Show Notes:

Understanding Google AdWords match types and the various bidding settings can be the difference between life and death of your PPC campaigns.

Listen to this interview with a legend in the pay per click industry. He has built and sold a successful PPC agency. He has written multiple books on the topic, has written for almost every search news outlet, and has spoken at more search conferences than I’ve had breakfasts.

He was the resident PPC expert with the leading online marketing training service Market Motive, and hosted PPC Rockstars on Webmaster Radio for many years.

He is none other than David Szetela!

Connect with him on Twitter @Szetela (62,000+ followers can’t be wrong…) or email him on “szetela AT gmail.com”

Philip: G’day and welcome to another episode of the Marketing Secrets Podcast where we interview the world’s leading experts in online marketing.

Today, I have an amazing guest, David Szetela. He’s on the other line, he’s going to have to keep quiet for a while as I read through all his credentials. And it’s a lengthy list.

David is the author of two books. One is PPC An Hour A Day which I highly recommend by Wiley. He’s built and sold every well know PPC agency, Clicks Marketing.

He’s published content on, I think, every single search engine property or blog news sites in the world, Search Engine Watch, Search Engine Land, Marketing Sherpa.

He was the PPC expert on what I would consider, I think many consider the world’s leading online marketing education service which is Market Motive. He was host for many years on PPC Rockstars and I feel like I know him as a best friend from that, I’ve listen to many of his shows.

I thoroughly recommend you get on to Webmaster Ray and have a look at that or listen to that show. He’s also on the advisory board of one of the world’s most popular Pay Per Click management software companies, Acquisio. So without further ado, welcome David.

David: Thank you Philip. I feel tired just thinking about all those things that you just mentioned.

Philip: Well you’ve pretty much been there and done that I think. So, it’s great to have you on the show. We’ve been trying to get you on for a while, I know you’re a very busy man so we’re very appreciative of your time.

David: It’s a pleasure and I’m sorry I was so elusive.

Philip: Not at all, not at all. And now the most impressive credential of all – I haven’t mentioned yet and that is, you actually play a little bit of guitar with the co-founder of Microsoft Paul Allen. How the hell did that happen?

David: Wow, where did you dig that up?

Philip: Cunning research skills. Is that true?

David: Okay. It is true. Okay so, I’ll shorten the story. It’s kind of a long story but back in the – I worked for Apple for seven years and this was in the late eighties, early nineties.

Kind of a crazy period in their history and I used to represent Apple at all of the TC industry conferences. One day I formulated an opinion that there was a disproportionately large percentage of musicians in the PC industry.

So I decided to test this theory with people that I met and found that it was true. I was waiting for a drink at a bar, asked the guy standing next to me whether he was a musician. He said, hell yes.

So that conversation turned into our going out and renting musical instruments all the way from base drums to keyboards and guitars and having a jam session that lasted all night.

Eventually that became a PC industry staple at every conference and to the point where, for some of the conferences the conference organizers would rent the equipment, set it up and we would just storm the stage and jam.

And yeah, at one of the conferences, Paul Allen was in the audience and he’s an excellent guitarist. I mean he’s just – his idol is Jimmy Hendricks and he plays Jimmy Hendricks style of guitar really, really well.

So the cap on that story is that at one point, the friend that I had approached earlier in the story of waiting for drinks who is now a very wealthy venture capitalist and actually has venture funds with Bono and plays music professional.

He leaned over and yelled into my ear – can you believe what the net worth of this band is? Because at that point Paul Allen was worth trillions and I think we may have even had Marc Benioff in the band as well, the guy that founded-

Philip: Yeah, Salesforce.

David: Salesforce.

Philip: So then PPC Rockstar, the naming of that show has extra relevance. Did you name the show?

David: I actually did not. It was named by Darren Barden, the owner of the Network.

Philip: So you are a PPC star and a rockstar as well.

David: Well I got another one for you. It’ll take some research but it can be found. There is on the interwebs a video of me recently playing with, among other people, the lead singer of Grand Funk Railroad.

Philip: Right, okay. I don’t know them well but I’ve heard of them

David: YouTube.

Philip: I’ll have to dig that up. I’m not that young.

David: Some of your listeners may be old enough-

Philip: I’m old enough, I’m just ignorant, that’s all. Awesome. Well that’s a great introduction. Let’s get into the topic of the day which we’re going to talk about some of the campaign settings in Google Adwords and some of the more important settings that you’ll see in the settings tab in the interface.

