Is Performance Max Google’s ‘Big Short’?
The opaque workings of Google’s Smart Shopping successor could cost marketers plenty, writes Joey Dorrington.
Christian Bale, Brad Pitt and Ryan Gosling dazzled through the US subprime mortgage crash in the 2015 film, ‘The Big Short’. But the real star of the show was a dodgy financial instrument called a CDO or Collateralised Debt Obligation. CDOs were invented to blend risky ‘subprime’ mortgages with more desirable, higher-rated debts. Masked within a banking ‘black box’, they gave the outward appearance of AAA-rated investments. But inside was a toxic jumble that eventually triggered the GFC.
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.
Joey Dorrington is chief operating officer at Fenton Stephens
Interesting suggestion to not get too close to your partners. Not sure how that works.
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Well said, my sentiments exactly while trialling this campaign for a few of our clients, but with 0 visibility on where our “results” are coming from.
I also hate that shopping has been forced to pmax, now potentially cannibalising search and display.
Ripping article, I’ve been in marketing for a few years now yet have only been exposed to eComm recently.
This captures my entire realisation when I found out Google ‘Smart’ Shopping had no level of targeting, and was likely pushing branded keywords to boost surface level ROI.
The level of shady product iterations by Google (and then promoted by media agencies) is shocking.
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