One of the “features” of enhanced campaigns is that your campaign can now run on desktops and mobile devices with different CPCs that are controlled by bid modifiers. However, since your ads can be run on multiple devices at the same time, you need to test your ad metrics by device.

This can easily be accomplished with device preference and Excel filters. First, let’s discuss why this change needs to occur, and then, how to control the ad serving to ensure you are testing your enhanced campaign ads properly.

Why The Testing Change?

Let’s say we’re testing two ads and that we’re running both ads on all devices (desktops/tablets and mobile devices). What happens is that after a while, we check our metrics and we see data that looks like this:

If you simply used this data as-is, you would assume that Ad 1 is the best ad overall and go with that ad.

However, averages hide all the useful data. You need to segment your data to truly understand what is happening. If you were to segment these two ads by device type, the data looks much different:

In reality, Ad 1 is not the best ad — it is the best ad on mobile devices. The best ad on desktop devices is Ad 2.

Therefore, you’d now want to control which ad shows on which device, and this can be accomplished with device preferences.

Device Preferences

When  you create a text ad, you can specify the device preference:

If a campaign is set to show on all devices, and you have not set a preference by ad, your ads will be shown on all devices.

If a campaign is set to show on all devices, and all your ad preferences are set to mobile, your ads will be shown on all devices.

To control the ad serving by device, you need both a mobile preferred ad and a non-mobile preferred ad in each ad group. To test ads by devices, then you need at least two mobile preferred ads and two non-mobile preferred ads in each ad group.

Image Ad Preferences

In “legacy” campaigns, most sophisticated accounts would segment their display advertising from their search ads, and their mobile display campaigns from their desktop display campaigns. Because these campaigns were already segmented by device, most marketers would just upload “mobile” ads to their mobile campaigns and desktop sizes to their desktop campaigns based upon Google’s sizes:

However, several of the sizes that are not traditionally considered mobile ad sizes can be shown on mobile devices:

Therefore, you will also want to specify the mobile preference of an image ad so that you can test your image ads by devices as well as your text ads.

An Easy Way to Determine Ad Types by Device

In the AdWords interface, it is not easy to see if you have a mobile and non-mobile preferred ad in each ad group. The easiest way to see this data is to use a pivot table and conditional formatting.

In this case, a simple pivot table was used to show the number of ads by device preference in each ad group; and then, conditional formatting was applied to highlight any cell that was less than 1.

If you wanted to make sure you were testing in each ad group, you could also highlight all cells with less than 2 ads using conditional formatting. This would allow you to see which ad groups need ads created so that you can test them.

Run Your Statistical Confidence Numbers As Normal

Once you have the ads set up and running by device, you can do your statistical confidence calculations and pick your winner — just make sure to segment the information by device.

Only use your mobile information to test your mobile ads and pick winners.

Only use your desktop information to test your desktop ads and pick winners.

Once the data is segmented by device, the way you run your numbers and pick winners will not change with enhanced campaigns.

A “Cheater’s” Way Of Testing

Creating thousands of new ads can be a daunting task — so, there is a shortcut you can use. However, please note that, as with any shortcut, there are some underlying weaknesses.

Instead of creating ads for every device type, if your landing pages have the same content (such as with responsive design) and if overall conversion actions by device are the same, then you can start with just ads on “all” devices. You can then segment the data by device type and run your statistical confidence by device.

Once you have a winning ad by device, then you can change the ad’s preference type of mobile if it’s a mobile winner and leave the desktop winners as all devices.

There are a few inherent weaknesses to this approach:

• You cannot customize the call to action by device
• When you “edit” your winning mobile ad, it must go back under review and the stats are “reset” for the ad

This isn’t an ideal long term solution; but, if you are trying to transition many campaigns and thousands of ads to mobile devices, it can be a way to start ad testing.

However, with a “good” transition, you will keep your mobile ads in your enhanced campaign by moving the mobile ads to your desktop campaigns (or vice versa) and using ad preference to keep them segmented.

Wrap-Up

Enhanced campaigns are a major change to managing AdWords. However, they do not change the underlying principles of ad testing. You must test ads — and a good ad test will not only examine the differences in multiple ads, it will also take into account segmented data such as the device where the ad was displayed.

By ensuring you are controlling your ads displayed by device type, you can be confident in your ad tests and ensure that you are keeping the best ad for your account.

Even with device segmentation, many of the previous columns on ad testing are still true – they just require a previous step – device ad control. You can still easily manage and test millions of ads and use cross ad group testing principles.

Indeed, for many advertisers and many verticals, SEM may no longer be the best channel for laser-focused advertising. In this article, I look at five types of online targeting and compare the functionality of SEM versus two other popular marketing channels – self-serve display advertising (Google Display Network) and programmatic display advertising.

Types Of Online Targeting

Before I delve into the specific targeting features of online marketing channels, let me suggest a framework for evaluation. Broadly speaking, there are five types of online targeting currently available to online marketers:

1. Query – what is the user searching for?
2. Location – where is the user located?
3. Time – what time of day, day of week, and time of year is it?
4. Device – are they on a mobile phone, tablet, or computer (and what is their operating system and carrier)?
5. Behavioral – who is the user, demographically, or psychographically? Note: this is the broadest of my five factors, since I’m including data like offline purchase behavior and social sentiment in this category – over time, I could see this factor broken into several separate groups as targeting matures.

Round 1: Query-Level Data

Query-level targeting has always been the selling point of SEM, and AdWords (and Bing/Yahoo, of course!) are still the clear champions when it comes to targeting users based on queries. That said, GDN does interpret the semantic relevance of a website to allow advertisers to try to use query-level data in display; and, third-party search retargeting companies like Chango, Simpli.fi, and Magnetic offer query-like targeting throughout the display ecosystem.

But let’s face it, query-ish display targeting still pales in comparison to the real deal – SEM! If you are marketing an established product (i.e., something people would be searching for), SEM should be your most important channel.

Winner: SEM!

Round 2: Location Data

Location targeting is vital for local businesses with limited geographic reach, but also very important for any business that might see differences in purchase behavior by geography. In general, geography can be inferred by one of five ways:

1. Geo-modifiers in a query (e.g., “Chicago mortgage rates”)
2. The IP address of a user’s device
3. The semantic content of a page the user has recently visited
4. A user’s self-defined location when s/he registers online (such as signing up for a Gmail account).
5. First-party or third-party data

AdWords uses all of these geographical inferences except for first - or third-party data – when targeting users on desktop search. This is both good and bad news. On the plus side, Google has a lot of different ways to infer a user’s location, which can be helpful when someone a block from your pizza restaurant searches for “great pizza restaurants for lunch” and you want to market to them.