So, we’re going to start off with – although you don’t see the match types in that interface, there are some settings around matching options. So, we’ll step it back a bit and Dave can you just give us a bit of a very simple view of the different match types and what they mean?

David: Sure. Some of you listeners who are into PPC may be surprised to learn that there are now nine different match types. So here they are. There’s Broad, Modified Broad, Phrase, Near Phrase, Exact, Near Exact, Negative Broad, Negative Phrase, Negative Exact.

Philip: Beautiful. We’re done. Next topic.

David: When this – the most recent change was the introduction of Negative Broad. I’m sorry, excuse me, Near Phrase and Near Exact. This raised a lot of hue and cry on Twitter, specially.

And let me just put in a plug here for a hash tag that people were interested in PPC should follow on Twitter because literally all of the experts in PPC participate in ongoing discussion by including this hash tag in your tweet and it’s #ppcchat.

Philip: Yeah it’s a very popular – it’s a very popular hashtag. Unfortunately it’s a little bit of a bad time for us. We actually – the last person we interviewed for the show was Matt Umbro who’s the founder of PPC Chat.

David: Oh okay.

Philip: Yeah. Unfortunately, it’s on at lunchtime in the US which is a pretty bad time down under but we sort of catch up with it after the event.

David: Sure. And that’s the weekly live chat but the repartee goes on most every work day and sometimes on the weekends as well. I rely on it to see exactly what is going on that’s new in the PPC arena.

PPC Chat people literally are hanging out in the interface night and day and whenever they see something new, they immediately post about it.

Philip: Yeah I was actually looking at it yesterday. There seems to be a fair bit of spam coming through that now which is really sad, isn’t it? It’s just inevitable.

David: Yeah. It’s one particular spammer – I don’t quite understand it but I guess everybody needs a hobby.

Philip: So I think we can probably breakdown those match types right into sort of the basic match types and some of the more sophisticated ones which are a little bit more subtle in nuance. Can you give us a bit of an overview on the Broad, Modified Broad, Phrase and Exact?

David: Sure. Broad match type is the default when a keyword is added via the web interface or Adwords Editor and using the Broad match type, you’re telling Google, show my ads when the search query includes this word or these words and any synonyms, any stems and really gives Google a lot of latitude in matching search queries to your intended keyword.

It’s a little bit dangerous and over time it’s become more and more dangerous because Google has been more and more loose with it. And dangerous in that Google will match, Google will display ads when the search queries are kind of wild synonyms of the keywords.

Philip: Yeah, I mean, Broad matches are just the most misunderstood area. Do you think it would be fair to say unless you’re an advanced Adwords user, you should stay away from Broad entirely?

David: Yeah, and there’s one exception to that. There’s a category of advertiser which call warm body advertisers and those are advertisers that are really looking for sheer volume and an example of this would be an advertiser that’s giving something away for free, trying to establish or create/accumulate an email list.

In that case, using the broad match type might probably wouldn’t be so dangerous and those types of advertisers are usually bidding very well anyway. So they’re apt not to get too burned.

Philip: But I’d say those people are probably got a fair bit of experience too and I would maybe class them as more sort of advanced.

As much as I love Google, I’m very critical that this is the default setting so when a new advertiser goes in there, they enter in a keyword like Accountant Sydney and they just assume quite naturally that their ads are going to show for Accountant Sydney and maybe Best Accountant in Sydney but then they don’t realize it may show for Financial Adviser or maybe even Parramatta or somewhere close. You know, switch out the words with the synonym.

So the synonyms and what Google constitutes as synonym and what we would constitute a fair synonym is actually very, very different and it causes absolute havoc and chaos and a huge amount of wasted cost. So my advice to everybody who unless they’re advanced is to stay away from Broad until you really understand it.

David: Absolutely agreed. When I create a new campaign, I use Phrase and Exact and sometimes Modified Broad. So let’s move to Modified Broad.

Modified Broad can be identified in the interface and Adwords Editor by a plus sign preceeding one or more words in the keyword or key phrase and here you’re telling Google essentially, act like a broad match but don’t be too liberal about synonyms and stems.

So Google will still be a little bit liberal when matching keywords to search queries but not so far afield.

Philip: Right, so if you take that example, Accountant Sydney, and we made Accountant modified broad match which means put a plus sign before the word Accountant, Google is not going to switch that Accountant with Financial Adviser or Bookkeeper or anything that constitutes a synonym.

