting method used by advertisers, but perhaps the fuzziest and least understood targeting option. The concept is that you want to use keywords to train AdWords to find the right sites for your ads. Easy concept; but in fact, you’ll want to spend a lot of time working on this targeting tactic. How keywords are used to present search ads in direct search is quite different than how they are used to determine contextually relevant websites.

Using your search keywords is a common starting point for GDN keyword targeting, but it is not a magic bullet. There is a big difference in how keywords are used in search results versus identifying contextually relevant websites.

Google is actively working on this challenge and gives us the ability to target individual keywords in our display keyword ad groups. This allows us (and Google) to get more data on how individual keywords perform their targeting task; so, keyword targeting should get better as time goes by.

Here’s an example of where using the same keywords as search campaigns can go wrong on the display network. Let’s say you are the owner of lobster.com and sell lobster by mail order. You might advertise on words like “live maine lobster” or “mail order lobster.”

When Google tries to match those keywords contextually to websites, it is likely to select sites that are about lobster, the lobster business, aquaculture, or the coasts of Maine. However, when you are selling lobster online, you know what you are really selling is joy. Lobster is rarely eaten alone; it is usually the cornerstone of a special occasion, anniversaries, family gatherings or the ‘Feast of Seven Fishes’ that many Italian-Americans celebrate on Christmas Eve.

Instead of targeting sites about lobster, you may find more success advertising on sites about special occasions, memorable meals and celebrations.

You can use AdWords’ Contextual Targeting Tool to see what sort of sites it would attempt to target using your keywords before you put them online. As you can see from example below, their keyword targeting is still imperfect, so use keyword targeting as a standalone tactic carefully and keep an eye on your results.

Placement “suggestions” from Google’s Contextual Tool. Use with Caution

A current best practice for structuring GDN ad groups is to use smaller and tighter keyword sets. I expect keyword targeting will improve more rapidly now that advertisers have more visibility at the keyword level, but for the present, assume the targeting it is still quite fuzzy, so be careful how you use them as an standalone targeting option on the GDN. Caveat Emptor.

Our preference is not to use keyword targeting as a standalone tactic, but to combine keyword and placement targeting, or keyword and topics targeting.

Topics Targeting

Topic and subtopic targeting is a really broad targeting option that allows you to advertise on sites and sections of sites devoted to specific topics. Makes sense, right? Using our news stand analogy, the financial papers section of the stand would be a good example of a topic.

Using topic and keyword targeting, you can focus your Google Display Campaigns into narrow niches.

Targeting topics and subtopics can help you drill into pages where your target audience would expect to see your ads. A topic is, by it’s nature, a very broad targeting option, and can be an umbrella for many different subtopics. The topic of finance would likely contain subtopics as diverse as stocks, bonds, IPOs, insurance, personal taxes, business profits, mergers and acquisitions, home mortgages, student loans, credit cards, banking, retirement planning, personal investing, and so on.

Topics can be so broad that in its online help, even Google very diplomatically recommends caution when using Topics as a standalone targeting tactic:

I don’t know about you, but I read “blown budget” between the lines.

Google offers several thousand topics and subtopics you can use either to target users, or perhaps more usefully, as a negative targeting tactic. My good friend and esteemed colleague, Brad Geddes, offers very good, and still quite timely advice on topic targeting in his article, 3 Ways Topic Targeting Can Improve your Display Advertising.

We rarely use topic targeting as a standalone tactic, but combine it with placements or keywords more as negative targeting tactic. We’ll go more into the do’s and don’ts of combination targeting tactics in this columns next month.

Audience Targeting – Interests & Remarketing

The methods of targeting we’ve talked about so far are all about finding the best locations to put our ads in front of the people who are most likely want our products and services.

Audience targeting takes the opposite approach. Instead of locating the best webpages, we want to locate the people who are most likely interested in our products and services and put our ads in front of them wherever they may be (within reason, of course), using frequency capping to prevent them from seeing our ads on every site they visit.