On the other hand, if Google uses the wrong inference to target the user (e.g., the user is registered on Gmail in your home town but happens to be 50 miles away when doing the pizza search), you might end up with unprofitable geo-targeting. Google has rectified this dilemma – at least to a degree. AdWords now allows advertisers to choose whether they want to target only users who use a geo-modifier, or who are in a specific location, or both.

While GDN and Display cannot use geo-modifiers in a query as accurately as AdWords, they do allow for better usage of first- and third-party behavioral data. To clarify what these two forms of data are, first-party data is information collected directly by an advertiser (i.e., if a consumer has purchased something in the past from you), while third-party data is generally anonymized data collected and sold to the advertiser (e.g., based on our data, this user buys a lot of dog food).

GDN allows advertisers to access a limited set of third-party geographic data via their “interests” and “topics” functionality. In the example below, you can select people who are “interested” in a particular geographic region of California (which I assume is more or less synonymous to that person living in that region):

You can also “sort of” use first-party targeting in GDN via remarketing. For example, if you have pages on your site that are geo-targeted (for example, “Mountain View pizza directions”), you could, in theory, limit your GDN advertising exclusively to people who visited that page via remarketing, effectively creating a Mountain View-only campaign.

Ultimately, however, this quasi-behavioral targeting on GDN pales in comparison to what is available to advertisers via programmatic display buying on ad exchanges. Sophisticated display advertisers leverage “data management platforms” to leverage reams of first-party data and multiple third-party data sources to create hyper-local campaigns directly targeted to specific user groups (or even individuals).

In other words, in a well-executed display campaign, it is possible for the advertiser to actually know the user’s home location (via first-party data), broad interests (via third-party data), where they are currently located (via IP address), and – to a lesser extent – the geographic nature of the content the ad is appearing adjacent to.

Given the high relevancy of geo-modifiers in search and the equally high accuracy of first-party data in a programmatic display campaign, I’m calling this one a tie between AdWords and Programmatic Display (sorry GDN)!

Round 3: Time-Of-Day, Day-Of-Week, Time-Of-Year

AdWords and GDN have decent day-parting functionality, though it is a bit buried in the settings (perhaps on purpose, so as to avoid melting the brains of newbie SEMs).  Effectively, you can make 49 automated bid adjustments a week by time-of-day or day-of-week (seven per day):

For most advertisers, I suspect that this is more than sufficient. That said, programmatic display buying does provide more time-based granularity via “real time bidding ” (RTB for short). As the name implies, RTB allows advertisers to make ad buy decisions every time an impression is available for purchase. In theory, this means that advertisers can make millions or billions of decisions within a 24-hour time period.

In reality, I’m not convinced that demand side platforms (DSPs) – the technology that programmatic buyers use to buy advertising in real time – are truly analyzing whether an impression at 6:01 am and 6:02 am deserve different bids based on time-of-day, but there certainly is more time-based functionality available via display than the 49 time slots currently available via AdWords and GDN.

That said, it’s important to note that Google’s conversion optimization tools – the “conversion optimizer” on AdWords and the Display Conversion Optimizer (DCO) on GDN – do make changes to bids in real time, and have the potential to adjust bidding more than the 49 times you are allowed via the self-serve tool.  So, in a way, AdWords and GDN advertisers do have access to an RTB tool, just without the ability to make manual adjustments that a display advertiser can make with a DSP.

Results: A Three-Way Tie! (Overall Score right now is AdWords: 3, Programmatic Display 2, GDN 1)

Round 4: Device Targeting

Once upon a time, AdWords and GDN had AWESOME device targeting. It seems like it was so long ago . . . Unless you have been living under a rock without Internet access, you should know by now that Google’s new “Enhanced Campaigns” settings will effectively remove almost all the device granularity previously available to advertisers. Just to show the difference graphically, here’s the before and after functionality:

Before:

After:

It turns out that the level of targeting Google used to offer was superior to the current targeting available in programmatic display buying; but, as a result of enhanced campaigns, programmatic buying is now the superior targeting option. With programmatic buying, you can still target users by device and carrier, something that is now not available in AdWords.

So, with a heavy heart, the winner in this category is: Programmatic Display

Round 5: Behavioral Targeting

Going into the final round, we have a two-way tie for first place – Google 3, Programmatic Display 3, and GDN 2. It’s still a wide-open race!

Behavioral data in AdWords is limited to non-existent. To my knowledge, Google currently does not allow advertisers to leverage third-party behavioral data in their search ad buying (though I have heard rumors of betas that do this). On the first-party side, the only way to leverage actual knowledge of user behavior is to use remarketing lists for AdWords, but – as with Google’s other remarketing products – this is only first-party in the sense that you know a user visited a page of your site.

GDN goes a step further than AdWords by providing the aforementioned “interest” and “topic” third-party targeting options, though you are limited to Google’s data only (not the case with programmatic buying). And, on the first-party side of things, you are limited to remarketing only.

Programmatic display buying has an advantage over AdWords and GDN on both the first-party and third-party behavioral side. First-party data in programmatic buying has the potential to be much richer than just retargeting – for example, a retailer could target sets of users based on a “recency, frequency, and monetary” methodology, with the data derived from actual customer purchase behavior. On the third-party data side, there are dozens of behavioral data companies more than willing to sell advertisers slices and dices of data.

The winner of this round, with a technical knock-out, is Programmatic Display buying.

Tallying Up The Scores!

The final result: Programmatic Display 4, AdWords 3, GDN 2 – congrats to programmatic display buying! Now, before you go and scrap your SEM campaigns and dedicate 100% of your resources to RTB and DSPs, let me state for the record that there are still many – many! – products and services that will perform better in SEM than in display, simply because SEM is almost always at the end of the conversion funnel, and display is often closer to the beginning.

The best result for almost any campaign is to max out SEM to capture folks in the last stages of purchasing, but to also identify targeting upstream opportunities on GDN and programmatic display to fuel additional demand.

I recognize that this has been a bit of an epic post (anyone out there still reading?). For a graphical description of the targeting benefits of each of these channels, check out the image below or download the chart here.

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.

