I’ve been following a thread by a frustrated would-be advertiser in the AdWords Help Forum, with some interest. He’s obviously spotted that Google have potentially created a niche, by suppressing so many adverts when they think that the paid search results are less appropriate. The search is “No Country For Old Men DVD” or similar. Most organic results are sales pages, or are reviews with links to buy.
Oddly, in the UK, two adverts consistently show up on a search for “No Country For Old Men DVD”. So these must be super-relevant? Something about the advertiser or the landing page or the AdCopy must have sneaked these past Google’s filters and reviews. I decided I needed to see what was special about these adverts. I clicked on each advert in the results below:
Absolutely fascinating… Here’s a clip from the Ice Gadgets Landing Page:
It has the keywords on the LP. It has a photo, and a YouTube clip, information about the movie and a low price. All good stuff that should excite a searcher to buy. What about the DVDCrave web site?
Eh? Follow a link from a search for one film, an advert for that film and you get shown a completely different film?
But other relevant advertisers are being suppressed?
What’s the point of denying relevant adverts, and allowing irrelevant responses to adverts, to be shown? I think it is a symptom of a deeper illness at Google.
Other Evidence
I have clients with highly relevant, high CTR adverts, and conversions (proof that search users found the adverts to be relevant and useful) who have had their businesses crushed in the latest round of changes. They aren’t getting more than a tiny fraction of the impressions that they used to have. The adverts that do run are getting CTR’s in the range of 11-60%. But the *volume* of searchers is now so low that the businesses are no longer economically viable.
What Is Google Doing?
Is this is economically criminal? The US mismanagement of poor quality loans is already endangering the world economy. Now, the world’s leading resource for directing online spending, appears to have started destroying businesses.
When your advertising system controls the flow of a substantial fraction of the online economy, you can’t just play with it the way that you want. It has a direct global economic consequence. Perverting the system the way that Google appears to have done, helps to reduce confidence – that intangible on which economic value is founded.
Google is directly contributing to a loss of confidence in small and larger advertisers, but not because the economy is tanking – it is because has deployed, unannounced, a new set of advertising rules that have destroyed the old AdWords model of relevance.
Idiots.
What possible reason would Google have for wanting to make paid search into a pointless activity?
Search History Permutation is a strange move, at least for niche advertisers.
Suppressing irrelevant adverts is a plausibly smart move. But the selection of what is irrelevant is clearly flawed, as conversions are being reduced.
If Google is going to trim down the number of advertisers, then it *MUST* make sure that those remaining are actually the best adverts. Otherwise the confidence of searchers will be destroyed, as well as the confidence of sellers.
Summary
I’m pointing all my clients to Yahoo, and MSN. I’m recommending that Google budgets are being *zeroed* until this monstrosity of madness has been repaired.
When Google can deliver an advertising system that is fair and rational, I’ll start using it again.
Look forward to more posting about Yahoo and MSN advertising behaviour – until now, they’ve been a minor part of our activity, so I rarely write up what I see there – they’ve been too small a part of the UK online advertising scene to be important, and while some of our US clients have Yahoo! accounts, it used to be the case that the core business was driven on AdWords results, with anything else being a bonus.
Now that AdWords is a statistically irrelevant advertising medium, Yahoo & MSN are *the* most important players in online advertising.
Updates
2008-04-07 Impression rates in clients are now trending up – but still sustaining higher AvCPCs. While I’d like to claim that impression volume increase is our smart management of accounts, I’m pretty sure that it is really more to do with changes made at Google’s end. There are still effects in damaged conversion – accounts with multi-year histories of increasing conversion volume and decreasing average conversion cost, saw damage in early March, which is now beginning to show signs of recovery – not caused by the 30 day accumulation of conversion. Looks like Google are correcting some of the excesses of the new algorithmic regime.
Moderated some of the language in the “Idiots” section as a consequence. I still think that the unannounced spanner that Google apparently dropped into AdWords is irresponsible.
Marco Bonanni wrote,
I’d like to see how much you would need to write an article on your blog about my website (http://www.freekii.com). I’m particularly looking to promote the online advertising network (http://ads.freekii.com). If you get this email me at fun@freekii.com
Link | March 26th, 2008 at 5:33 am
Jeremy Chatfield wrote,
@Marco – I don’t blog for pay. I blog because I get feedback from smart people, and it demonstrates to clients just how much thought and care goes into what we do.