The two primary “people” targeting tactics are remarketing and audience targeting (or as I call it, “premarketing”).

A remarketing audience is defined as anyone who has visited and interacted with your website and taken (or not taken) certain actions that signal their interest in your company. A remarketing cookie is placed in their browser so whenever they visit other sites within the GDN, we are able to remarket to them; that is to say, show them our ads.

Audience targeting, or “premarketing,” as I prefer to think about it, targets an audience defined on Google’s website as “people whose browsing patterns are similar to the browsing patterns of your existing site visitors.” In other words, the assumption is that even though these people have not yet seen your site, there is a good chance that they will fall in love with it the minute they see it, and come buy your stuff.

Google creates the audience list based on interest categories you select in AdWords that describe the type of people you are interested in showing ads to. Google then looks at its enormous cookie pool of people who have visited sites in the GDN, and creates your audience based on their online browsing over the last 30 days and the interests shown in their Google account profiles.

Ads that get shown to targeted audiences can show up anywhere on the Internet that supports GDN ads, so one drawback of using both Audience targeting and remarketing is that ads may be totally incongruous when they appear on certain sites, and it becomes clear you are ‘stalking’ your potential visitors around the Internet.

We use audience and remarketing sparingly and generally in combination with topic or placement targeting to at least make our ads show up in places that don’t look completely out of place with their surrounding content.

Demographic Targeting

Demographic targeting is self-explanatory. It gives you the ability to target and bid for your demographic audiences, and it may give you some marginal ability to fine-tune your other targeting tactics. The data is not perfect, as it is drawn by inference, self-reporting, and online behaviors that Google models out to help improve contextual targeting across all search and display networks. We generally use demographic targeting only for products and services that have strong gender or age biases.

Category Exclusions

Category Exclusions is a legacy setting in that it is the only GDN-specific targeting option that lives at the campaign level. With category exclusions, you can prevent ads from showing on sites that are clearly not in your brand’s best interest or will simply be unproductive for you.

While Google gives you a couple of dozen categories to choose from, there are some categories, such as parked domains, error pages, ads appearing below the fold, that you will want to test before excluding. As objectionable as we find parked domains, they sometimes are great lead generators.

Use Category Exclusions to Reduce Unwanted Ad Impressions

Summary

We’ve covered a lot of important ground in this month’s column because it’s important to really understand what the targeting options mean before restructuring your campaigns to accommodate them. Next month, we’ll do exactly that — show you how to structure campaigns, ad groups and combine tactics for better success on the Google Display Network.

Thank you, readers, for all your great and challenging feedback on my columns this year. Please leave a note below if you have comments, corrections about today’s column or even suggestions for things you’d like me to write about in 2013.

Happy Holidays to you all!

Some images from istockphoto, used under license.

Today, we’ll highlight a few important recent targeting updates you should be aware of, and in the coming months, we’ll drill down even more deeply into the art and science of working inside the GDN.

Google’s approach to display advertising – to make it accessible to search marketers not skilled in traditional advertising – continues to push the industry forward towards ever better targeting and accountability.

The Art & Science Of Display Advertising

Display ads, both online and their offline counterparts, print ads, have been around much longer than Google of course, but what Google has done is give paid search managers the ability to get into the game and run display advertising campaigns with ever-increasing precision.

Whatever paid search managers may lack in knowledge about the traditional art and science of display advertising, they can compensate for it by applying their working knowledge of paid search targeting and by pointing and clicking their way into pretty reasonable display ad campaigns.

Getting started in display advertising on Google is certainly easy enough, but to really master it, inside and outside of the Google GDN bubble, is a full-time job.

If you’d like to take your display advertising game up a few notches, spend time over on Marketing Land, where you can learn from seasoned experts such as Shelley Ellis who wrote this highly useful ‘how-to’ article on successfully managing GDN placements just a few weeks ago.