#1 Use Credibility Indicators

Include credibility indicators on your landing page such as testimonials, reviews, awards, social media information (Facebook likes, number of tweets, etc.), and seller ratings (on Google, this info is pulled from Bizrate and other rating sites).

Here are some specific ideas related to testimonials:

1. Use testimonials to reiterate your company’s core value propositions. For example, consider prominently featuring one extremely compelling testimonial, in larger or selectively bolded print, above a few smaller-print ones further down the page. Whether this featured testimonial is from CNN, NYT, or a particularly eloquent customer depends, of course, on your track record, business, etc.
2. In general, testimonials work better for emotional/personal/edible/retail items. Using citations in publications and expert opinions are better options for products like art, theater and software solutions.

#2 Incorporate Product Badging

In 3 Neuromarketing Considerations for Landing Page Optimization, I covered neuromarketing and how the reptilian brain prefers fewer options. A great way to reduce the number of options and highlight a single or only a few options is to use product badging. Below is an example from unbounce.com and they highlight the Pro plan with a “best value”:

Here are some other badging options:

• Top Rated
• Best Seller
• New Arrival
• Top Pick, Top Seller or Hot Seller
• New
• Great Gift
• Etc.

#3 Remove Page Elements

Try removing page elements. While it is important to test various elements on a PPC landing page, testers must also make a concerted effort to remove elements that distract visitors. In general, cleaner pages tend to convert better than cluttered ones. Here are some suggestions for minimizing the clutter:

1. Remove elements that don’t add value to the #1 conversion goal of your page. For example, remove newsletter sign up options, links to other content, navigation on a page, etc.
2. Chop down ad copy and try incorporating bullet points on your page. Less content is easier to read, and copy pops against the white of a page. Take a look at this example from buyfolio:

#4 Test Your Copy

Vary your writing style, using tone and word choice to see what resonates with your audience. When testing copy, I’ll generally use the same overall paragraph components, but change a few sentences and talk about how the product might make different users/visitors feel. Remember, customers buy emotionally and defend their purchases rationally. Make it a goal to get visitors excited about your product or service and see what that does for conversion rates. There are plenty of clues in review information, or you can directly investigate what jazzes your clients (past or current).

#5 Take It Slow

Think about it: it’s not always the best strategy to go for the sale. It might make sense to break down your sales process into a couple of steps — perhaps get a little information at the beginning (like name and phone number or email address) then continue the conversation and building the relationship via phone or email. Taking time to build rapport can really help boost conversion rates and is particularly valuable in a B2B or high-ticket sales situation where sales cycles are longer. In the context of dating, asking for the sale too fast is tantamount to asking someone to marry you after one date. Oy vey.

#6 Test Your Messaging

Evaluate your site by asking someone (preferably someone who doesn’t know anything about your company) the following questions:

• What specific services does your company offer?
• Why should they do business with you?

Go back and rework your landing page copy if users cannot figure out what your company is about in less than 4 seconds (the amount of time before people tend to bail on a page). Revised copy doesn’t need to be long copy, and bullet points are a great option to communicate marketing messages (as per #3).

#7 Use Banners

A great way to incorporate messaging into a page is to use banners and/or ribbons — not hard to do. Figure out why people should buy from you (you should have at least one USP) and put it on your page. Don’t be afraid to repeat it. Look at the example below from musicnotes.com — they have 250K sheet music arrangements (this is their USP), all of which are available instantly. Notice they repeat this over and over in different ways.

Don’t assume people know what you’re all about. Even Zappos, which is very well known for free shipping and returns, repeats this value proposition a couple times on their page. Take a look:

The above represent a few of the many tactics you can use for improving PPC landing page optimization. What strategies do you use? Sound off in the comments!

The maxim, “your data are only good until the data changes,” can be applied to ads, landing pages, placements and any data point within your PPC campaign.

The issue that needs to be examined, here, is the frequency of data changes and how that affects your strategy. Typically, ads do not need to be changed every few days. An ad or a landing page can perform well for long periods of time. The same cannot be said of bids.

Rarely do you have an optimal bid set for a keyword for a month straight. So, when you consider areas of your campaign where you can make long-term gains, they are not in bidding. CPA bidding is a short-term gain, but a necessary action; and when done right, it leaves the PPC manager free to spend more time focusing on these long-term gains and less time on bidding.

However, I often find a simple mistake with CPA bidding, or even with 3rd-party bid systems. Once CPA bidding (or a 3rd-party system) has been enabled, the PPC manager sits back and thinks his or her work is done.

For the purpose of this article, we will leave out all of the testing you should be doing regardless of your bidding methodology, and focus on making CPA bidding work for you.

I find that when CPA bidding fails, it does so for one of three reasons:

1. The campaign’s conversion data is sporadic by keywords and ads. An example is when you have thousands of keywords; but only 20% of them have received a conversion in the past 30 days; however, since all contribute to total conversions over the course of a year, you can’t really delete any.
2. “Best Practices” of account management are ignored because the bidding is being taken care of by Google.
3. It just doesn’t work for totally unknown reasons. I do see this happen on occasion, where everything is set up and managed perfectly, but for unknown reasons, the CPA bidding just can’t seem to get the bids correct.

Let’s look at four scenarios in which CPA bidding initially failed, but ultimately succeeded after applying some minor changes.

Scenario 1: Data Problems

This first example is one that amazed me. I was auditing an account that was using CPA bidding and discovered that the company had failed to set up conversion tracking on their mobile site. However, the campaign was set to all devices. It wasn’t immediately noticeable because desktop performance was high enough to ensure that CPA bidding had enough conversion data to keep running.

After using CPA bidding for three months, 25% of all traffic was still coming from mobile devices.

CPA bidding does take devices into account when setting bids. However, it rarely ‘gives up’ on a device; instead, it keeps trying to find a bid that will work. By just adding the conversion code to the mobile site, CPA bidding becomes much more effective.

The Lesson: Make sure all your tracking is set up correctly.

Scenario 2: Using Call Extensions To Create Goals

The second example features an e-commerce site. They were B2B e-commerce, so they did use the phone extension, as calls often converted into sales; however, they were all sales on the phone that were not put back into analytics to see the actual revenue per conversion.

When this company upgraded to an enhanced campaign, they liked the fact that they could count calls as conversions and thus, used the ‘report phone call conversions’ option in their account.