David: Yes, that’s correct. So Phrase Match. Phrase Match is telling Google, show my ads when the search query contains these words and in this order. So the phrase ‘Purple Sneakers’ or the keyword ‘Purple Sneakers’ will match ‘I’m looking for a pair of purple sneakers’ but not ‘I’m looking for a pair of sneakers that are purple.’

So the order of the words is significant. An Exact Match is telling Google, show my ad when the search query matches this keyword exactly. No stems, no plurals, no synonyms.

Philip: Cool. So that’s how this eco system of Google Adwords operates for many years when we had these match types and those were the rules and that was it, right, and many people still think we operate under those conditions.

But, as you said earlier, it’s actually a whole lot more subtle differences on these match types. So perhaps you can sort of explain those?

David: Sure. So, I believe it was early this year, Google decided in their infinite wisdom that they would loosen up Phrase and Exact Match and by default any phrase, keyword or exact match keyword would be matched to search queries that were a little different than the keywords.

So literally what they say is Phrase Match and Exact Match keywords will match search queries that include plurals, misspellings and other close variants of the keywords.

Philip: So, I mean, as an outsider or a listener right now, not having heard this too often, you’re thinking well, so let me get this right? I have Exact Match which is exactly what my search term is will match the – my keyword will match the search query and I have Phrase which is going to lock the two words together. It’s going to be exactly the same but now, if I don’t change the setting, it’s not going to be exact.

David: Right.

Philip: It’s a little bit bizarre.

David: Yes and the Google rationale – there was a lot of kind of back lash against Google when this came out because Google was basically saying, we know it’s best for advertisers and therefore we’re going to make this behavior the default behavior.

And their explanation was that many or most advertisers who used Phrase Match and Exact Match did not have enough imagination or experience to include explicitly the plurals, the misspellings and other close variants that they really should because those would convert well for them.

Philip: I sort of see their point and I would actually split their setting in half where, okay, so plurals and misspellings, I’m not actually too fussed about, that’s okay. But it’s the other close variants I think that adds this extra variability that I don’t like letting go of.

David: Sure. Well, you know, I thought about it and read a lot of articles about it and here’s where I come down and it’s related to the fact that if I ever write a book about PPC again, I’m going to have a lot of caveats in it.

Most of the caveats will be – if you have enough time, do it this way. If you don’t have enough time, take this short cut or save time using this method. So I’ve come to agree with Google that having a somewhat loose phrase and exact match is not such a bad thing and in fact it saves me time.

I don’t have to worry about explicitly adding plurals, misspellings and other close variants that, in my experience now having used and observed what’s called near and exact match now, I haven’t seen any problems.

I haven’t seen runaway spending. I haven’t seen when running search query reports. I haven’t seen very odd search queries triggering ads.

Philip: I think yeah – I mean I don’t think this setting is an absolute killer by default that it’s on sort of this expanded view of the world. I guess the biggest setting for me that I’m critical of is Broad Match as the default keyword.

You know, you have beginners creating accounts and they put in a keyword, they type it in the normal English with no square brackets or inverted commas or plus signs which restrict the waste and it’s just free for all.

I was doing a training day yesterday and in the search query report, there were just crazy stuff and the client was freaking out and they just couldn’t believe it.

David: Yeah. And you know, Google has a conundrum which is similar to the conundrum they have by virtue of the fact that separating search and display campaigns is the best practice but combining them is still the default.

And the conundrum is based on the fact that Google has to make money and it’s not coincidental that Broad Match is going to generate more money for Google than any of the other match types.

Philip: Yeah, yeah.

David: Unfortunately, that’s kind of short term thinking because in the long term what it does is it creates many advertisers who deem Adwords as a failure for them.

Philip: Exactly. Just fascinating. I’m sure they’re running these financial models all the time but changing one of these default switches to on versus off is worth hundreds of millions of dollars.

David: Absolutely, sure.

Philip: What about Negative match types?

David: Okay. These are frequently misunderstood and I’ll run through them. You can designate Negative Broad, Negative Phrase and Negative Exact match types. Most people only know about and use Negative Broad which is not such a bad thing.

So you’re literally saying to Google, match my or display my ads when one of the keywords in the Adgroup matches the search query unless this word or this phrase also appears in the search query.