Targeting In The Google Display Network

As Shelley points out in her article, finding the right placements and focusing in on them is the key to success on the GDN. It’s all about the placement. Once you find a website that converts for you, a section on that website or even a single page on that site, you want to milk that placement for all its worth.

Our process for creating a new campaign is to start simply with a few dozen ad groups and a few promising-looking websites to target as placements.

After a few weeks, when we’ve found some sites that show promise, we then try to refine the performance of our best looking placements by playing around with gender, age and topics targeting, and then go looking for other placements by testing out new keywords and topics in auto placement campaigns.

Recent Changes To Keyword Targeting Functionality

As search marketers, we are generally very comfortable with using keywords as the starting point for any targeting we do on the GDN, but over the years, the way keywords are used has changed.

The best practices have changed a few times over the years as Google algorithms worked out ways for advertisers to connect with the most relevant placements defined by themed groupings of anywhere from 5 to 25 keywords.

How keyword targeting works has changed once again; this time and it promises to truly simplify things. Google believes it has figured out a way to make individual keywords the elemental component for finding relevant placements.

We no longer have to worry about defining themes to describe the sites we are targeting – all we have to do is create small, tightly focused ad groups just like we do for search. And, because Google now targets based on individual keywords, we can also see how individual keywords perform, and bid them up or down accordingly. That’s huge!

Be aware, however, that all the keywords in your display ad group are treated as broad match. That means that single term keywords can be very dangerous, just like they can be in search. It’s best to use keywords with 2 or 3 terms. If you want to try broader terms, go for it, but make sure to use negative keywords and site exclusions to make sure you aren’t blowing a lot of dough on non-relevant sites.

Speaking of negative keywords, you need to know that negatives work differently in display than on search. In Display campaigns, Google only considers a maximum of 50 negative keywords for any given ad group.

So, even though you may have thousands of negatives that control traffic for your search campaigns and ad groups, when you port them over to your display campaigns, Google will ignore all but 50 for any given auction.

If you have more than 50 negative keywords (total of ad group + campaign) Google will consider no more than 50 – and will select what negatives to use randomly. Yes, you read that right.

If you have more than 50 negative keywords, you have no idea of what negative keywords will apply in any given auction. That is not new, by the way, that is the way it has always worked, evidently, which would explain a few odd things we’ve seen over the years.

The reality of this little peculiarity may not be quite as dire as it first appears because in the GDN you can use Topics as a negative targeting tactic. That’s something you can not do in search. A few well-chosen Topic exclusions can do the work of hundreds of negative keywords.

Google offers around 2000 Topics and Subtopics you can select to help control where your ads will show, as shown below:

Google offers roughly 2000 topics/subtopics to help advertisers target or exclude sites for their GDN campaigns.

New Ad Group Level Targeting

For all new Display campaigns, Google has introduced “flexible reach” targeting, which moves some targeting that had been stuck at the campaign level down to the ad group level. In general, flexible reach targeting will give us greater control over targeting and the ability to play with targeting combinations more easily.

While I suspect that many advertisers will want to implement and manage targeting options at the ad group level, it is very interesting to note that Google will not force advertisers to adopt flexible reach targeting automatically; existing campaigns will all retain their current targeting and bidding selections.

I figured we’d hear some wild predictions about new mergers and buyouts, ad formats, campaign automation tools; and the usual whining about rising CPCs, Google’s quality score and ad serving policies; and whether or not Microsoft would make a significant dent in Google’s search marketshare.

Instead, our panel, which included some of our industry’s most experienced paid search luminaries like Chi-Chao Chang of AdX, Kevin Lee of Didit, Kimm Lincoln of Nebo, Craig MacDonald of Microsoft, and Sid Shah of Adobe talked more about fundamental ways that search behavior is changing as a result of new devices.

I’ve tried to capture some of their thoughts on where paid search is heading next year to give you some food for thought as you look ahead to plan and budget for paid search 2013.

Desktops, Tablets & Mobile Phones

Our conversation started on the topic of the huge increases of non-desktop devices that people use for search. Sid Shah believes, and other panelists agreed, that mobile search clicks may account for as many as 20-25% of all search clicks in 2013.

