Enhanced Campaigns Countdown: Rising CPC Insights & Migration Tips From iProspect

google-adwords-square-logoWith the July 22nd mandatory migration to AdWords enhanced campaigns looming, we will be checking in with marketers over the next several weeks to get their perspective on the transition process, hear what they’ve learned so far and what advice they have to share.

I recently spoke with iProspect’s Associate Director of Paid Search, Jeremy Hull, about his agency’s experience with the migration process and the results they’ve seen.  Hull issued an updated POV at the end of last month based on the $6 million in spend iProspect had run on enhanced campaigns since February.

The agency began testing enhanced campaigns a month before the public announcement in February. Ten advertisers opted to transition immediately, either because they saw merits in the new approach or they wanted to take advantage of a particular feature like click-to-call. After the management platforms iProspect uses — Marin, Kenshoo, Ignition One and Doubleclick Search — made their first round of changes for enhanced campaigns, the agency began transitioning all of their clients. Today, nearly all client campaigns are enhanced.

Learn Best Practices & Migrate Early

Hull admits that getting accounts switched over to enhanced campaigns puts an extra burden on already time-stressed PPC teams, but says migrating is actually easier than it’s been built up to be.

“This is a major change that requires advertisers to ‘flip the switch themselves’,” says Hull. “But Google has done a good job with documentation and explaining why things need to be done a certain way.”  iProspect also built their own internal best practices guide based on Google’s guidelines and from what they learned in their early testing.

Hull advises advertisers not to wait until the last minute because those who experiment and optimize now will be in a better position than their competitors who hold out.

Identify Your Primary Campaigns, Establish Campaign Parity

The hardest part of the process, says Hull, is the initial planning phase and reviewing duplicate, or cloned, campaigns. His advice is to first determine which campaigns to keep and enhance and which ones to pause. If you have duplicate campaigns set for device or location targeting, “pick one version of the campaign to move forward with, and then make sure it has parity with its other versions,” he advises. If for example, you have keywords or keyword match-types running in a mobile version of a campaign but not in the desktop, put in the time up front to ensure all the keywords and match-types  are included in your new primary campaign.

Then devote time to getting the campaign settings right.

CPCs Started Rising Across All Devices

From February until a few weeks ago, iProspect saw very little movement in CPCs, looking both across the entire client set and at just those accounts that had migrated.

However in mid-April, iProspect started to see a change in device-level CPCs across both enhanced and legacy campaigns. Tablet CPCs increased each week and were 12 percent higher by mid-May. Desktop CPCs increased by 14 percent and smartphone CPCs increased 9 percent.

One client that transitioned on May 1 saw overall CPC increase by about 9 percent, which was in line with the overall CPC increases the agency saw at that time.  However, the higher CPCs were offset by a 10 percent increase in traffic and an 18 percent increase in revenue. Both performance increases were larger than previous years during the same period, says Hull.

iProspect projects that CPCs will be volatile as more advertisers migrate and they expect that tablet CPCs will reach parity with desktop CPCs by August. ”The low hanging fruit of less competitive device targeting is going to go away,” says Hull. Still, the agency predicts smartphone CPCs will not rise as drastically as tablets since many advertisers are electing to opt out of  smartphone targeting in enhanced campaigns.

To those advertisers sitting out for fear of seeing their CPCs immediately rise, Hull says that simply migrating to enhanced campaigns isn’t going make your CPCs increase; the increases in CPCs aren’t tied to an individual campaign migration, but reflect an advertiser’s competitive set as a whole migrating.

As quality score is calculated separately by device, Hull notes that similar to the volatility you see when launching new keywords,  advertisers that have not been running ads on tablets are likely to see more CPC volatility than those advertisers who already have established campaign history on tablets.

Beware Of Over Bidding With Bid Adjustments

It will be very easy to over bid without realizing it, warns Hull. “The bidding tools are very powerful, but we are probably going to see spikes because of this”, he says.

Here is an example from iProspect of how overbidding can be an easy mistake:

Imagine a keyword with a $1.00 bid. After analyzing the data, your paid search team sets a device modifier to increase your bid for smartphone searchers by 100 percent, a geographic modifier to increase bids for searchers in New York by 100 percent, and a time of day modifier to increase bids between 4:00 p.m. and 10:00 p.m. (Eastern Time) by 100 percent.

Now imagine a searcher on her phone in New York at 8:00 p.m. performs a search that triggers your ad, and clicks on it. Because of the way the modifiers combine, you just bid $8.00 for that click.

Original bid: $1.00

X location modifier of 100 percent: $2.00

X time of day modifier of 100 percent: $4.00

X device modifier of 100 percent: $8.00

For those advertisers that have not been using device, day-parting or geo-location targeting, Hull recommends starting slowly and building up based on initial testing. Analyzing bid modifier impact is not an easy task at this point. For now, iProspect segments keyword data by location, time of day, and device in a single report and then goes back and manually to enter their current bid adjustments, a cumbersome and complex process that many advertisers won’t have the resources for.

Hull says they’ve been talking with Google about getting more granular reporting that will make analysis and optimization easier and for now cautions advertisers to modify with care.

Note:  This is part of an ongoing, occasional series about how marketers are prepping for the migration to enhanced campaigns.

Related Topics: Channel: SEM | Google: AdWords: Enhanced Campaigns | Top News


About The Author: writes about paid online marketing topics including paid search, paid social, display and retargeting. Beyond Search Engine Land, Ginny provides search marketing and demand generation advice for ecommerce companies. She can be found on Twitter as @ginnymarvin.

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  • http://www.bizwisdom.com.au/ Biz Wisdom

    “Modify with care” is the important part for mine. Modifiers in general add a lot of complexity to an account and make account optimisation infinitely more difficult. Our golden rule is to err on the side of not using modifiers unless the data or client business case absolutely demands it.

    Keeping things simple is usually the best recipe for success.

    Great post!

  • OllieWillie

    The New York mobile user example is very flawed… The $8 CPC is a max CPC, so unless someone else in the auction is willing to bid the same amount with the same Quality Score you’ll not be paying $8 for that click.

  • Thibaud Jurquet

    You’re absolutely right, but you’ll still end up paying a little bit more. I once had an account manager who kept on increasing his bid on a good keyword, even though its average position was already 1 ; when I analysed this keyword, its CPC had been steadily increasing. Not by much, but still enough to lose a few ROI points…

  • Jeremy Hull

    That’s a fair point–this is an intentionally extreme example!

    While your CPC likely won’t be $8.00, if you don’t pay attention to how the multipliers combine you likely won’t realize you’re bidding that high.

    Bidding multipliers are extremely powerful, but advertisers should be careful about how they combine, especially since right now there’s little “out of the box” reporting that illuminates these combinations after the fact.

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