Fellow list member Albert Roig Martin invited me to his PPC podcast to share my thoughts on “PPC in the new year.”
Here’s a transcript of my thoughts:
“As we’ve seen, Google has been pushing AI automation a lot further in 2022. Examples include the complete switch to RSAs, the push for Performance Max, and for instance dynamic asset creation with Google automatically adding images from your landing page as an ad extension.
In 2023, Google is going to continue on this road with more automations coming our way, and less strict targeting capabilities for us. The reason Google is doing this is it wants to see more advertisers competing for inventory that is more “up in the funnel.”
Traditionally, Google Ads advertisers have been competing for high-intent clicks in the bottom of the funnel; clicks from the search result page for keywords with high intent.
Most advertisers were reluctant to spend significant budget more up in the funnel because more up in the funnel it is much more difficult to discriminate between clicks that convert and those that do not. If we were to do so, the short term returns would be much lower and that kept us from expanding the Google budget.
Now, Google is training its AI to learn what upper funnel clicks will convert, and thus allow many advertisers to start spending budget on inventory that it couldn’t monetize in the past.
I think that’s the main reason for Google to move to more automation in 2023 and less control for us — because it allows the Google AI to learn what works and what doesn’t. For many advertisers, this is a good thing… after _a while_ the machine has learned to discriminate between clicks with high probability to convert and clicks with low conversion probability.
However, machine learning goes by trial and error. And Google is making the advertiser pay for the errors. This is where the role of us PPC experts comes into play, and this role is only going to be more important in 2023.
I think savvy advertisers will increase automations, and layer them on top of Google’s AI to make sure the AI stays within the boundaries of what we as advertisers accept. Concrete examples of this would include:
– proactively negating search terms and excluding display placements before they’ve accrued a lot of unnecessary ad spend
– using scripts to regain control over the exploration versus exploitation balance that dictates the speed of learning and the fee we are willing to pay for the algorithms to learn
– using scripts to alert us if Google is making any unwanted automated changes in our account (remember the move to DDA in 2022?)These examples are especially relevant with respect to the upcoming recession, because it allows PPC professionals to weather the storm by regaining some control and rebalance short term profitability over long term growth.“
Here’s a link to the podcast episode, with my segment starting at 01:16:40 (initially in Spanish): https://ppccast.com/podcast/126-repasamos-2022-y-pensamos-en-2023-con-la-comunidad/
Want more thoughts on 2023? Let me know.
– Nils