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Frederick Vallaeys (Optmyzer): ‘We are currently witnessing the biggest mindshift in PPC in the past 20 years’

14 June 2022

Nowadays automation handles most details within PPC efforts, which according to Frederick Vallaeys, Cofounder & CEO at Optmyzer and speaker at Friends of Search 2022, ‘forms the biggest mindshift in PPC in the past 20 years.’ The automated Performance Max Campaigns that Google will introduce shortly are part of this movement. We got the chance to talk to Frederick before his talk at Friends of Search.

Nice to have you back on stage at Friends of Search again in Amsterdam and Brussels. What are you looking forward to the most visiting Friends of Search 2022?

I can’t wait to eat ‘Stroopwafels’ and drink a ‘glas melk’ (glass of milk). The Netherlands is a great market for us as a company and I’m looking forward to meeting customers to find out about their recent challenges. These in-person interactions always lead to interesting ideas for new PPC management tools that can make advertisers’ lives easier. The Netherlands is very advanced in PPC advertising, which adds to the value of the feedback. Belgium is great because I’m Flemish so after speaking at Friends of Search in Brussels I will have the opportunity to visit my ‘Oma’ (Grandma).

In your book ‘Unlevel the Playing Field’ you tell readers about the biggest mindshift in PPC. Can you briefly tell us about the concept you write about in the book?

Currently we are witnessing the biggest mindshift in PPC in the past 20 years. We are used to managing details: managing bids, ad texts, queries, etc. to get more conversions from our campaigns. But nowadays automation handles most of these details so our roles need to shift to managing higher level details at the boundaries of the ad systems. For example, it’s more about optimizing structured data, setting the right goals and providing feedback to the system via better value reporting (in conversion tracking and with offline conversion data).

Another important element of modern PPC is automation layering. In my first book, Digital Marketing in an AI World, I wrote that humans should play the roles of Doctor, Pilot and Teacher to get the most out of automated PPC. But some of these roles can be very time-consuming. By using simple automations like scripts and PPC tools, you can recoup a lot of that time while still guiding the sophisticated machine learning algorithms from Google to do the best job for your business.

Remember Google’s machine learning can only optimize based on factors it knows. Advertisers should enhance performance by adding signals that are critical to their business and that Google may not be aware of. For example, do your customers book more luxurious hotel rooms when the stock market performs better? Perhaps that means that you should adapt your messaging as the stock market performance changes.

Google quite recently introduced Performance Max campaigns as its newest campaign type within Google Ads. Essentially, you could have a single campaign to help you manage creatives, targeting, channels, placements, budget and campaign goals. What are your thoughts on the concept of this campaign type?

It is another way for Google to deliver advertisers more automation. The concept of the campaigns is quite good and it makes advertising very easy. Most people I talked to report good results. The downside of the campaign type is the portfolio management of the channels. It aims to maximize conversions while staying inside the tCPA or tROAS boundaries but because this is averaging everything together, underperforming ads can be subsidized by overperforming ads. This hides optimization opportunities behind a screen of automated bidding. I’d rather know that some segment is underperforming and address the root cause.

What are your experiences with Google’s newest campaign type Performance Max? The good and the bad..

The additional reach by using all the different placements and channels drives incrementality for most advertisers. The lack of control and insights makes it difficult to learn from the campaign performance to optimize your account. A broader downside of the automation within Google Ads is that underperforming targeting options can be solved by bidding lower. Let’s say performance is less in Paris, Google Ads will bid lower in Paris. But why is Paris underperforming? You need to understand why and for example change your proposition for Paris.

I do love the concept of ads that are automatically created on the fly. In our recent RSA study, we see a tremendous 2x lift in impressions for ad groups that use RSAs. And even though conversion rates are about 11% lower, at the end of the day, automated ads drive more conversions. But I’m not a big fan of Ad Strength right now. It is a best practice score based on what everyone else has done, instead of your specific situation. Let’s say you work at the marketing department of Nike and you would write ‘Nike – Just Do It’ in your ad copy, Ad Strength might say: The Ad Strength of this ad is bad, because the term ‘sneakers’ is not in the copy. It’s also not a score that takes performance into account so when this new line of messaging delivers amazing results, it might still recommend you change the headline. I think the Ad Strength will get more useful over time, but for now advanced advertisers can probably ignore it.

Should an advertiser start testing this? If so, what would be your recommended approach?

Definitely Yes. Especially if you’re doing Smart Shopping campaigns or Local campaigns, Google will soon upgrade these campaign types into Performance Max campaigns. But even if you’re not running Smart Shopping or Local campaigns it is important to test it. You can get interesting insights from the audience data within Performance Max and add those audiences to your regular shopping, search and display campaigns. It is also important to build knowledge on the right approach for your specific account and how to incorporate Performance Max in your Google Ads strategy. Depending on the number of products you have, you should decide to create one or multiple Performance Max campaigns. Especially if those products have different margins, and hence different ROAS targets, it is important to split out the products in multiple campaigns.

Performance Max has less reporting data, less manual optimization options and 1st party data seems to unlevel the playing field ;-). How do you think this will impact the whole ecosystem of PPC advertising?

With all automations you still have to know the opportunities within Google Ads. In-house teams and agencies will need to create the right creatives and translate business objectives into campaign goals. It will also become even more important to feed Google Ads with the right business data, to be able to optimise the campaigns for your specific situation instead of on generic factors.

Hypothetically speaking: I just graduated from college in 2022 and would like to start a career of PPC advertising, where should I start? (next to visiting Friends of Search ;-))

One piece of advice: You graduated in a field with a ton of automation. Don’t forget the fundamentals of Google Ads, for example, how a target ROAS might use predictive algorithms to calculate the CPC that is used in the auction to ranks ads. When you know how that works, you will be able to understand how an event at your company, like a weekend sale, might impact performance and what levers you could pull to drive the best results in that scenario.

We’re really looking forward to your session. Can you give us a sneak peek of what you will be sharing on stage?

It is going to be about the biggest mindshift in PPC in the past 20 years. What I will talk about in my session is what modern PPC management looks like. We are not going to be talking about keywords or how to set bids. But we are going to talk about how to set goals and use business data to your advantage. I will also be sharing insights on the third round of RSA research we just completed last month, just in time for the upcoming migration from ETAs to RSAs at Google and Microsoft.