Now, Negative Phrase just says to Google the words that indicate you shouldn’t show my ad must be in this particular order. Negative Exact barely says Google, don’t show my ad if the search query is exactly these words in this order.

Philip: Okay, so can you give us an example of how important these different negatives are? I think this is a really poorly understood area for most advertisers.

David: Yeah it is. First of all, Negative Broad doesn’t work like standard Broad match in that Negative Broad is not telling Google to get wild and crazy and exclude or fail to show the ad if the search query includes synonyms or plurals of the Negative Broad word. So there’s no danger of that. Some people think that there is a danger and that’s why they use Phrase and Exact.

Philip: I think that’s a very misleading name actually.

David: Yes it is, yes. So in most cases, I really believe that advertisers should stick to Negative Broad match. There’s just no reason to use – there’s just not as much of a reason to use Negative Phrase and Negative Exact.

Negative Phrase, I would use only if there is a frequently occurring search term that would trigger your ad that is clearly not related to the product or service you’re trying to advertise. I’m blanking out on an example right now. Sure, I’ll think of one.

Philip: I think it’s a good point though for most advertisers just getting your head around the Negative Broad which is very different to the Broad, the normal Broad match but just the negative keywords are really important.

So if you’re a high end provider of luxury goods, you don’t want to be appearing for used, second hand, cheap, discount, all those types of keywords so those should be in those negatives.

Another common thing we use negatives for is let’s say you’re a service provider or an accountant or a psychologist, you’re now looking to employ people, you’re going to have lots of negatives in there about jobs and internships and careers and all that sort of stuff.

So you want to minimize your waste, you don’t want your ads to show for irrelevant searches.

David: Great. And one last match type related suggestion and that is, if you’re not using Broad match, just standard Broad match, then you won’t have as much reason to need Negative keywords. You won’t see search queries that don’t relate to your products and services. So, just another time saving tip.

Philip: Yeah for sure. Let’s talk about just some rough rules. I have a few of my own which are very rough in terms of giving advice and you touched on it earlier.

Let’s say you’re spending a thousand bucks a month on a really small campaign. My advice really is you probably should get away with predominantly your keywords in Exact match and possibly some Phrase.

If you’re spending up to 5k, you probably still can just use Exact and Phrase match, maybe a few Modified Broad, maybe if you’re spending above that, you can start adding a lot more Modified Broad and try and get more activity. Do you have some other thoughts?

David: Yeah I agree, absolutely. That’s a good way to ramp up a campaign over time too if you want to be conservative about spending, stick to Exact Match. I think Phrase Match is pretty essential just because of the fact that many, many – I don’t remember the percentage but many search queries are multiple words and it’s hard to predict what words will be included besides the kind of core terms.

So anyway, starting a new campaign would just – Exact Match and Phrase Match is really the most conservative way to start and essentially ramp up the campaign that you want.

Philip: Yeah, I think, if you look, I’m sure if we had to review a lot of the thousands or tens of thousands of failed Google Adwords campaigns, it’s probably because they came out the gates just all guns blazing, spent a shit load of cash and it was all just wasteful activity and it’s really hard to pick up momentum, you know, you’ve lost credibility within your company or you’re in charge of the cheque book with yourself and you lose faith in Google Adwords and you’re done trying again. You think Adwords is broken.

And I’m much more in favour of starting small, controlled, little waste. If you’re not getting a lot of clicks, up your bids a few. If you’re don’t have enough keywords, add more keywords, do more keyword research and it’s a much more – you increase your probability of success by a factor of a lot.

David: Agreed, agreed.

Philip: Anything more to say on the match types or the matching options?

David: I don’t think so. Keep it simple.

Philip: Good, excellent. So let’s move onto another setting. Sorry, just a recap actually. So when you’re entering your keywords, listeners should be really clear on how they identify the match types with the square brackets or the inverted commas or the plus signs, that’s fundamental.

And then under your settings at the very bottom of your settings in the interface you’ll see a little blue hyperlink. We actually have to expand it, it’s called keyword matching options and that’s the way you choose between the options of including plurals, misspellings and other close variances which is the default or do not include the close variance.

So let’s move on to one of the other settings in the campaign settings area and that’s Devices. Can you give us a bit of an overview on what this setting is for?

David: Sure. This a great very flexible capability. By default Google will show your ads on all possible devices and that includes desktop and laptop computers, it includes mobile devices of all kinds with full browsers but that’s mostly smart phones and it also includes tablets with full browsers.