I think that most paid search managers know by now that you can target mobile phones, tablets and desktop computers distinctly in Google AdWords and Bing Ads campaigns, and that at minimum, you should target the mobile phones separately, so that you can bid them appropriately (usually lower bids) and direct users to mobile-friendly landing pages.

The question came up, “Does it make sense to target tablets separately, too, or just lump them together with desktop computers?”

Microsoft’s Craig MacDonald suggested that while mobile devices contribute incremental clicks and have their own specific use cases, tablets and desktop searches are “very, very similar” in spite of media reports to the contrary.

Kevin Lee and Chi-Chao Chang, on the other hand, argued that search behavior on tablets can be markedly different from desktops because of how, when and where people are using these devices. Tablet usage typically spikes in the evenings and weekends, when people are reading e-books, watching TV with their iPads on their laps, or engaging in other leisure and social activities.

Although tablet-based search queries may indeed be very similar desktop queries, the queries themselves take on new meanings and implied intents depending on the place, time-of-day, and the environment in which the tablet is being used. For those reasons, Lee and Chang thought that separating tablets into their own campaigns makes a lot of sense.

On a related note, AJ Kohn (a contributor at SEL’s sister site Marketing Land) made a startling observation on his blog last month.

AJ reported that for the first time ever, his analysis of comScore data shows a a year-over-year decrease in U.S. desktop searches across Google, Yahoo and Bing, as illustrated below:

Mobile and tablet devices may be cannabilizing desktop search volume.

The implication, of course, is that if you haven’t already started to think through your strategy for addressing the changing shape of the search device landscape, now would be a very good time to start.

Increased Complexity In Your Accounts

More targeting, of course, means more complexity in your accounts.

Since device targeting in Google AdWords is done at the campaign level, that means that you need to consider device-specific campaigns for each of your other targeting segments, such as display, geography, brand, non-brand and so on.

Where you may have had 50 campaigns before, you’ll need 150 to cover mobile, tablet and desktop. The same holds true on Bing Ads, except that you have the option to target devices either at ad group or campaign level.

As you can see, targeting can increase the complexity of your account very quickly and overwhelm your ability to manage it — either manually or with automation tools. My colleague and fellow Search Engine Land author, Benjamin Vigneron wrote an excellent post on managing account granularity versus scalability last week that is definitely worth reading.

Target People, Not Keywords, Devices & Locations

The true complexity of paid search in 2013, however, won’t just come from the cut and paste mechanics of creating and then managing multiple campaigns, but rather from the extra effort you’ll need to apply to creating and testing new ads and landing pages as you optimize your new targeting campaigns.

Craig MacDonald told us to expect search engine targeting to keep evolving in 2013 from simple keyword, device, and location filters, to include more social and demographic data filters, too. Both Google and Microsoft are working on the ability to allow users to do real time bidding on search keywords that take recent search history into account.

For example, if a particular person searches on [automobile] you may want to bid up when they search on word [auto insurance] in order to drive improved conversion rates.

There is a flip side to this progression of ever-improved targeting, too. As search engines give us more social and demographic targeting signals, it then becomes our responsibility to define our audience targeting segments.

What that means, of course, is that we actually have to know who our customers really are. We need to know how old they are, what professions they work in, what they read and what they do on weekends. Instead of knowing our keyword inventory and match types by heart, we need to know what is in the hearts of our actual customers.

Kimm Lincoln referred to this as “human-centered PPC” thinking. Instead of thinking only about keywords and ads, we need to also approach our campaigns from our customers’ perspectives.

In other words, do more of what traditional offline marketers have always done. Kimm suggests we incorporate insights from the rich demographic and psychographic data we get from online social networks on Facebook, LinkedIn, and Pinterest, as well from offline networks like sales reps, user conferences and so on, into our paid search program designs right from the start.