They continued to receive phone calls, but their CPAs climbed considerably for all e-commerce goals and were well above their target CPAs. While CPA bidding didn’t technically fail in this case (they were getting the calls, after all), the e-commerce manager was quite unhappy as the overall site e-commerce was declining, and there wasn’t any data to show them exactly what data points were generating the calls.

They disabled the option to report calls as goals. After the disabling, they still received calls (as they did before going to enhanced campaigns); however, their CPAs went back to their target goals, and all the conversions were actual e-commerce checkouts

The Lesson: If you are going to add additional conversions for CPA bidding, make sure you really want the optimizer working off of those goals.

Scenario 3: Keyword Expansion

The next lesson comes from a company that used CPA bidding for months. They were very much enjoying the bid system, and they had put so much faith into it that they just kept adding keywords and thought Google would figure it all out.

Every month, their CPAs went up; but not by enough that anyone was motivated to investigate. They just assumed it was bid pressure and kept adding more keywords.

After several months of expansion, it was time to give their quarterly report to the VP of Marketing. The CPA trend worried her, so she asked for a larger time frame for the CPA trend. Once she saw the CPA climbing for several months, she asked for a 3rd-party investigation.

The answer was quite simple. They were adding keywords, but they were not paying attention to the search queries of those keywords. Just by adding a few hundred negative keywords, the CPAs quickly returned to an acceptable amount.

The Lesson: You must still follow best practices of account organization, match type selection, query analysis, and adding negative keywords — even when using CPA bidding.

Scenario 4: Ad Copy Testing

The next example comes from a company that is great at landing page testing, but decided it was time to start doing more ad tests. So, they created a program for testing their ads, wrote lots of new ads, and put them live into their account.

Their CTRs almost doubled. But their conversion rates dropped nearly by half, and their CPAs rose more than 30%.

The problem? They were using Google’s default ad serving option: optimize for clicks.

If you are going to test ads in CPA bidding campaigns, you have two options:

• Control everything: use rotate indefinitely, watch the data, pick winners, delete losers, repeat.
• Know you’ll forget to end tests: in this case, if you are going to create multiple ads and then forget about them, use ‘Optimize for Conversions’ for your ad testing. With this method, Google will pick the ad with the best conversion rate and show it more frequently.

The Lesson: CPA bidding does not serve ads; it sets bids. If you are going to test ads — and you should — make sure you are using the correct ad rotation settings.

Conclusion

I find that more often than not, CPA bidding is highly effective. There are times when it fails, but that now seems to be the exception, even for low-conversion accounts.

Now, CPA bidding is great when you have a static CPA target for all keywords in each ad group; however, many e-commerce sites have a target ROAS instead of a target CPA. In that case, CPA bidding is rarely the best bid method to use.

Regardless, no matter how good CPA bidding is for you, if you don’t continue to follow best practices for optimizing your account, CPA bidding can often become ineffective.

Just because you have an automatic bidding system — either Google’s CPA bidding or a 3rd-party bid management system — that doesn’t mean you can stop working on your account. Those systems change bids based upon the system inputs. If you give them bad data, they will make bad decisions.

Using automated bid management is great. It gives you back the time you would have spent setting bids so you can make sure your account is optimized. However, you can’t abandon your account when you use such a system — you must still continue to follow best practices.

Indeed, when it comes to SEM, benchmarking seemingly plays a big role. It’s hard to go through any SEM conversation without the mention of “deltas” and “year-over-year” data being discussed.

I’ve noticed, however, that many SEMs only take benchmarking half-way – they benchmark their internal performance, but fail to properly benchmark their performance vis-à-vis competitors or the overall SEM marketplace.

To understand the difference, consider this sports analogy. You are an aspiring 100-meter sprinter. As such, you train relentlessly day-in, day-out. On your first day of training, you clock a time of 19 seconds. After one week, you’ve reduced your time to 16 seconds, and after three months, you are down to 13 seconds. From 19 to 13 seconds is not too shabby; that’s a delta of 32%! This would be what I call “internal benchmarking.”

Now, let’s say that you decide to try out for the Olympics. You register at a regional qualifier event, ready to take that first step toward a gold medal. The gun goes off and you achieve another personal-best, 12.5 seconds! Unfortunately, the rest of the field comes in at between 9.8 and 10.1 seconds, so they were already doing interviews by the time you crossed the finish line. That’s an example of “external benchmarking.”

Internal SEM Benchmarking – It’s Pretty Easy

There are tons of tools available to conduct internal benchmarking of your SEM accounts. Inside AdWords, for example, you can easily benchmark virtually any metric against the prior period, the same period last year, or even a custom benchmark by simply turning on the “compare dates” feature in the date range drop down, as shown below:

I also like the dimensions tab in AdWords, which doesn’t do “delta” benchmarking, but does allow you to compare days of the week, geographies, devices, and other levers quite easily.

A sample of some of the things you can benchmark via dimensions is shown below:

So, if you simply want to know whether your profit has improved versus the same time last year, or whether a certain geography performs better than another, basic tools available inside Google and Bing will give you good data in short order.

External Benchmarking – Ah, There’s The Rub

For a lot of SEM-driven businesses, year-over-year growth is not the ultimate metric of success. That’s right – you heard that correctly – your SEM profit could grow substantially year over year and that might actually be a sign of failure.

How so? Well, let’s say you are in a fast-growing industry, like mobile app development. If the market is growing at 100% a year but your business is only growing at 50% a year, you are growing your business but losing market share.

The same scenario exists in search engine marketing; if you are doing a B+ job of SEM management and someone else is doing an A+ job, that effectively means that you are underperforming relative to your competition.

The challenge with external benchmarking is figuring out if you are actually the B+ or A+ SEM. Unlike internal benchmarking – which, as shown above, is easily measurable through deltas – you can’t just ask your competitors for a login to their AdWords account and instantly determine who has the better-optimized account.

Here are a few external benchmarking techniques that can collectively help you arrive at a grade for your SEM campaigns:

1. The Lin-Rodnitzky Ratio. At PPC Associates, we’ve developed a simple way to calculate the health of an AdWords account, which we call the Lin-Rodnitzky Ratio(or L/R for short). The ratio is simply the CPA of all queries in your account with at least one conversion divided by the ratio of all queries in your account, regardless of whether a conversion occurred.

So, for example, if the CPA of 1+ conversion queries is $25 and the CPA of all queries is $75, the ratio is determined by dividing $75 by $25, for a score of 3.0. What we’ve generally found is that a well-optimized account has an L/R ratio of between 1.5 and 2.0.

