New Data Suggest AdWords Enhanced Campaigns Actually Work

Lunametrics enhanced campaignsNearly two months after the forced roll-out of Enhanced Campaigns in AdWords, at least one key question remains unanswered: are we better off today than we were before?

In my column this week, I’ll try to answer that question using some data-driven analysis — but first, I thought it would be fun to take a quick trip down memory lane….

The Biggest AdWords Apocalypse That Never Happened?

Ever since Google announced Enhanced Campaigns back in February, search marketers have been moaning and groaning about the loss of control. Search marketing pundits were tripping over themselves making doomsday predictions about how Enhanced Campaigns were nothing more than a big conspiracy theory to drive up average cost per click (CPC).

The initial reaction to Enhanced Campaigns was pretty bad. Big search marketing companies were quick to make disastrous predictions. Like this one from Adobe that predicted CPCs would rise by 6%.

 discredited-adobe-study

Not to be outdone by Adobe, other vendors chimed in with their own studies, each predicting a more apocalyptic outcome than the last. Here’s one from The Search Agency claiming that Google CPCs rose a massive 21.2% from Q1 to Q2 2013.

most-ridiculous-study-on-cpc-ever

And here’s another from Covario that showed CPCs were up 7% in Q1 of this year.

another-silly-adwords-study

Thankfully, none of these apocalyptic scenarios played out. And we know this to be the case because Google actually reports on the change in average cost per click in their earnings call: CPCs were down 6% in Q2 2013.

adwords-cpc-down-six-percent

Do Enhanced Campaigns Work?

Okay, so “studies” and hilarious memes aside, one question remains: do Enhanced Campaigns work in an overall sense?

Now obviously, it depends. Some advertisers do great; others might do worse if they were relying on certain deprecated features. But on average, across a broader and more representative sample of clients representing the overall AdWords ecosystem, are we better off now than before?

If things were better, you might expect to see:

  1. Better Ad Performance: New features like extension management and call extensions in theory should enable marketers to create more relevant ad experiences — this should translate into higher CTR and lower CPC.
  2. Simplified Campaign Management: New bid adjustment modifiers for time, location and device mean that we don’t have to do as many stupid repetitive tasks which should in theory save us time in managing PPC accounts.

Let’s find out!

Enhanced Campaigns’ Impact On Ad Performance

I looked at WordStream customer data to see what is really happening to performance since the mass upgrade to Enhanced Campaigns.

At WordStream, we work with over a thousand small, medium and large clients across different countries and industries — as a result, I believe our client portfolio is, on average, much more representative of a typical advertiser than other companies that might be more focused on certain high-spending verticals, like e-commerce advertisers.

The picture is much better than was predicted:

 ctr-enhanced-campaigns

In fact, as you can see, average click-through rate (CTR) has increased by around 10% since January of this year. That’s a huge increase. What could be driving these higher CTRs? I attribute this improvement to:

  • Easier Contextual Targeting Options: Enhanced Campaigns make it easier to customize ad creative based on user contexts.
  • New Ad Extension Types Only Available In EC: Ad extensions reliably increase CTR – for example, the head of Global Mobile search ads recently told me that when an advertiser uses click-to-call ads with call extensions and location extensions, they see an average CTR increase of 6-8%.

Better ad performance is good for everyone, so it makes sense that Google would implement changes that increase CTR.

Impact On Cost Per Click

Despite doomsday predictions calling for exploding CPC pricing, our view is that the CPC trend remains unchanged on a steady trajectory.

 enhanced-campaigns-cpc-impact

In the past nine months, I’m seeing that average CPC has fallen 9%. While more advertisers are opted into mobile today, this upwards pressure on CPC could be mitigated by an increasing share of lower prices for mobile clicks driving the overall average down, or because ad inventory is increasing faster than demand, or increasing Quality Scores (which leads to lower CPCs), or other reasons.

Impact On Search Marketing Workflow

This is profound.

What’s happening here is that I’m looking at an advertiser’s account activity to see how many changes (such as adding new keywords, campaigns, ads, etc.) the average account manager has logged in the last 30 days. I then turned this data into an “account activity index” by normalizing the absolute number of account changes based on the size of the account (since larger accounts are pre-disposed to doing more account optimization activity). Lo and behold, you can see that the trend over the last year is down by 16.9%.

 Account Activity Index

My read of this is that since you don’t have to keep cloning your campaigns every time you want to do something simple in the account, the result is that you don’t have to do as much work.

For example, it’s no longer a best practice to create a whole new campaign just to target mobile devices – you can now target mobile traffic with the same campaigns, just by adding mobile-targeted ads and adjusting your mobile bids.

Since I’ve calculated this as a moving average, I’d expect this metric to continue to improve over time.

Crescent Interactive enhanced campaigns grumpy cat

Do Enhanced Campaigns Work?

So, do enhanced campaigns work? If the goal was to create better ads in less time, then yes, I’d say they do. But I guess it’s more fun to make fun of stuff than to be positive/constructive.