Tracking & Attribution

Tracking and attribution, unfortunately, may not get better in 2013, and may even get worse. As Sid Shah put it, not being able to track a conversion across devices is a huge blind spot.

Between Google removing more search queries from query strings and the ongoing challenges of trying to understand user behavior as as they switch back and forth between their phones, tablets and desktops, our ability to correctly attribute conversions will take a few steps backwards in 2013.

Bottom Line For Paid Search In 2013

The bottom line for search marketers is that mobile phones and tablet devices are significantly transforming the ways consumers search, make transactions and interact with brands online. Search marketers and many website owners are simply not keeping pace with these foundational changes.

The most important investment that most companies can make to improve (or maintain) the performance of their paid search campaigns is probably going to be in mobile infrastructure, U/X engineering and design.

Few companies have developed truly awesome mobile websites and landing pages that address the new demands and expectations that consumers have for immediacy and urgency. There is a big difference between a site that has been developed with the user and device in mind, versus a desktop site that has been converted, or stripped down to be a ‘mobile’ site.

The second area where you should consider investing is in training. Specifically, invest in training your paid search marketing team on traditional marketing concepts and applications. In many companies, PPC managers are generally more technically oriented than consumer savvy. They are probably more comfortable manipulating keyword lists, Excel spreadsheets and analytics reports than they are with describing and defining consumer behavior and motivational triggers.

Deepening your team’s skill set and changing their process orientation from from an inside-out, keyword-centric approach to one that incorporates a more holistic human-centered thinking will pay dividends in 2013 and beyond.

The more quickly I can get a handle on these two questions, the more quickly I can take appropriate actions. That’s why I love all the visual trend line graphs available in Google AdWords, Microsoft AdCenter and other paid search analytics tools.

With a quick glance, well-trained eyes, and the same sense of investigative curiosity that we see every night in crime and courtroom TV programs, I can quickly scan through our campaigns and find hotspots to work on.

Today, I’ll take you through the variety of trend line reports available to PPC account managers and give you a few simple tips and rules of thumb for reading them that is sure to to help you quickly identify problems and opportunities in your own paid search accounts.

Types Of Trend Line Reports

The best part about trend line analysis is that we are innately equipped as homo sapiens to sense motion, and trend lines are essentially a snapshot of campaigns in motion. Lines travel up, lines travel down. It’s not rocket science, but there are a few tips and tricks to working with trend lines that can help you leverage the richness of data contained within them.

Trend lines come in a variety of formats, one metric, two metric, multiple metrics, and multiple trends of the similar metrics. We’ll start with single metric trend line to illustrate some of the interpretation rules and then move on to multiple metric trend lines.

One Metric Trend Lines

Single metric trend lines are the easiest to interpret as long as you make sure understand the context and time-frame.

For example, this trend line shows five consecutive days of nothing but declining values. If this were clicks, impressions, conversions, you may (or your boss or client may) have some concerns.

Single metric PPC trend lines are easy to interpret. Lines go up or lines go down.

However, if you take this same data and look at it over a few weeks as shown in the chart below, you see that this data is not a problem, but rather a fairly typical intra-week pattern for impressions, clicks and conversions for many campaigns.

Single PPC metric trend line shows a typical weekly performance pattern.

This highlights Rule #1 for reading PPC trend lines: “Understand the context of your data.”

You need to understand the time frame (x-axis) and the scale of the data (y-axis) before you can find any useful information. Simple enough, right? As I said before, this isn’t rocket science.

The next challenge is to know when something has actually changed within your campaigns and is not simply due to random variation within your data. You don’t want to take action too soon, but you don’t want to wait too long to act, either. So consider this trend line chart below:

Most recent data in this trendline show a similarly shaped intra-week curve, but stunted volume.

Here, the most recent data at the right edge of this trend line look stunted, even though the shape of the intra-weekly curve is similar to previous periods.

Does this represent a random variation in the data, a temporary change in performance due to an extraordinary event, or is it a signal of real change to your campaigns? The answer is, it could any of these factors, which brings me to PPC trend line analysis Rule #2: “Any time a trend line looks unusual to you, investigate!”

