The Enhanced Campaigns Waiting Game

Like many of my fellow PPC colleagues, I feel uneasy about the impending move to Enhanced Campaigns and the lurking cutover deadline of July 22nd.

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.