Ratios over 2.0 tend to indicate excess fat in the account and ratios under 1.5 indicate an overly conservative account (usually too much focus on brand terms). You can learn more about the Lin-Rodnitzky Ratio here (pdf).

2. SpyFu “Kombat.” SpyFu has a nifty tool called Kombat that allows you to compare your keyword set and ad spend versus those of up to two competitors. While I find SpyFu (and all keyword research tools) to be “consistently inconsistent,” I like the Kombat feature because it is a quick way to see whether competitors are doing something that you aren’t.

For example, if two of your competitors are heavily investing in a certain set of keywords and you are not, that’s usually a sign that you are missing an opportunity!

3. SEM Growth vs. Industry Growth. As I noted above, if the growth of your overall industry is outpacing the growth of your SEM revenue and profit, that may indicate that you are not maximizing your SEM opportunity.

This is particularly relevant when you find that you always seem to be outbid by the competition for top keywords. In such an instance, you are either missing some SEM techniques (e.g., the right ad text to achieve good quality score, proper account structure, negative keywords, etc.), or your company is falling behind your peers (which is a problem that the SEM often cannot fix!).

4. SEM Growth vs. Other Channel Growth. If other marketing channels are rapidly outpacing the growth of your SEM campaigns, this might indicate a problem with your SEM strategy. I list this test last because channel growth is frequently driven by externalities that have nothing to do with the quality of strategy or execution.

That said, an SEM campaign that is consistently underperforming on a year-over-year basis against other channels may be a sign that some tweaking needs to be performed.

All Benchmarking, All The Time

SEMs are in high demand today because we are data-driven and ROI-positive marketers. We are “profit centers” instead of “cost centers” (hello, branding agencies!). As such, benchmarking is a key tool in any SEMs toolbox.

It’s time, however, for us to up-level our benchmarking game. Internal benchmarking alone is reminiscent of Plato’s allegory of the cave; without external comparisons, it is impossible for us to differentiate between true success and the illusion of success. It’s time we all leave the cave!

The context of George’s remarks was setting expectations with client C-Level executives and educating them about what is and what is not possible with online marketing campaigns.

Maximizing PPC ad spend and managing to best ROI are usually conflicting goals.

ROI Targeting Differs From Budget Targeting

The reason these two goals are generally incompatible is that ROI targeting takes the dynamics of the auction into account and lets the ROI dictate the amount of ad spend. Spend rises and falls based on your ability to deliver profitable results. When you are told you must spend to a specific budget, your budget actually influences the dynamics of the auction and your ability to optimize CPAs.

For example, if you are given an extra $100K and told to spend it this month, you only have a few options available to you in the short term. You can increase bids to get more traffic from higher positioning; but, you’ll pay more for that traffic. You can also allow more budget to flow to your marginal campaigns, which also degrades your ROI.

If on the other hand, your budget is constrained, then you are forced to make decisions like advertising only on your brand terms, slowing down the pace of your ad serving by using standard ad delivery, or simply letting your campaigns run out of money before the end of the month, allowing your competitors to reap the benefits of your dropping out of the auction.

I think that most SEM pros and corporate CEOs would agree that managing PPC campaigns to ROI targets with unconstrained budgets is the ideal budgeting scenario. Common sense seems to suggest that if your paid search campaigns are improving both revenues and profits, you would want to spend as much as you can to keep the good times rolling.

Unfortunately, the reality (and unreality) of corporate accounting and planning structures often dictates that short-term budget targets are cast-in-concrete and to be met at all costs, regardless of business results. In this environment, missing your budget either by under-spending or over-spending is an undesirable outcome, and draws unwanted (and often unwarranted) attention to your campaign management prowess.

So, unless you are one of the lucky PPC managers with unlimited budget as long as you hit ROI targets, or you have the bravado to ignore budgets to prove your management machismo, your best bet is to come in right on the mark.

Staying Within Range Of Your Target Budget

I generally worry about three things when it comes to managing monthly budget targets: (1) going over budget, (2) getting too far under budget and (3) Blowing through our budget before the end of the month. Of these worries, preventing over-spend is probably the easiest problem to avoid.

Preventing Over-Spend

If we are severely budget-limited, taking the campaigns offline when the budget is exhausted is the certainly the easiest option. I don’t prefer doing this because it seems so contrary to common business sense.

However, I have also found that nothing is more motivating to clients than the thought of their competitors gaining advantage by having the search results pages all to themselves! So, sometimes this option works well to free up more funding for paid search.

Going Over Budget

To prevent campaigns from going over budget, the first line of defense is to use the budget settings within Google AdWords and Microsoft Bing Ads.

Bing Ads: Bing Ads allows you to set monthly or daily budgets for your campaigns. If you choose to set monthly budgets, Bing Ads will show your ads whenever they qualify for an auction and then pause them when your monthly budget is exhausted. Alternatively, you can also use Bing Ad’s daily budgeting feature to spread your ad spend across the entire month.

For example, if your monthly budget is $3,000 for a month with 30 days, setting your daily budget to $100 will ensure that your ads show every day. With daily budgeting, you can also set the ad delivery to either standard or accelerated pacing. Standard delivery means Bing will pace the delivery of your ads so that they show throughout the day based on your budget. Accelerated delivery means your ads will show in all eligible auctions until your daily budget runs out.

Google Ad Words: In AdWords, you can’t set a monthly budget directly. Instead, Google calculates an effective monthly budget based on your daily budget setting. AdWords multiplies your daily budget by 30.4 (the average number of days in a month) and uses that value as your monthly maximum spend.

During the month, your AdWords spend may vary, exceeding the daily limit by as much as 20%; but at the end of the month, your budget will not exceed your target ad spend. So, for example, if your daily budget is $100 per day, then your total monthly maximum spend will not exceed $3040. You can also share a budget across some or all of your campaigns to ensure your whole account stays within limits.

Under Spending

Under spending budget is also one of my budgeting worries, and it is a tough one to manage if you get behind. Under spending can happen for a number of reasons: inattention to campaigns, ads that have been suddenly disapproved, another big competitor has entered your space and is eating into your search click volume, or your client suddenly decides they need to dump a lot more funding into your campaigns in the middle of the month.

In big corporations, this tends to happen at the end of fiscal quarters or the end of fiscal years. While no one ever likes to turn down additional budget, dealing with a huge budget bump can be very tricky in the short term.