Mobile Search & Enhanced Campaigns Are A Huge Opportunity For Advertisers & Agencies

Enhanced Campaigns and related mobile search areas represent a tremendous opportunity precisely because so many advertisers still (wrongly) have the opposite view.

We’re seeing amazing client results — for example, Colombo Hurd, a law firm that was recently featured on the Think Google Website, saw that calls were 3 times more likely to convert to clients vs. clicks to websites.

Instead of wasting time bitching about Google, use the new opportunity in mobile to re-engage with past customer prospects, or to drive improved ROI for existing clients. Over the past few months, we’ve signed up hundreds of new customers.

Wouldn’t you rather be a success story than a sob story?

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: SEM | Google: AdWords | Google: AdWords: Enhanced Campaigns | Paid Search Column

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About The Author: is founder and CTO of WordStream, provider of the AdWords Grader and 20 Minute PPC Work Week.

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  • d_a_t

    Smart marketers actually predicted this would happen, such as RKG’s Mark Ballard in this Search Engine Land post:
    http://searchengineland.com/will-enhanced-campaigns-drive-mobile-cpcs-down-160690

  • Tally

    Those aren’t super clear trend lines… data still seems to be all over the place. We have experienced pretty significant CPC increases, so I do believe that impact may be very different depending on industry and/or competitive landscape.

  • Larry Kim

    yes by definition there are always values above and below an average. i’m just saying that the disaster scenario that was predicted by many sem experts hasn’t materialized in an overall sense.

  • disqus_dCF933DQO0

    There’s no real takeaway here and CTR% are up. In the words of Avinash – “So what?” I’d be more interested to take a look at conversion data and if it’s improved or suffered.

  • Patrick Bennett

    What would really be interesting to look at is how many marketers are actually using the new features of enhanced campaigns? Sure there are a lot of new improvements as you pointed out, but how many people got opted-in without changing their strategy, and how do their results differ from more proactive marketers?

  • Larry Kim

    great point. but conversion rates are largely impacted by your landing page and your offer (like product pricing, or product quality, or the aesthetics of your landing page, or whatever). in order to eliminate those external factors, most of which happen after the ad click has occurred, in this study i looked at click through rates as a measure of ad relevancy. i believe the great avinash would agree here.

  • Larry Kim

    yes indeed. great call, mark ballard from RKG! shame on all the other vendors…

  • Larry Kim

    what i can tell you is that advertisers are today 4x more likely to have a mobile ad strategy in place than before ECs (so stuff like call extensions, mobile preferred ads, etc)- however, the total percentage of advertisers with mobile ad strategy is still very low. around 20% of advertisers by our estimates. (but up from 5%!)

  • Ondřej Sláma

    Setting aside all the enhanced features (which in my mind just make some things easier to control, yet still don’t offer a complete solution for AdW accounts targeting different countries and languages), I still have trouble getting over the fact, that along with enhanced campaigns, Google started treating tablets same as computers. Guess what? We have clients who should focus mainly on tablets (sweet CPA, great volumes,..), but can’t…

  • Jeremy J Brown

    The aggregate data is one thing, but the impact for individual advertisers can be quite another.

    When a client has been really hit with lower ROI on tablets, do you respond that aggregate CTR is up? Is that consolation?

    Many of the changes were for the better, but not all of them. For many advertisers, performance is not the same on tablets (do you like filling out B2B lead forms on a tablet?). It was a mistake not to offer a bid modifier on legacy tablets (Ipads, Kindles, etc.) or offer a way to opt out of tablets.

    Don’t even get me started on the horrible performance of tablets on the Display Network. Direct ROI for tablets is abysmal there and has led to cutting Display budgets in some cases.

  • Daniel

    I normally like what comes from search engine land but this
    article is missing the fact that for the last 2 years I have been running
    mobile only ads and since the enhanced campaign I personally have seen all my
    mobile cost go up, mostly because everyone is forced onto mobile devices. So I suppose if you look at
    enhanced from the standpoint of running desktop ads, for the most part yeah you
    would SE a small drop in cost because mobile has historically been cheaper.

    But in many cases across industries I’m now seeing
    mobile CPCs that are higher than desktop CPCs due to the enhanced campaigns.

  • Larry Kim

    Hi Jeremy, you can still do device targeting on the Google Display Network. Meaning, you do not have to target tablets if you don’t want to.

  • Larry Kim

    I too am hopeful that they bring back optional device targeting in the future. In the meantime, there are some work arounds, like you can still do tablet targeting on the display network, etc.

  • Jeremy J Brown

    Larry, that’s not correct. Currently, there is no way to opt out of Tablets in Display or Search Network campaigns.

    If you attempt to set advanced settings in Adwords, you will get the following prompt:
    “When you select advanced mobile and tablet options, you opt out of desktops and laptops.”

    The only way to opt out of Tablets on Display is to opt out of spending any money on Display.

 

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