It’s usually not a good idea to show ads to all devices. The simplest form that I use is one campaign showing ads to desktop, laptop computers and tablets since tablet behavior both in terms of displaying sites and in terms of humans interacting with those sites is very similar on tablets and desktop and laptop computers.

So one campaign for those devices and a separate campaign for mobile devices, basically smart phones. So the reason for that is number one, you probably hopefully have a mobile version of a website that the advertiser is targeting. And you want to obviously send traffic from mobile devices to that website.

And number two, frequently the ad should be different. Frequently, you can’t expect someone to conduct a full conversion on a mobile device. An example of that would be a complicated retail B to C site that will require multiple steps in the conversion transaction.

Another example would be B to B site where the advertiser or the site owner needed to collect a lot of information that had to be typed in. So to boil all that down I suggest separate campaigns – one going to desktop and laptop computers and tablets, the other going exclusively to mobile devices and that’s mainly smart phones.

Philip: Smart phones are really interesting. I mean, everyone’s talking about it in the online marketing space how smart phone penetration is going ballistic. I’ve just come back from SES in Singapore and I spoke on a session on mobile analytics and mobile PPC. It was fascinating to see the smart phone penetration throughout Asia. In Singapore, there’s more smart phones than there are people.

David: Wow.

Philip: And I think Australia is sort of fastly going that direction. We’re upto sixty odd per cent probably by the end of this year. So mobile phone strategy – we could probably have a whole separate podcast on that.

But I think to summarize what you’re saying is that the results are going to be very different on your smart phone campaign, your mobile campaign as to your desktop and tablet. Therefore, you want to split them up.

I think the other thing that a lot of people don’t realize is that your cost per click for the same keyword will actually be different on your smart phone than it will on your other campaigns and that’s why you want to split up, right, because you can have total control and you can change the bidding and you’re going to get different results.

So it’s all about control and I think coming back to your point earlier, when you said you were going to write that book, there’s different scenarios for different people. And as you get more complex and more sophisticated and spending more money, you want more control and you want to do more work to get better results.

David: Good point.

Philip: Do you get to a point where you have separate tablet campaigns as well?

David: Not yet. I’m waiting for Google to come up with tablet specific ad types. I want to see ad types that react to tablet user interface interaction. So I want to see ads and I’ve read that these are probably coming.

Philip: Right, okay.

David: For example right now, you can create an ad, an advertiser can create an ad, a very professional looking, even animated image ad for the Google display network using the display ad builder which is built in everyone’s Adwords account.

One of the types you can create shows products in kind of a rotating sequence. I want to see a version of that that responds to swipes on the screen and even pinching and widening your fingers to magnify things.

So I want to see ads that fit really, really well with the user interface differences on tablets. I’m not quite ready and maybe this is a time savings self defense mechanism to do separate tablet campaigns.

Philip: We find that we keep desktop and tablet together initially so as you know, in the first month of two there’s a lot of work and a lot of structural changes that happens within an account.

Then things maybe stabilize a bit and then depending on the volume of the tablets activity within that combined campaign we then most often split them out into separate campaigns. Now we’ve got desktop, mobile and tablet all separate and we find we can get better results that way because again, you’ve got more control.

The downside I think if you’re a business owner and you’ve got limited time is that now you’ve created three times as much work and then it comes back to your really good point about trade off on what your scenario is and how much work you want to do and how much you want Google to do.

David: Sure.

Philip: So there are also some advanced mobile and tablet options within your settings.

David: That’s right.

Philip: How often do you use these and give us a bit of a run down on them.

David: Well you can choose the operating system. At present you can choose among Android, Blackberry, iOS and WebOS which is – I think that’s HP’s mobile phone OS, formerly PalmOS.

So you can choose to target one or more of those operating systems. An obvious distinction would be targeting iPhones versus targeting Android phones.

Another targeting option is device models. So you can choose, in the US at least, from among what looks like close to 30 different manufacturers and then for each manufacturer – no this is a mixture of manufacturers and carriers actually.

Philip: Yeah, I’m having a look at that list now. I mean it’s quite interesting when you start getting into these details, the granularity that you have for targeting. I mean in my mind, well, a question for you. When would you actually get this specific? When would you want to target your ad as to Android users.