Tracking Daily Spend

When hitting budget numbers becomes an overriding requirement, it is important to keep a very close eye where we are relative to the target monthly spend and make bid and budget adjustments daily. The challenge is knowing how big or small the adjustments should be, because every day of the week has its own traffic and ad spending profile that needs to be taken into account.

For this reason, we like to take day-of-week spending patterns into account when making adjustments.

PPC Ad Spend Weighted by Day of Week helps inform bid and budget decisions.

The above chart shows two curves. The orange curve shows the average daily spend we need to achieve in order to reach our month end target, somewhere around $325 per day. The second curve, the blue one, shows a spending plan weighted by day of week based on our typical intra-weekly spend patterns.

We developed the curve below simply by taking the daily profile of the last five or six weeks of ad performance, and weighting the ad spend based on how individual days of the week perform as percentage of the entire week’s ad spend. As you see, there is a big difference between Sunday and Monday average ad spending:

Each day of the week has its own ad spend profile.

Using a weighted average can make a big difference in the adjustments you make to your bid and budget allocations day-by-day compared with using a straight line average. For example, when your month begins on a Thursday, and you come in on Monday morning, you’ll see that your daily ad spend might look like this:

Daily PPC Spend plans – weighted versus straight line average.

If you are comparing your actual ad spend against the orange straight-line average target spend curve, you may be  inclined to make a much bigger set of adjustments than if you were comparing things to the weighted average. The weighted average curve looks very similar to your actual ad spend, so you would probably make smaller adjustments.

When we work from a weighted average in managing closely to monthly budgets, we find we are less likely to make yo-yo adjustments – too aggressive one day, and too aggressive in the opposite direction the next.

In general, it is always preferable to work to ROI targets and allow ad spend to drift up and down as market efficiencies dictate. However, if you are required to also keep close to your budget targets, it’s a good idea to keep track of where you are relative to your strict monthly budget goals on a daily basis.

You can build a simple model in Excel to help you track more closely to monthly targets that lets you take day-of-week ad spend fluctuations, and which lets you take holidays and other known events into account. If you’d like a copy of the spreadsheet I’ve used to create the examples shown here, click on the email link below to send me a note, and I’ll be glad to shoot it across to you.

Many people, including Danny Sullivan, have noted that Google has now embraced a paid inclusion model. Things have certainly changed, and advertisers need to stay on top of their game to take advantage of new opportunities. In this article, I’ll share some tips we’ve learned related to Google Shopping ads.

Before getting started, a few notes on Google Shopping:

• It’s a feed-based product, and feeds are submitted via Google’s Merchant Center. After linking a feed to a Google AdWords account, the best strategy is to set up a separate campaign for all Google Shopping ads.

• Google Shopping has both CPC and CPA bidding. The biggest difference is that CPA doesn’t include the ability to label (more on this later) and doesn’t pay per click but only pays when a purchase is made. Bids are also set as a percentage of the price of a product (for example 20% of $100 = $20). We prefer CPC bidding because of its flexibility, and we tend to get pretty good ROI using it.

• In some more optimized accounts, Google shopping accounts for 25-30% of overall traffic. Over time, this may increase as ad units may increase in size and take up more screen real estate. Lately, Google has been testing a number of different sizes and shapes. Here’s an example of a common layout:

Optimizing Google Shopping Ads

There are different ways to optimize your Google Shopping advertising. There’s the optimization work related to the feed itself (like the content of the feed and specific attributes associated with the feed) and optimization work within the Google AdWords platform. My recommendations below will cover both.

Long Headlines & Descriptions In The Feed

As you know, there are no keywords associated with Google shopping ads, and Google pulls information from the feed to match relevant products to queries. You can increase the chances ads will show for specific queries with longer product titles and descriptions as Google has more content to pull from.

Think of it as SEO for your product feeds. On shopping.google.com, more information displays in the search results but titles and descriptions can get truncated; so, include your best content at the beginning of attributes. Titles can get truncated after 30-40 characters, but descriptions attributes are not limited as much and can be longer.

Take a look at the example for the George Foreman grill below:

Include Handy Attributes In The Feed

In the feed, basic fields like title, description, ID, product_type, image_link, etc. are required attributes. Below are some other handy attributes we also like to include in feeds. Note: these tend to be used by more sophisticated advertisers.

AdWords Grouping (adwords_grouping)

This is used to group products in any way you want. In the example below, adword_grouping has been used to create groups related to pillows, pillowcases, sheets, comforters, etc., but can be used to segment out high volume products, etc. This is a very good option for companies with relatively simple product sets.

AdWords Labels (adwords_labels)

This is similar to adwords_grouping, but works only with CPC bidding. The major benefit with adwords_labels is that it can hold multiple values and allows products to be tagged with multiple labels.

Use Auto Targets In AdWords Interface

Advertisers can bid on core attributes (above) using the auto targets tab. This allows advertising to bid differently based on product types, product groupings, etc. For example, an advertiser may want to bid differently for products grouped as “top sellers” than for a specific group created around other keyword terms.

It’s worth noting that a generic “all products” target is created by default in accounts that have Merchant Center feeds associated with it. “All products” casts a pretty wide net, so bid lower if you use this option. Another important point is that product targets have to match exactly or they will not show.

Take A Look At Your Keyword Terms

Despite many myths, advertisers can see keywords terms that trigger your Google Shopping ads in the Search Query Report at the campaign level. It’s wise to look at these terms to ensure the campaign is as relevant as possible and to pinpoint terms that are not a good fit. The best way to exclude terms is to have extensive negative keyword lists in your campaign (campaign or ad group level).

Here’s how to view keyword terms:

PLA campaign -> Keyword Tab -> Keyword details -> Search Terms -> select “All” to see all terms

You won’t see this option if you go into an ad group and then to the keywords tab. This is likely why so many people think it’s impossible to see keyword terms related to Google Shopping ads.

Try The “Promotion” Option In Google Shopping Ads

Advertisers are able to include a “promotion” with Google Shopping ads units. These are added in the “create an ad” part of the interface. Shipping and discount offers tend to work well in the promotion section and can really make ads pop when the format is displayed by Google. Differentiate your advertising from your competitors, especially if you’re in a competitive space.

Here’s where the promotion option is located in the interface:

Here’s an example of a Google Shopping promotional message:

Feel free to share your Google Shopping tips in the comment section below.