As a rule of thumb, I always dig deeper whenever I observe a trend line with either an unexpected series of declining data points, or four or more consecutive data points clustered below the average (mean) from the previous periods.

Now, rather than do calculations, I simply eyeball the data, and draw a line that represents my best guess of the mean, sometimes even grabbing a snag of the trendline and drawing it in, as shown below:

PPC Trend line shows 9 consecutive data clustered below the mean, which likely signals a true campaign performance change.

Now, if you are serious student of statistical process control methodology, you know I am taking short cuts, but that’s the idea.

Your eyes can often spot problems without you having to stop, get out your slide rule, run calculations on the range and distribution of the data, establish upper and lower limits, calculate a few sigmas worth of deviation from the mean, etc., to determine if you’ve got a real change on your hands.

Instead of doing all that, the trend line suggests, at a glance, that something indeed has changed and your campaign is now performing at a different level.

Two Metric Trend Lines

Now that we’ve established some ground rules and techniques for reading the simplest of trend lines, we can now take advantage of two metric trend lines that not only can alert us when change has occurred, but also help us identify the cause of the change.

For example, a single metric trend line will tell us when conversions are declining, but we still need to know why. Have ad impressions declined, or do we have lower click-through rates (CTR) and fewer visitors to the site. Or, has our conversion rate changed because of website, product or pricing changes, or a change in the mix of keywords, display network sites and other sources of traffic.

Using two metric charts allows us to compare two different metrics to help discern the root cause of performance change. In working with two metric trend line charts, we basically have three standard patterns we need to recognize and understand.

Trends that move in the same direction

PPC Trendlines that move together

If all curves were so perfectly shaped, we’d easily recognize them, but in the real world such as the AdWords interface, they curves look more like this:

AdWords trendlines showing two PPC metrics moving in same direction.

An example of the data pairs you may observe that move in the same direction are ad spend|revenue, ad spend|conversions, clicks|conversions, and conversions|conversion rate among others.

If you notice clicks and/or ad spend are trending up, but conversions are trending down that may be a sign of trouble and you’ll want to dig deeper. Look for possible problems like broken landing page URLs, broad match keywords attracting the wrong types of queries and so on.

Conversions and conversion rate moving in the same upward direction is generally a good thing. If you see conversion rate going up, but overall conversions going down, that could be either a problem or an opportunity, depending on what your campaign goals are. If you are trying to decrease CPA to improve profitability, then that trend would be good.

On the other hand, it could signal that you are being too conservative and limiting your upside potential and perhaps need to expand your keyword inventory or loosen match-types to attract more clicks. If you look next at the trend line for the CPA|Conversion data pair, you’ll get a better sense of whether you’ve got trouble or opportunity.

Knowing what you expect out of your campaigns helps you understand whether or not you need to investigate further. Knowing when to keep your hands off an area of your campaigns is just as valuable as knowing when to make changes.

Trends that move in opposite directions

PPC trendlines moving in opposite directions.

Again, it would be great to have these nice smooth curves and well behaved data to make it easier to spot significant performance changes, but in real life the data looks more like the curves shown below.

Data pairs you may normally see moving in the opposing directions are CTR|avg position, ad position|CPC, CPC|CTR, CPA|conversions rate, and others.

As I mentioned before, once you train your eye to the normal pattern you are expecting, the more quickly you can spot trouble or opportunity when you are looking at the trend lines as you’ll see them in the real world as shown below:

AdWords trendline shows two metrics moving in opposite directions

Actually, the imperfect shapes of these curves gives you even more interesting data to work with. Looking at the area between the curves, you get an early indication of performance changes. In a dynamic marketplace, with advertisers coming in and out of auctions, changing ads and bids, changes in the area between the trend lines becomes a valuable signal, too.

