Does Google’s Conversion Optimizer Doom SEM’s?

Google recently announced they would be switching any account using Conversion Optimizer (CO) to the bidding option to “focus on Conversions” rather than “Focus on Clicks”, a minor change that is easily reversed, and in most cases will help advertisers.

To start using Google’s CO, you add conversion tracking to your site and amass 15 conversions within 30 days. Then tell Google what you are willing to pay per conversion, a maximum or average value, and it manages your bids. With this tool even a novice PPC manager has one of the most powerful bidding algorithms at her disposal.

Does this spell the end for SEM agencies and their advanced bidding platforms?

There are a number of agencies who tout advanced algorithms and tools that will quickly adjust bids for keywords based on conversions. And these tools are in fact very advanced, often looking at daily data to make sure bids are correctly set. Many even go as far as looking within the hours of a day, or day of the week, or geographic data to further refine bidding. We do that at Website Publicity, too. But no one has the insight into data like Google. It knows what sites a visitor browsed before, previous searches, user’s behavior and preferences, and a wealth of information it would never give to us advertisers. This information gives Google’s bidding models an advantage even the most sophisticated SEM could not reproduce by allowing bids to be adjusted on a level almost to each individual’s likelihood to convert.

In fact, CO is so efficient we use it as a very valuable add-on to our own reporting system to get the absolute most of out a client’s budget.

So, what does a SEM bring to the table if they are letting Google manage bids?

Bidding is only one component of a well-run search campaign, although some SEM’s apparently place on inordinate focus on it. There are many other metrics that can be improved, and when they are, then Conversion Optimizer can be effective in adjusting bids. In reality, the human element is more important than ever and a talented marketing expert who considers all elements of a PPC campaign can make the difference between stagnation and continuous growth.

SEM’s should renew their focus on the “Marketing”

There is still a significant amount of expertise required to research appropriate keywords and sites for ads. Finding and organizing keywords for optimal performance, and then designing and testing landing pages is needed to ensure campaigns placed into CO are high quality. Garbage in = garbage out is all too true, so the higher quality account you apply CO to, the better the results.

For ecommerce advertisers often the goal is to drive Return on Investment rather than a simple cost per conversion. Since some sales have an average order size higher than others, it may seem that using CO is not possible. This is where segmenting traffic can be extremely useful. By developing groups that have a very narrow range of order sizes, you can adjust CO to deliver sales that do meet an ROI goal. This can be the difference between an account that meets current expectations and ROI (basic bid management) versus one the meets expectations and grows in size as well (with the addition of Conversion Optimizer).

With CO, ad text becomes a renewed focus; if a campaign can increase click through rate then it will be able to deliver even more traffic and leads. Of course the real trick is to increase CTR without hurting conversion rate, and that is why a SEM’s task today has to include aggressive testing of ads and landing pages together to develop ever refined segments and customize marketing to each.

Lastly, in the case of the many advertisers who are generating leads in order to follow up with sales material, it is critical to remember the process does not end with the lead. A strategic thinking SEM will be working to help you identify which leads are becoming customers and those that are not. Through this process you should be able to develop more conversion points and set more than one cost per conversion target. Some campaigns will have a much higher lead to sales closing rate, and these will have a higher cost per conversion in CO. Running entire accounts with just one target in CO is missing the real power of the tool, and the real value a strategic SEM will bring to you.

Summary

Conversion Optimizer should not be considered a threat to a SEM, unless all the SEM is offering you is their bidding tools. Knowing one of the most complex and efficient algorithms is working on your account (CO) frees up the creative time of the SEM to do what they should do best; Marketing.

The newly available Think Insights from Google provides tools that focus on different sectors of the virtual world within one centralized webpage. While most of the information is directly from Google, a large portion of the studies is the result of collaborative research. One great tool is “Real Time Insights Finder” (image below) which allows users to figure out what people are watching, searching for, blogging about, clicking on, and more. This tool launches into other tools such as: Search Insights and Google Trends.

Google Think Insights has created a great hub for marketers to keep up with what’s new and what’s next in the digital world.