Author’s Note: A special thanks goes out to Stephen Woldenberg & Brian Bensch for their valuable help with this article.

For mobile targeting, this is true, as the ability to target mobile devices is now gone. However, for the targeting features that are left, such as location targeting, you might not want to consolidate your campaigns just for easier management.

In today’s column, we will examine how locations affect your campaign structure and if you should change your structure to match the new enhanced campaign benefits.

Location Bid Modifiers

Most accounts do not have the same conversion rates by geography. In some cases, the changes are small; but in other cases, the changes can be quite dramatic.

In this instance, the CPA of San Antonio is double that of Philadelphia. Therefore, we would not want to bid the same for each of these locations. Before enhanced campaigns, in order to bid separately by location, we would need to create a campaign for each location and set bids based upon the keyword CPA by region.

With enhanced campaigns, this will not always be necessary. One of the great new features is bid modifiers based upon locations. With bid modifiers, you can automatically adjust your bid for each location being targeted.

For instance, we can set our keyword bids as normal based upon some global CPA numbers, and then tell AdWords we would like to bid 32% higher for the Philadelphia region and 39% lower for the San Antonio region.

Before you can set a bid modifier for each location, you must add them to your campaign targeting section. If you don’t add each location to your campaign targeting, then you will not be able to set a bid modifier by location.

The good news is that this is very simple. You set bids as normal and then automatically adjust your bid by region.

The main limitation is that this is a campaign-only setting. If you have some keywords that do better in San Antonio than Philadelphia, but overall San Antonio is worse so you’d want to use a negative bid modifier, you cannot exclude keywords from the bid modifiers nor have bid modifiers at the keyword level. Of course, having that level of control would be incredibly difficult to manage by hand, so using campaign bid modifiers is a nice middle step.

The bad news is that these changes just affect the keyword bids for the entire campaign. They do not allow you to adjust the budget or ads for each region. In some cases, you still want to make different campaigns for some locations.

If you are a national company that has never tried to manage bids or budgets by locations, this is a great feature to get you started examining how various locations affect your CPAs so you can start to bid them separately or even target the users differently by location.

Please note, the geographic bid modifier only works with CPC bidding, either manual or enhanced. As with all bid modifiers, it is not compatible with CPA bidding or budget optimizer. The only exception is that you can bid –100% (setting your bid to $0) to not show if the auction uses that bid modifier.

Controlling Budgets

Several years ago, one of the main issues with splitting out your campaigns by region for bidding purposes was that you might have a single budget target, and you didn’t care which region received the click and spent your money, as long as the correct bid was used and you didn’t go over your total budget.

The shared budgets feature fixed this issue for advertisers and created the opportunity to easily use multiple campaigns without fretting over how to split the budget between campaigns.

Some companies have budgets by region. This is common in areas where there are co-op marketing budgets involved, multiple franchise locations, or physical store locations. If you want to maintain budgets by region, then you still want to maintain separate campaigns by region as you cannot split a budget between regions with enhanced campaigns.

If your regions are large, such as the northeast, southwest, and so forth, then you can use bid modifiers within those regions to tweak your CPCs; however, your overall structure of keeping your regions separate for budget reasons is still sound with enhanced campaigns.

Geographic-Specific Ads

One of the main reasons to separate locations into various campaigns is to ensure that the ads speak to that particular geography. The most common instance of this is adding the region to the ad’s headline. However, it is also done to match offline promotions or test responses to offers by region.

If you have split out your campaigns for the purpose of using different ads by region, you will not want to reconsolidate your campaigns as you will lose your ability to specify specific ads by geography. So, if your main reason to use multiple campaigns is for ad serving, you will want to leave your campaigns separated.

Ad Extensions

The last major reason campaigns were split up by region was for extension usage. You might have different sitelinks, offers, or location extensions you wanted to use by campaign. As none of the extensions have a geographic ad serving component (except for the location extension), if you want different offers or sitelinks by region, you still need separate campaigns.

With location extensions, you can decide to bid differently for someone who is within the reach of your location extension. If you first add your location extension as a location target, you can then set a bid adjustment for someone in that radius.

If you have physical locations where you want the customers to come to your business, this is a welcome change as someone who is within a mile of your restaurant is usually worth more than someone who is 30 miles from your location.

Wrap-Up

Enhanced campaign bid modifiers make it easier to manage location-based bids if all your keywords have similar CPAs by region. The ability to set a bid adjustment based upon the user’s proximity to your location is also a welcome change. If you want a simplistic AdWords account, and yet have the ability to set different bids by region, the new enhanced campaign features are a very welcome change.

If you are an advanced advertiser who wants to change budgets, ads, extensions, or individual keyword bids by region, when you upgrade to enhanced campaigns, you will not want to consolidate campaigns just for location targeting purposes. You will still need to consolidate campaigns based upon device types, but you won’t do it for location purposes.

If you have segmented your campaigns by location, you can still take advantage of bid modifiers within the campaigns as locations often have sub-locations (states have metros, metros have cities, etc.) that will commonly have different CPAs by each region which you can micro-manage with bid adjustments. If you are using location extensions, then please take advantage of bid modifiers by location extension reach.

The launch of enhanced campaigns is one of the biggest changes Google has ever implemented, and it will change how AdWords accounts are created, structured and managed. While enhanced campaigns gave additional features to location based bidding, this new campaign type should not force you to reorganize most account structures based solely upon location targeting considerations.

At the heart of Einstein’s FIELD theories, which describe space-time, was his famous formula:

Okay, maybe you’ve never seen that before, but it is famous among theoretical physicists and cosmologists. The lambda, (Λ) is the cosmological constant, which we’ll touch on later in this article. Einstein’s most famous formula is, of course, E = mc2 which describes the conversion of mass to energy, as in that which happens in an atomic explosion.

It took the world of physics years to figure out what Einstein was even talking about, and then even more years for experts to work out whether he was right or wrong. As it turns out, Einstein was more right than wrong.

Google’s Grand Unification Theory Of Devices

In similar fashion, Google turned the world of paid search on its head last month when it unveiled Enhanced Campaigns, which I refer to as their Grand Unification Theory of Devices. Google’s stated purpose in pursuing the Grand Unification Theory is to create a new advertising universe where paid search campaigns are elegant and simplified, and where we can target all devices, bids, time and space from within a single campaign.