I mean the pretty obvious one is if you’re selling accessories for an iPhone or an Android, you just want your ads to show to those particular customers. And the other obvious one I guess is if you’ve got some usability issues in your site and is not working well on iOS and you want to exclude it which I assume you’re trying to fix as quickly as possible, what other situations would you start getting quite specific is choosing some of these different operating systems or devices?

David: Well I have a general guideline about hyper targeting. Goes for this type of hyper targeting. Targeting down to the device type, for example and as well as the nice hyper targeting you can get with the Google display network down to their list of 2000 topics, 2000 interests, gender, top keywords, lots of targeting options on the display network.

So the general guideline is incorporate as much of what you know about the target audience in the ad and the landing page. That’s where you get the highest click through rates and that’s where you get the highest conversion rates.

Of course all of this assumes unlimited time because it takes a lot of time to hyper target. You got to create lots of separate campaigns and ad groups. So for example, if it were important enough and to your point earlier, this is probably more appropriate for advertisers with very big budgets that are going for hundreds or even thousands of conversions per day.

But you might have an ad group or a campaign since this is all at the campaign level that’s targeting only iPads and the ad copy, I could say, could be related to the iPad.

It could say something as simple as ‘We love iPad owners’ or ‘iPad owners love our products’ and then the landing page could mirror that and talk about the iPad, maybe there’s a version of whatever you’re selling that is better for the iPad or not.

It doesn’t really matter, it’s just the hyper targeting and basically, identifying closely with the person looking at the ad building that into the ad and the landing page, again, will get the best click through rates and conversion rates.

Philip: Yeah, I’m looking at the operators so the telco companies as options and the one thing that I think is quite amusing is – I think it’s similar to the US where we’ve got a couple of telecommunication companies that actually do work and we’ve got a couple that have actually don’t and people can’t get signals or calls drop out all the time.

I already mentioned which ones those are but through this segmenting if you were one of the good telcos you could target ads to somebody on a really crappy network and say, ‘Wouldn’t it be nice if your phone actually worked’ and add a little bit of guerilla marketing.

David: Sure. And this seems like an awful lot of work but again if you’re trying to squeeze every last percentage point out of click through rates and conversion rates, this is the way to do it.

Philip: Do you use these fairly often? I mean I must say unless we have clients that cover some of those things we’ve just been speaking about around whether they are selling our phone apps, that sort of stuff, generally speaking we don’t play around here maybe probably not as much as we should.

David: I don’t use these very find grained carrier or even operating system options. If I’m targeting them, if I’m targeting a mobile phone user, my main message is, ‘I have what you’re looking for, call me.’ I’m mainly using, separating out the campaign so that I can use some of the call metrics and click to call options that work so well.

Philip: Okay. Alright, let’s get on to another incredibly important setting and this could be a topic in its own right but let’s see if we can cover it in five or ten minutes or so and that is the bidding.

David: Great.

Philip: So lots of different options around bidding and I think it’s one area that confuses a lot of people. So give us a little bit of an overview of the bidding options and when you should use certain options?

David: Well, the default is maximum CPC bids. So basically you’re saying to Google, don’t exceed the CPC, the cost per click that I’m designating at the Ad group level or at the keyword level.

Within that the advertiser can choose to either manually set the bids or ask the advertisers to – I’m sorry ask Adwords, ask Google to set the bid prices to help either maximize clicks or maximize conversions within the target budget.

It will probably take more than five or ten minutes if we explain all of the different max, CPC and Adwords controlled options and probably confuse people too because this is kind of a playground for Google. Google is offering several different capabilities that at first blush look like they do the same thing.

So my advice for most of the listeners is to either manually set their bids or if they have enough conversions per month, use Google conversion optimizer where Google is setting the bid prices either at the Ad group or well, actually at the keyword level or if they have Google display network at the topic replacement level according to a target CPA or Cost Per Conversion that the advertiser designates.

Philip: So this is a bit of a complex area. As you say, if you’re relatively new and it comes down to your great point at the very beginning how much control do you want and how much control do you want to give to Google. How much time do you have and how much effort you’re going to put in and how much you want to let Google take over.

So we’re both agreeing that you should be setting it towards manually set your clicks and you want to change your bid price according to how well that keyword is performing, not just on click through rate but on conversion rate.

David: Exactly.

Philip: Do you find you have a lot of success with moving towards the conversion optimizer across all your campaigns? Let’s say you moved a hundred campaigns of your clients over to Conversion Optimizer. How many times would Google actually get a bidder CPA than what you were getting manually?

