Is Performance Max Google’s ‘Big Short’?
Seven years on from the film and Google has given the world its own black box, the ambitiously-titled Performance Max. From September, all Google Smart Shopping campaigns will become Performance Max campaigns. And by our estimation, brands could waste between 25% and 40% of their budget if they simply follow the instructions when rolling it out.
Not unlike CDOs, Performance Max derives its value from combining Google’s good assets (YouTube, Search) with its not-so-good assets (Display, Maps, Gmail) then packaging them in container especially designed to shield its inner workings from the outside world.
You just say what you want to achieve and Performance Max will do everything else for you. It’ll choose the keywords, the channel and even create the banner ads for you.
You can see what you put in and you can see the results Google give you. But you have no visibility of what happens between those two points.
Because of this it’s sensible to bring some caution to the table.
Looking back over Google’s history, the changes they’ve made in this space have been good for business. Google’s business, that is.
It used to be that you chose your keywords and off to market you went knowing exactly where your money was going. Rather than a black box it was a nice, clear Perspex one.
Then the sanctity of branded terms ended and clients’ search budgets doubled overnight as they now had to defend their own names against competitors.
Next, shopping campaigns came along and chose your keywords for you, often bidding up prices by bunching together terms you didn’t necessarily want. One thing that consistently happened was bunching generic terms (which cost more) with branded terms (which cost less) to create a hybrid, CDO-type beast which auctioned itself up and out through the roof.
That was okay, because we could counter this with negative-matching. So if we wanted people searching for ‘blue shoes’ but not ‘cheap blue shoes’ (because our blue shoes are mint) we could take the word ‘cheap’ off the table and off our shopping bill.
Then Smart Shopping turned up and that was the end of negative-matching. All in the name of ‘ease’ of course. Advantage Google.
Given that most marketing strategies can’t live without Google, here’s a couple of things to consider when working with Performance Max.
First of all don’t run it ‘out of the box’. You can’t see the search terms you’re paying for. You can’t see what channels are generating traffic. You don’t know what your customer did to get to your site. A particular campaign for one client appeared to generate $20k extra a week. But when we looked closer, we saw it was appropriating organic SEO traffic that you would normally get for free.
Assume that Google’s best practice is best for their business, not yours. In our experience, generic Performance Max campaigns can eat up as much as 40% of a budget through purchase of unnecessary brand terms and/or cannibalisation of organic search.
Avoid this with a bespoke strategy and the selective use of segmentation, then put those savings to the bottom line or reinvest further up the funnel.
Secondly, don’t let your marketing team get too close to the Google reps. Treat them as you would any other supplier, with mix of respect and scepticism and at arm’s length.
Make sure that their product is working for your business and not the other way around.
Remember, at the end of ‘The Big Short’ the Wall Street guys kept the money while the taxpayers footed the bill.