Send me some email describing how you handle geotargeting and click fraud, and I’ll consider placing some adverts, and if I like what I see, then I’ll mention you anyway. Be aware that I will pour scorn on low volume advertising channels that offer untargeted adverts to repetitive clickers and make me jump through hoops to get click fraud refunds.
Link | March 26th, 2008 at 10:17 am
Epik Paul wrote,
Hi Jeremy,
I got to this post via, “..the frustrated would-be advertiser in the AdWords Help Forum,..”
I absolutely do not agree with your conclusions or many of the conclusions from the frustrated advertiser string.
First, you never mention Google’s Quality Score which should be addressed whenever we are talking about Cost or AdWords in general because it is such an integral part of AdWords. Also, although it is an automated system, it sometimes has hiccup and isn’t calculated properly.
Also, in your example for Old Country for Old Men, “So these must be super-relevant? Something about the advertiser or the landing page…” We never hit on the other advertisers who may have maxed their daily budget, or do not have the daily budget to show and potentially get clicks fro every search related to ‘No Country For Old Men’. Thus they show for every 100th search on 1000th.
Link | March 26th, 2008 at 5:06 pm
Jeremy Chatfield wrote,
Hi Epik Paul – QS – how does the number 1 advertiser on this search, an advertiser that appears in the coveted “Top Position 1″ on around 1 in 10 searches, have a landing page that blatantly fails the QS? Why are no Amazon or other affiliates present?
Actually, the *right* criticism of the article should be that the Display URL wasn’t addressed, nor account history – not directly any part of the obfuscatory “QS”. If Valeri is a new affiliate bidding against an established affiliate sharing the same Display URL, then even a $100 bid may be insufficient to get impressions.
However, the signature here is the same that I’m seeing; in all clients AvCPC is rising; for some clients (niches) relevant impressions are declining; across the board conversion volumes are decreasing, even for advertisers that have sustained high CTR and long account histories (multiple year histories). This is borne out by comScore reports – declining click volumes, declining count of adverts. It has an effect on advertisers, and search users; while increasing page relevance *should* help, if there are niche advertisers with decent conversion rates it shows that the Google analysis of what makes for a good page is, perhaps, an economically inadequate interpretation.
Google is reducing advert impression volumes by limiting advert counts on specific types of search – that has *nothing* to do with QS. Users who were buying via paid search are now, presumably, buying via organic search or from the fewer selected advertisers that are being shown in the reduced listing opportunities.
That’s *NOT* QS. Nothing the advertiser can do will increase the number of slots. If the advertiser addresses a niche, e.g. 1% of searchers are in the segment, that advert may get a low CTR but a high conversion rate. Google has sacrificed some high converting adverts to only allow a few established advertisers to get exposure. That’s less helpful for users, not more helpful.
Link | March 27th, 2008 at 9:13 am
Paul Evans wrote,
Jeremy,
Just came across your blog, and sad to say it reflects my experience of AdWords.
I am advertising in a crowded marketplace, against many cookie-cutter websites. I had tried to be different, add relevant quality copy, helpful information, all those things that are meant to make a difference.
And what is the only way I can get my number of impressions up? Increase the CPC and daily budget. My ads are seen as relevant, they convert (fairly) well, I have targeted keywords, but the amount I have to bid to get my products seen is ludicrous.
I would point out that when my ad is shown it has a position on the front page, so it isn’t a problem of keyword, ad or bid. But somedays Google seems to refuse to even take all my money!
But when I raise my CPC (and daily budget) Google suddenly get very greedy and clean me out!
In the market I am in, most people are selling “cheap tat” with a much lower profit margin (in pure money terms, not percentage) than I am. So I can only assume that they are paying MUCH less per click than I am.
Google have raised the cost of entry into the market so high, I’d be better off taking a page in a daily newspaper than using AdWords. Indeed, I am sorely tempted to use my budget to directly target specific websites, rather than using the scatter-gun approach that seems to be AdWords.
Thanks for posting an interesting blog.
Link | March 27th, 2008 at 10:22 am
Jeremy Chatfield wrote,
@Paul – your link is “not child safe” – I should add a WP tag to show this… Hmmm….
Yes, I know the industry. Suggestion – are you registering people for email? I suspect that many of your competitors are relying on a “captured customer” to get repeat sales and amortising the value over that, rather than a cost-for-one-sale, that is, use the lifetime value of conversion. This can justify a higher-than-you’d expect click cost.