David: Well, let me start answering that by saying that – you mentioned Acquisio earlier. Acquisio is an example of a couple of third party products that I believe do search conversion optimization, search bid automation better than Google can and that is because these tools take into consideration multiple visits to the site before conversion takes place. A phenomenon that’s often described as attribution or multi funnel action.

Philip: Right.

David: So those tools tend to be somewhat expensive usually used by agencies and big advertisers so let’s put those aside for a second. Let’s split your question into two. One is the Google Display Network and the other for search.

For Google Display Network, I believe that Google is uniquely well qualified to automate the bidding and that’s because they know the conversion behavior of every site in their network.

They know the conversion behavior of every site at every time of day and every geographic location. So they have a ton of data upon which to base their bid pricing and they can change their bid pricing minute by minute or hour by hour, day by day.

So, my default behavior is to run display network campaigns until they’ve accumulated enough conversion and now that’s only 15 per month, 15 conversions per month and then turn it over to conversion optimizer.

Now there’s little kind of confusing element of setting conversion optimizer and that is when Google first introduced it asked advertisers to designate a maximum cost per action or CPA.

I won’t even describe what that is. It turns out it was confusing so Google introduced the concept of specifying a target CPA which is the way most advertisers think I think. So that’s Google Display Network.

Google Search Network, if I’m using Acquisio, I don’t even bother using Google’s conversion optimizer for search campaigns. If I’m not using Acquisio, if the advertiser is too small for example, I have no problem with turning it over to conversion optimizer and to ultimately answer your question, I’ve seen great results.

I actually did some testing before Google released this to the general public and I even saw – now this is a little bit tricky. I mean I don’t know what the laws are like in Australia but I don’t want to get in trouble here.

I even saw that turning on the conversion optimizer and then turning on broad match where I hadn’t used it before produced more conversions at or below my target CPA and didn’t result in runaway spending as a broad match campaign without some kind of device like this.

Philip: That’s interesting.

David: Yeah.

Philip: So how well do you think it works for the search? Let’s say you don’t have Acquisio, you’re doing search, you’ve been running a campaign for six months, you got a reasonable understanding, you’re doing most of the best practice stuff. Should advertisers be testing this thing straight up and how confident or how probable is it that they’ll get a better CPA?

David: They won’t get a better CPA. They’ll get – the promise is that they will get more conversions at or below the target CPA. And I believe there’s a – this has not been verified by Google but I believe that there are a couple of things going on here.

One of them is that Google is testing variations of the keywords that are being explicitly included in the ad groups. I think Google is kind of automatically adding negative keywords or the negative keyword behavior. So it can be a great time saver, it can work great. Google is obviously operating off of lots and lots of data.

They know the conversion behavior for the keyword across every advertiser campaign. So the caveats are it seems to work better and this kind of makes logical sense. It works better when there are many conversions.

So it doesn’t work at all with fewer than 15 conversions per month but it seems to work better with many, many conversions like into the getting close to a 100 over 100 into the thousands.

Philip: That’s right. When did they – they recently lowered this limit, haven’t they?

David: Yeah it’s been about a year. It was initially I believe 50, then went down to 30 and then down to 15. So the caveat there is if you want to be prudent, maybe don’t turn it on till you get above 15 a little bit at least.

Philip: Yeah I’d probably be a bit more generous than that. Maybe say 30 or 50.

David: Sure.

Philip: But I’ve seen different things so I guess depends on how risky you want to be, how aggressive you are, how much focus you’re going to make-

David: Exactly.

Philip: And a note as well to people if they are interested in trying the setting that you may actually see worse results in the first few days once you’ve turned this setting on, right? Do you see that as well?

David: Yeah absolutely, that’s a very good point. It’s like a human in that it’s not going to get it exactly right in the first few minutes. I’ve seen, well, this was more when they first released it. I think it’s improved but I’ve seen up to two weeks of kind of fluctuating results.

I haven’t seen any kind of runaway spending so I don’t think there’s a huge risk but I do know that lots of advertisers that have tried this have not had the patience to wait until the results stabilized.

Philip: I find when I hit a week, I seem to have got a little bit nervous and lose patience.

David: Sure. If you’re working with clients they lose patience.

Philip: They lose patience after a day.

David: Yeah exactly.