When the area between the curves starts to close, you are seeing the early signal of performance changing. You don’t have to wait until the lines actually cross to start investigating for problems. Notice in the chart above, about half way across the x-axis, you can see the area between the trendlines disappearing.

This chart shows conversion rate and cost per conversion (CPA). Typically, when conversion rate (blue) trends up, CPA (red) should usually trend down. That’s healthy and makes sense – you are getting more out of every click. However, when the area between the two curves starts to get smaller, then you have an early signal that your performance is heading in the wrong direction, and you can step in and investigate before it gets out of hand.

CPC and average position curves typically move in opposite directions. So, if you see your CPC trend line going up, but avg. position is not moving down, then may be paying higher CPCs than you need to maintain the same position. If your intent was to get more clicks by bidding higher to get into better ad positions, then that tactic is not working. You are probably better off looking at a new round of ad creatives.

Trends that move in either same or opposite directions with time lag

PPC trendlines for time-shifted metrics

A third type of two-metric trend line pattern to train your eye to is really a blend of the first two, where you expect one metric to move as a result of another metric, but the movements are shifted in time.

For example, ad spend|conversions, impressions|conversions, or display network impressions|brand search clicks are some data pairs where you may have to train your eye to spot the pattern you are expecting to see. Depending on the length of the sales consideration cycle, you’ll look for the parallel (or opposite) movements timeshifted by days, weeks and even months.

Multiple Metric Trend Charts

Once you’ve trained your eyes and brain to work with one and two metric charts, you’ll really have fun with the charts, dashboards, really, that present 3 or more metrics for your analysis.

With multiple metric trend lines, like the one below, you can see problems and identify causes even more quickly than process of elimination of two metrics at a time. This is one set of reports right inside the Bing Ad Console that is rich with graphical data presentation.

Microsoft adCenter displays up to five PPC performance metrics.

In the chart above, we see a dramatic decline in clicks and we want to know what is going on. Is it okay or do we have a problem on our hand? We normally expect to see clicks and ad spend move in the same direction, but here, ad spend is staying the same and clicks are going down.

Looking at the Avg Position trend line, we see that our ad position curve is trending down, which means we are getting into higher ad positions. We are clearly paying more to be in higher positions, but both CTR and clicks are trending down. Ouch! That narrows down our problem, to a problem with ad performance.

The next thing I need to look at is what’s actually happening in the SERPs and whether or not we’ve put a new ad or two into the mix. It’s pretty clear by seeing all these metrics in one place that either a competitor has much better ad creative than we do, or we’ve put a new ad or two into test and they are dragging down our performance.

What’s really cool about working with trendlines, is that we’ve both identified problem and likely causes without even going down into the campaigns.

Getting Started With Trend Line Analysis

The more you train your eyes to reading trend lines, the more effective you will become as a PPC campaign manager. The best way to get started is simply to get started. Read a few trend lines, make some deductions and then dive into your campaigns to see if you are right. You’ll cry “wolf” a lot at the beginnning, but over time, you’ll develop such strong forensic abilities that you’ll feel like you’ve developed your own super power.

It’s been a busy few months with advertisers and Google forcefully exchanging opinions back and forth on topics such as ad rotation, features needed/wanted in AdWords, and changes to keyword match types.

In my column on the Google ad rotation change last month, I expressed my strong concerns about the latest changes to ad rotation (as did many other paid search advertisers and bloggers) and was very pleased that Google’s VP of Product Management, Nick Fox, announced that Google had reconsidered their actions on ad rotation behavior.

First, they expanded the even rotation period from 30 to 90 days, which seems like a more reasonable time period even for low data ad groups.

Second, they made the auto-optimize ad rotation an optional setting – but only if you specifically request it. If you haven’t already done it, take a minute now to keep  your ad rotation options open. We have done this for all of our client accounts and encourage you to do the same thing.

So, before I move on to today’s topic, I want to acknowledge the engineers at Google, who responded swiftly and diplomatically to its advertiser concerns.

Thank you, Google AdWords Engineers!