Also, have you “poisoned” your account? If you had a period, typically when learning, when you had a low CTR, you might have driven up the base price you pay. Annoyingly, the only real way to tell is to see how a new account, starting with your best shot, performs. Large businesses will migrate keywords to new accounts, a process sometimes known as “keyword rehabilitation” or “keyword recovery” to get a better AvCPC. Small businesses – harder to do.
You might also want to consider MSN (esp targeting MSN Personals), Yahoo, Advertising Exchanges and Domain Parks. There’s stuff to do after you’ve exhausted those, too :)
Link | March 27th, 2008 at 10:49 am
Paul Evans wrote,
Jeremy,
Apologies on the link being there – I hadn’t noticed that names linked directly to the website – feel free to remove it from my previous post.
I don’t believe I have poisoned my account – I did have a play in a different account before my current one – but it could well be worth a try again.
You could well be right about some of my competitors relying on the captured customer idea. In part because their products are so poorly made that they break.
We are trying to sell quality over quantity, which would suggest that we are probably incorrect in advertising on the generic keywords, and we should retreat into a quality/luxury niche.
I think what I have found is that AdWords is not a good place to try and educate people. If they already have a fixed idea of what they’re after, even if you are offering something much better, they probably won’t want to listen.
I think I will target those specific areas that I am trying to appeal to and also try out other areas such as MSN.
Paul
Link | March 27th, 2008 at 1:09 pm
Jeremy Chatfield wrote,
@Paul – Thanks. Yes – generally you’ll find education via advertising will need deep pockets. In marketing terms, you may be catching people in late phases as they get ready to buy, and shifting them backwards in the buying process, where they are researching again. You might consider changing the way that the site works, or use a different site – there’s no reason to have one-business/one-site. If you appeal to different segments or find that walk-ons work differently from paid search, then you do what you need to, to win the business.
Link | March 27th, 2008 at 2:35 pm
Epik Paul wrote,
Hi Jeremy,
You commented that clicks are declining, “…This is borne out by comScore reports – declining click volumes, declining count of adverts…” I presume you mean Google Clicks. That said the comScore report is suspect at best, SearchIgnite found the exact opposite to be true. http://www.mediaweek.com/mw/news/recent_display.jsp?vnu_content_id=1003717516
Additionally, initial reports from eMarketer etc. suggest that Search Advertising is as healthy as ever despite a U.S. economic downturn.
Link | March 27th, 2008 at 8:45 pm
Jeremy Chatfield wrote,
Ok, I’ve been seeking permission from my clients to aggregate data for publication. I see a decline. It varies by client, and it varies according to segmentation. Large clients are generally least affected. So the sample used implies the conclusions. I’m trying to get a representative sample of my clients. I probably could find a set where the combination resulted in increased impressions – but that would be an unrepresentative sample. On the basis of the evidence that I look at, I’d say that SearchIgnite had a biased sample set :)
You haven’t made any argument against my analysis of the buying process and the impact that Search History Permutation has on that. There’s not *one* thing that Google has changed, it is a bunch of factors. Sometimes, for some clients, they combine to dreadful effect. For others, the changes are visible but the results are more complex to describe.
Link | April 1st, 2008 at 9:44 am
Dan wrote,
Great story.
Google won’t see a penny more of my Company’s million-dollar plus marketing budget until they allow ME to decide what’s relevant to my business and what’s not.
And to punish/poison an AdWords client for experimenting with keywords is inexcusable. How are we supposed to learn?
Google’s ego has gotten out of hand.
Link | April 1st, 2008 at 10:32 pm
Jeremy Chatfield wrote,
Hi Dan, if you have a sizeable budget, you do what other companies with your size do… open several accounts and migrate the damaged keywords to a new, clean account. While there does appear to be some stain affecting low performing web sites, a poor history in an account attaches more to the keyword. This performance factor has been around since at least 2005 – it isn’t a new feature. I’ve been in the strange position of having two clients with a shared ownership, tackling different segments in the same market – so I’ve been able to see differences, even at the level of impression rates for the same keywords, based on the account performance.
You aren’t going to get transparency. How Google controls the value extraction from the market is partially a result of their asymmetric information holding. They are the gateway to value. Making changes that can cause a single keyword to vary in impression volume by a factor of five over a few weeks, when other market signals indicate that the demand is unchanged, without any announcements and even offering denials of changes, is quite reprehensible, IMO.
