January 3, 2018

PPC 2017: Big, fat review of the year’s biggest trends & updates in paid search

This year, AI and machine learning permeated through nearly every paid search update

As we trim turkey-fed waistlines & slowly betray New Year's resolutions, turning our attention to the next 365 days, here’s a whirlwind look back at some of the key developments in PPC for 2017 that will continue to inform our work in 2018.There wasn’t a seismic change that dominated the landscape per se, like expanded text ads of 2016, but last year machine learning and other forms of AI positioned themselves firmly at the epicentre of search marketing.Finally past the "year of mobile", this was the year of AI in search.Whilst there is still work to do improving mobile conversion rates & experiences, last year the big shift was the extent to which machine learning and other forms of artificial intelligence infiltrated all things search. They covered everything from keyword matching to ads to audiences to spend pacing to attribution:In March, Google shattered the meaning of ‘exact’ in exact match, stretching it to include close variants of a keyword with different word order and/or function words.Google’s Smart display campaigns are nearly entirely powered by machine learning.Google’s data-driven attribution methodology is entirely AI-powered. It’s been in AdWords for more than a year, but it gained new attention with the introduction to Google Attribution.Google and Bing released new automated bid strategies: Bing’s Maximise Clicks and Google’s Maximise Conversions.Google’s move to let daily spend exceed up to 2x the budget relies on machine learning to try to predict trends throughout the month.Bing Ads is testing AI-powered chatbot extensions in search ads.Dynamic Search Ads in Bing Ads came to the US and the UK, with Google’s dynamic search keyword-less offering becoming a necessary complement to standard search and shopping campaigns as exponentially-growing longtail can evade a “classic” search strategy i.e outdated!Machine learning > A/B testingAnother subtle-yet significant shift was in ad testing methodology. All year, Google has pushed advertisers to move away from the A/B testing model of running two ads per ad group and manually assessing performance.Google moved to limit ad rotation options in August, making the push for advertisers to choose “optimise,” letting the machines choose the best ad to serve. Google’s Matt Lawson laid out in a column last year the argument for having at least three ads in an ad group: overall impressions will increase as Google’s algorithms will serve up the best ad based on the specific query.Advertisers shouldn’t be evaluating individual ad performance under this new rubric, but rather at the ad-group level of performance, say Google.To this end, Google rebooted its "Ads Added by AdWords" pilot in September. The ads suggestions test automatically generates additional text ads (for approval) in some ad groups. Again, the goal is to get more advertisers running more ads in their ad groups, even if Google has to do the work for them.Audience targetingDovetailing with the rise of machine learning is the steady progress in audience-targeting capabilities. Keyword intent may still be the calling card of search marketing, but audience targeting options continue to expand alongside keyword-less campaign types like Shopping and Dynamic Search Ads.The threat of Facebook’s audience-focused, people-based marketing approach made it a necessity for Google to loosen the reigns on its user data and shift to signed-in data for audience development and targeting. Some of the big moves in audience targeting this year:Google introduced in-market audiences and similar audiences to Search and Shopping campaigns in March, and consumer pattern targeting and life events targeting for YouTube and Gmail in May.Google’s custom intent audiences debuted in November for display campaigns.More offline data can now be used for first-party audience targeting as well. Earlier this month, Google expanded its Customer Match offering to include the ability to build retargeting lists based on customer phone numbers and addresses, not just email addresses.Attribution & Online-offline trackingWith more channels, more devices, more campaigns and more technology in play, attribution isn’t getting any easier. The biggest news on this front was, of course, the beta launch of Google Attribution. Google Attribution aims to give users a bigger picture of how their channels and campaigns — at all stages of the funnel — are contributing to the bottom line.The Google beauty of it is that the data can automatically feed back into AdWords or DoubleClick to inform bidding strategies. That’s the real motivation here; it’s not going to be the silver-bullet answer to everyone’s attribution challenges. From a Google campaign perspective, it will provide more cross-channel insights than AdWords or Google Analytics does currently.The other big news in attribution this year largely revolved around online-to-offline conversions.Google’s in-store sales measurement news was the most notable. In one approach, retailers can upload their loyalty or other customer email lists into AdWords. The other approach is powered by Google partnerships with financial vendors. In-store sales conversions will automatically show up in AdWords when enough conversion data is available.Google's store visits measurement extended to YouTube campaigns as of May, giving retailers insights into how effective their videos are at driving viewers to stores.Shopping keeps growingGoogle got slapped with a giant antitrust fine by the EU for shutting competing comparison shopping engines (CSEs) out of Google Shopping (I took issue with the ruling like countless other search commentators/nerds).The influence of Shopping on retail search just continued to grow. Google and Bing saw continued growth in shopping ad spend, outpacing that of text ads among retail clients. But there’s an elephant in the room, and its name is Amazon. Amazon loomed in terms of being a head-on competitor in Google Shopping, in terms of the rapid and expanding build-out of ad offerings for merchants on its own site, as well as in the realm of product discovery and ordering via digital assistant.For its part, Google continues to experiment with the way it displays shopping ads. Below is an example of an elusive Purchases on Google ad, but these ads also have a new “Quick view” feature that lets users learn more about the product and seller right from the search results.

Google continues to search for new places to extend Shopping ad inventory, and is testing showing product ads on the Display Network.Local, driven by mobileMobile, voice and digital assistants will continue to spur innovation next year, but perhaps in no area greater than local. Last year, Google said local searches are growing 50% faster than mobile search overall and account for one-third of mobile searches. Those habits are driving the development of search ad products aimed at connecting users to local businesses (thus the increase in online-to-offline attribution capabilities).Though not ad-related, Bing launched bots for local businesses in Bing Places in May that also work with Facebook Messenger and Cortana.

Google rebranded and expanded its ad products for local service providers. Local Services by Google will be in 30 cities as of year-end.Location extensions and store visits measurement extended to YouTube in October.Text ads and Local Inventory Ads (LIA) began showcasing in local knowledge panels in Google Search results.

Honorable mentionsWe can’t close out a 2017 wrap-up without mentioning the new AdWords interface. There is a degree of resistance faced adopting the new UI, which is expected to become the default interface at some point in 2018. There are many, many features now that are only available in the new UI, including Showcase Shopping.As further proof that 2017 was one LONG year, some updates that feel much older than they actually are. Do you believe us when we tell you Google switched to the green outline Ad Label this year (February)?So without further ado, we will bid adieu to 2017. Mobile is now fundamental, with local setting the precedent, and we’re still in our infancy for voice and digital assistants in terms of marketing potential, but we expect this area to rapidly evolve through 2018.Alexa, end this blog post...

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