Match Types & Normalization – Where Are We Now?

Both Google and Microsoft have made significant recent changes to keyword matching options and the underlying normalization logic, so I thought it would be a good idea to take a step back and summarize where I think we are now, as of June, 2012.

The most significant change from Google was the addition of what I call ‘fuzzy’ matching for phrase and exact match types, which enables matching to singular or plural queries, close-stemmings and misspellings. Sort of like broad match modifier, but without having to add + signs, I suppose.

We don’t know precisely how Google decides what qualifies as a close variant though I’d be willing to bet that it gets fuzzier over time.

Meanwhile, Microsoft has made a virtual boatload of keyword-related upgrades to the adCenter on its steady march towards full functional parity with AdWords.  These changes include completely revamped negative keywords, addition of broad match modifier, and fuzzy phrase and exact match.

adCenter Negative Match

Microsoft abandoned the much pilloried cascading negatives implementation back in November, 2011. Now, negatives pretty much work the same way on adCenter as they do on AdWords, except that there is no broad match negative on adCenter.

One of the best parts of Microsoft’s newer implementation is the negative conflicts report. Not only does it show where you are inadvertently blocking traffic on adCenter, but if you have just imported your campaigns from AdWords, it will also show you what negatives are blocking AdWords traffic, too.

adCenter Broad Match Modifier

This implementation is pretty much a functional equivalent of the AdWords broad match modifier implementation.

adCenter Fuzzy Phrase & Exact Match

Microsoft actually beat Google to the punch on the rollout of ‘fuzzy’ phrase and exact match. However, adCenter’s phrase and exact match is less fuzzy than AdWords, because it only matches to singular or plural versions of your keywords, not ‘close variants.’ I sure hope they keep it that way.

One of the good parts of the fuzzy match implementations from both Google and Microsoft is that they still honor negative match logic, so you can still use advanced techniques for silo-ing keyword traffic with negative match logic.

This is important for managing head terms which have significant performance differences between singular and plural keywords, and also helps to ensure proper display of DKI ads. We’ll talk more about DKI ads across both platforms in this column next month.

For example, if you have already segmented your singular and plural keyword exact match ad groups, you can prevent the fuzzy match from poaching from either of the groups by setting your negative match types like this:

Using negatives to silo phrase and exact match query matches.

This technique will work automatically on adCenter, but to keep it working in AdWords, you’ll need to explicitly modify your campaigns settings to opt out of the fuzzy phrase and exact match as shown here:

Select out of 'fuzzy' phrase / exact matches if you used match-type exclusion logic.

Match Type Cheat Sheet

I am a big fan of cheat sheets and summary charts, and since so much has changed with keyword matching on Google and Bing in the last few months, I figured I’d make one that captures the essentials of what’s different between the two networks.

I am sure I’ll have to update it again soon, but here is my Match Type Cheat Sheet, June 2012 Edition:

Summary of AdWords/AdCenter Match Types (June 2012)

As you can see, Microsoft has come a long way towards achieving functional parity in keywords. One area where differences remain is in keyword normalization for phrase and exact match.

Keyword Normalization

You have probably noticed the normalization when you’ve ported AdWords keyword lists into adCenter, when you see keywords not imported because they are duplicates. That’s where the normalization comes in, and much of it happens on phrase and exact match.

AdCenter removes extraneous words such as “a,about, an,and, at, by, for, from, how, in, is, of, on, the, to, what, with” from keywords. This is a pretty significant difference, since it means that there are vernacular phrases that work well on AdWords but will not work on AdCenter, given current normalization protocols.

Summary of AdWords/AdCenter Match Types (June 2012)

For more on how adCenter currently normalizes keywords, take a look at this informative blog post  from Microsoft’s Tina Kelleher.

Summary

Hope you’ve gotten some good information from this month’s column. Please do feel free to leave comments or ask questions, below. Next month, we’ll take a deep dive into dynamic keyword insertion (DKI) ad implementations between Google AdWords and Microsoft adCenter.