Philip: Okay, I think that’s a pretty good overview of bidding. As we both agree, we could speak about bidding on its own for days. So we’ve got a little bit of time left. Let’s talk about the future David, I know you’ve been in the industry a hell of a long time. You’ve written loads of books, you’re more experienced than most. What do you think we’ll be talking about in a year’s time regarding search and Pay Per Click?

David: Well a couple of things. Number one, Google has said publicly that they’re working towards a time when Google Adwords is simple enough for most advertisers that the advertiser will just need to submit the URL of their website and their budget and Google will figure out everything that’s necessary to get traffic to the site and maximize, at least, click through rates, if not conversion rates.

So Google really wants to work towards the time when Adwords is brainlessly simple for every advertiser. Now that doesn’t necessarily mean that they’ll take away the control that experienced advertisers really need. It just says that they’re trying to make it simpler and I think that’s a great thing.

Philip: Which is sort of what they’re trying to do with Adwords Express to some degree, step in that direction.

David: Yeah, I think Adwords Express is not quite self served yet but it’s a step in that direction. I think they’re accumulating experience. That’s a big experiment that will lead to the capabilities I just described. So that’s way out there.

In the nearer term, Google has also publicly stated that they want to move the conversion action as close to these search action as possible. In other words, for a lot of users this doesn’t describe anyone in your audience probably because we’re all kind of technical and a little bit geeky but for the majority of real users the act of doing a search, going to a website, finding what they need or want, conducting the conversion transaction, multiple step purchases or web forms is just too much and too complicated.

So Google wants to try to move as much of the complicated action as close to the search experience as possible and that’s why they have created product listing ads where you see the actual price of a product, you see a picture of the product on the search results page.

You and your listeners may have heard of some of the betas that are going on. The beta test of forms that appear right in the search results page to collect email addresses for email lists or even short forms for collecting information that a sales person will follow up on. So look for that over the next year as well.

Philip: Have you heard any rumours about including site links or ad extensions at the ad group level?

David: Yeah I think that will definitely come. So site links at the ad group level along with statistics within the Adwords interface that will show you per site link what the performance data is.

Another thing that’s coming I believe is search retargeting and I haven’t tried this yet but I think it has a lot of promise. So search retargeting would work this way and will work this way.

A person will do a search, click on an ad, go to the website, not convert and then traditional Google Display Network remarketing would take over. In other words whenever that person who has not yet converted goes to sites on Google’s display network, they’ll see ads for the same advertiser.

Philip: So what about retargeting actually when they are on Google right, so based on my search history, I will see – you can, let’s say I’ve been searching a lot of different fishing products. We were talking about kayak fishing before we started recording and then having ads targeted towards me or people willing to pay more to target a fishing ad towards me on my sixth or seventh search.

David: I haven’t heard of anything down the pipe on that one although that phenomenon happens already to a smaller degree. It’s called session based ads and you and your listeners may have seen this.

You do a search for travel in Thailand, then you switch topic and you do a search on equipment for a fishing kayak, you’ll see ads for travel in Thailand in response to the second search query and it seems incongruous.

Lots of advertisers don’t like it because they don’t think it could possibly work but according to Google, frequently, a second exposure of an ad to the first search query produces good results.

Philip: Excellent. Well David, we’re pretty much over time. It’s been great chatting. What are your plans? What are you focused on these days?

David: Well I’m kind of in semi retirement. I’ve got a few clients and I’m taking on clients now and then. I’m still speaking at conferences. I just – I think the last one was PubCon in Las Vegas. I’ll be speaking at PubCon at New Orleans in April I believe. Hopefully, SES in New York in March. So I’m still active. I spend a lot of time on Twitter tweeting about good PPC related resources.

Philip: Excellent. You want to share your Twitter profile. We’ll also link to that.

David: Sure. It’s @szetela.

Philip: It’s a very unusual surname. Are there many Szetelas around?

David: There’s a few in every location. It’s a Polish name.

Philip: Okay. Well, we’ll have to get you out to Sydney. SMX, as I said before the show, in April.

David: I’d love that.

Philip: We can take you kayak fishing. Do you know David Booth?

David: I don’t believe so.

Philip: He’s one of the founding partners of Cardinal Path. He does a lot of the Google Engage training when he comes out here. Took him out a couple of months ago. We didn’t catch much but it was cold water. So the water is warming up. We definitely have to get you out there if you come visit, we’d love to have a couple of beerDavid Szetela Podcast

Philip: Good day and welcome to another episode of the Marketing Secrets Podcast where we interview the world’s leading experts in online marketing.