• Buckle Up; AdWords Could be a Bumpy Ride for the Next 3 Months

    bumpy rideGoogle recently announced their elimination of ads in the sidebar on the right, and  for “highly commercial queries”, the inclusion of up to four ads on top of organic results (often you’ll also see a few ads at the bottom of the screen, but those aren’t going to get many clicks).

    There are a variety of opinions I’m seeing in the industry on what the impact will be; probably the best supported one is Larry Kim’s great recent analysis of WordStream customer data, where he points out that this only affects 14.6% of desktop clicks, and concludes essentially this is not going to be a big deal.

    While I agree this is less of a big deal for B-to-C companies, who rely more heavily on mobile traffic, for B-to-B companies who often bid way down (or bid down entirely) on mobile traffic…the desktop landscape is much more important.  That percentage has to be higher for B-to-B keywords.  And it only takes a few advertisers on each keyword to panic to cause some pain for everyone else.

    Larry’s data showed not much change, but I think it’s too early (he does say “yet” in one of his graphs).  Account managers have just not had enough time to react to what is happening yet.

    I’ve been doing some bid management recently across a number of B-to-B clients, and I’m seeing something of concern; keywords that moved up in position from January to February…but lost 30% or more of their impressions. After doing a lot of searches on the keywords myself, I believe this is largely due to Google’s change.

    Let’s do a quick thought experiment on what is going to happen here:

    1.) Businesses that have relied on cheaper clicks in positions 5-10 are going to lose lots of impressions, and clicks.
    2.) The account managers for those businesses will then freak out.
    3.) They will bid up, and will shoot for position 4.
    4.) CPCs will rise across the board, as their competitors then react, bidding up…you get the idea.

    This will take a few months to play out fully, as marketers examine reports and go in and do bid management.

    Note that even mobile bids are not immune to this change; think about it. How do you raise desktop bids? By bidding the keyword up. Oh, that’s right, there’s no desktop bid modifier, I have to bid *everything* up, and then remember to go back in and now bid my mobile traffic down slightly to compensate.

    So I predict there is going to be a lot of churn across the board, CPCs are in general going to rise, mostly for desktop and for B-to-B keyword markets, and Cost-per-Conversions are going to go up. I think by the summer it will be pretty settled and then the fall will be sort of a “back to normal” mode where account managers can focus less on bid management and more on other things. But for now, I believe putting extra attention on bid management is essential.

    What Should Account Managers Do?

    Well, here’s what I’ve been doing – I’d be very interested to hear approaches others are taking:

    1.) Identify keywords with average positions of 3.5 or lower that have lost signficant impressions (hit “Compare” for the dates, and make sure you pick 29 days in Feburary versus 29 days in January).

    2.) Compare their bids to their recommended “top of page bid” (you’ll have to add it under “Columns” to see it).

    3.) Bid them up…in some cases to that value, but I don’t think the recommendations are always very good; I would use it as guidance.

    My preference is instead to bid up on a percentage basis based on what % of impressions were lost. For instance, if you lost 30% of impressions month-to-month, bid up say…20%. If you lost 10%, bid up say…5%. That sort of thing.  Yes, there’s seasonality between January and February – you could look in Google Trends or get some data from the keyword planner…but in general I think this is a reasonable strategy for anyone with a significant number of keywords to deal with.

    4.) Additionally, consider pre-emptively bidding up all keywords below position 3.5  by, say, 10%.

    The reason why I like to focus on position 3.5 or lower as a threshold is, in position 3.5, your keyword could be in position 4 all of the time….or it could simply be above 3.5 half the time, and below 3.5 half the time.  As Bradd Libby once pointed out, Average Position is a Really a Perverse Metric.

    5.) Don’t forget to go in and adjust mobile bid modifiers *down* to compensate after this is all done.

    6.) Monitor bids closely and plan on reacting to your competitors reactions.

    7.) Plan on reacting to your competitors reactions…to your reaction…to their reactions 😉

    What are You Doing About This?

    How are you handling this transition – how is this affecting your bidding strategies? Anyone bidding down much?  Yeah, I didn’t think so!

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