I am aware of the statistical flux of the Internet. I’ve been using it since the 1980′s. I have a degree in Cybernetics. I’ve run large scale experiments with noisy data (200+ houses, with more than a thousand sensors, for several years). I know noise. I *like* noise and signal extraction. There’s a signal here, which is that the Black Box has changed the transfer function.
Link | April 2nd, 2008 at 10:30 pm
Dan wrote,
I appreciate your thoughts, but you have to realize that while your technical background is most extensive and impressive, you do have consider the marketer’s point of view.
In every other medium, the advertiser controls the message, who sees, what price they pay. The vendor, whether it be newspaper, radio, tv, outdoor – has no place or business in deciding what ad is worthy of space, and removing ads because they feel it’s not relevant. This is the height of arrogance.
Imagine if a newspaper said “No, you cannot advertise in the sports section, because your ad isn’t relevant to people who read sports.”; or perhaps a a radio station executive tell a person “your ads cannot run on our talk station, your product has nothing to do with the content of our talk shows.”.
Similarly, can you imagine a radio station or tv station saying “Well, we are going to increase your ad rates on all future campaigns because those ads you just ran didn’t produce enough results.”? Crazy! Yet Google is doing just that. Any Sales Manager in the country for any medium would be fired instantly for saying such a thing. While the vendor does care about your success, they won’t punish your or make you reopen your doors if you have a campaign that performs poorly.
And finally, what mass media company would have the audacity to tell a business how to design, decorate, stock or even locate their store? Again, Google does.
It’s entirely absurd. Google doesn’t know the first thing about my business, our marketing plans, or who we want to reach. Google hasn’t spent the last 15 years fine-tuning marketing campaigns that are demographically and psychographically targeted to specific markets. They are a channel through which we can reach potential clients.
Google’s stock has dropped nearly 40% in the last six months, from over $700 dollars to just $450. This decline will continue until they stop pretending that they know everything about everything. I, like most Marketing people, don’t have the time to hassle with a company that is so self-righteous and egotistical. There are plenty of mediums out that would love a piece of the pie; and now thanks to Google’s policies, they’re going to get it.
Best wishes to your Jeremy.
Link | April 3rd, 2008 at 4:22 pm
Jeremy Chatfield wrote,
@Dan – Hmm – I’m offering you techniques to use the existing system. Not advocating that it is right. If you read the rest of this blog, you’ll see that I rant against assumptions that Google makes for how advertisers and would-be purchasers use it. There seems to be no proper understanding of how searches evolve and the interaction of search with the buying process, etc.
I tend to agree with you. I’ve got clients who have seen impressions crash, but who were getting leads at a viable rate. After the latest round of changes, they don’t get the business, because they aren’t being shown on relevant searches, at Google’s whim. Most of those suffering worst from the changes have niche markets, and look for less than 1% of the audience that uses a specific keyword. They have a built in low CTR, but can pay a lot, because the service is valuable to that segment – so they used to appear. That low intrinsic CTR doesn’t invalidate the advert, and does help the small percentage of searchers who want to see that one niche advert. That this skinny subsegment of the audience want to see it, is borne out by the high conversion rate. However Google apparently only looks at the clicks. Clicks are revenue, and IMO, Google appear to be trying to optimise revenue, not sales or businesses. It’s the Nash Equilibrium, played out in advertising – they seem to think it is a numbers game, not a psychology game – Macroeconomics rather than microeconomics.
I’ve already started pushing my clients towards alternatives – I expect to write up some of the experiences. ;)
Hope to hear your lucid thoughts here again :)
Link | April 3rd, 2008 at 7:07 pm
Jeremy Chatfield wrote,
@Dan – thinking further… The key difference between this new and still immature market in keywords and impressions and the older media, is third party oversight. ABC and similar entities provide a third party assurance to advertiser and publisher. Google doesn’t have that – comScore and the like sample the data, and the data sets are so huge that effective oversight and fairness guarantees simply can’t be offered – with the industry organised as it is. It needs advertisers to force Google to come to the table and deal straightly with them, rather than hiding behind magical utterances of power. “It’s the Quality Score, guv” is not an adequate explanation, nor does it allow the market to optimise… I’ll probably think more about this… thanks…
Link | April 3rd, 2008 at 7:12 pm