This theoretically perfect PPC universe is still young and unproven, but that has not stopped Google from creating it and implementing it before the end of the next fiscal quarter. Of course, they can do that; they’re Google. While Sir Isaac Newton and Dr. Albert Einstein had to content themselves with just describing the world around them, Google can change the way the PPC universe actually works.

Just as Einstein created his elegant equations to describe the grand workings of the cosmos, I thought it would be interesting to take a quick peek into some of the fundamental assumptions that Google must make in order for an Enhanced Campaigns universe to make sense, and express them as simple mathematical formulas.

This new universe operates differently than our current “Legacy” world, and I hope my math logic will help your understanding of what’s fundamentally changed. Making things simple isn’t always so simple, after all.

The Law Of Approximate Device Equivalence (LOAD)

To achieve simplicity and elegance in its new Enhanced campaigns, the first thing Google needed to do was get rid of all that pesky nonsense about campaign ROI performance being different on tablets than on desktop devices. Rubbish. How can anyone create simple campaigns if devices all perform differently?

Unless and until device performance could be proven to be equivalent, it would not be possible. This led to the necessity of inventing a new Law to describe device behavior in the new Enhanced Campaigns Universe, which I’ve named the big new Law of Approximate Device Equivalence, or I prefer to call it, the big LOAD.

Here is my equation that describes it:

According to the big LOAD equation, where rho (ρ), represents advertising performance, and ρ(t) represents performance of Tablets, and ρ(d) represents the performance of Desktop campaigns, Google has simplified the way things work by declaring that desktop and tablet advertising performance are equivalent, or at least close enough so that we need not concern ourselves with optimizing for them anymore.

Now, perhaps you are not a ‘math’ person, but you, as well as many advertisers, doubt that this can possibly be true. Perhaps you “just know” that tablets will perform differently than desktops. You see it for yourself in your everyday life. You see how tablets are replacing favorite magazines as something to browse through as you sit and watch the tele or enjoy a cocktail with your significant other. In the morning, whether traveling or at home, you see how tablets are starting to push newspapers off the breakfast table, and you ‘just know’ this can’t be true.

Or, maybe you are a data person, and claim to have “actual data” that confirms your suspicion about the veracity of Google’s big LOAD. Don’t fret, you are not alone. Even Google has data like this, and publishes it on its website like this:

Google’s own data shows significantly different usage profiles between Tablets and Desktops.

Hmmm, you ask. Shouldn’t Google use its own data to challenge a fundamental assumption of Enhanced Campaigns? Well, let me ask you something. When was the last time you tried to create an online ad system? What? Never? Then don’t question the wisdom of someone who has. And, besides, the big LOAD equation does not work in a Legacy Campaign world, so stop whining and start converting. And don’t laugh, either. After all, didn’t Isaac Newton have to create new math before he could prove his three Laws?

The second controversial, and even more mysterious, aspect of Google’s Grand Unification Theory of Devices is that individual keyword bids on mobile are no longer useful. Instead, mobile bids will now be calculated as a function of desktop keyword bids as explained in this equation:

The Law Of Bidding On Mobile & Desktop Devices (BMAD)

Translated, this equation states that your mobile keyword bid amounts will vary as a constant function of your desktop bids:

It no longer matters how your mobile keywords actually perform on mobile devices, what matters now is how your desktop keywords perform on desktop devices.

In olden days, advertisers only had one economic model to apply to AdWords bidding calculations. That model was based on the premise that your keyword bid should be a function of your conversion-rate-performance for that keyword. Now, with BMAD, we have two models. We can use that old model for our desktop device campaigns, and the new BMAD model for mobile keyword bids.

Now, I know you are saying to yourself, “how can it be simpler to employ two models rather than one?” As I said earlier, creating simplicity isn’t all that simple. Does that help? Good. Read on.

To make working under two economic models more simple than working with one, and to make the BMAD economics viable in the first place, Google simply invented the Mobile Bid Adjustment Factor, or BMAF, for short.

The BMAF is a constant, a percentage ranging from -100% to 300% that you can set yourself at the campaign level, which automatically creates your mobile keyword bid as a percentage of your desktop keyword bid. And, to make things even easier, any time you change any of your keyword bids, the BMAD BMAF instantly changes your mobile keyword bids, too. You’re welcome.

Still skeptical? Why, you ask, should mobile bids change every time we change a desktop bid? Why should mobile bids vary based on desktop bids in the first place? These are good questions. Let me get back to you on that.

Did Google Get It Right With Enhanced Campaigns?

Putting aside the shaky assumptions underpinning Google’s new Enhanced Campaigns that I satirized above, the question of the day is: will Enhanced Campaigns work and will advertisers be happy with it? Will Google be happy with it? Will Mobile CPCs rise and improve Google’s net profits?

There are certainly a lot of questions to be asked, and answers to be discovered, and the topic will certainly dominate the blogoshpere for months to come.

We’ve started modeling the expected impact of merging campaigns, and so far, we can find no significant gains or losses in the cutover, and so, we are starting the conversion process for our smaller customers.

Final Thoughts

A few final thoughts and questions about Enhanced Campaigns. Anyone who wants to weigh in, including Googlers, please leave your comments at the end of this article.

First, why didn’t Google first change the way it handles the time of day reporting and accounting for clicks?

I’d have thought this would have been the very first part of any AdWords reorganization. As it stands now, we still have to bid for clicks based on the time zone of the account, rather than the time zone where the click actually occurs. So, for example, If you want to reach people during their lunch hour, it would take 3-5 different campaigns for the US alone.

Some of the exciting new features in Enhanced Campaigns, like geographical bidding and site link scheduling would be much more useful if AdWords campaigns were based on click location.

Second, Google’s Product Managers have learned that handling PR surrounding new platform releases is probably as important as the release itself. I am sure that Google PR teams were embedded with the development teams, because the minute the story broke, there were industry pundits all lined up to say nice things about the changes.

Google strategically ‘leaked’ info to hundreds of major account reps, writers and bloggers so that within minutes of the announcement, the Internet was full of positive spin, which drowned out the negative voices. Well done, Google Product Development and PR teams. I sure hope there is as much steak in this new rollout as there is sizzle.

Well, that’s all that’s on my mind for Enhanced Campaigns this month. Want to give a big shout out to my brother, Bob, for his help with the physics and math stuff. Helps to have a physicist in the family! Please comment below with your own thoughts and ideas on Google’s latest efforts.