Google Ads will automatically transition existing Smart Shopping campaigns into Performance Max campaigns between July and September 2022, the company announced Thursday. Local campaigns will automatically be transitioned between August and September 2022.

The company will also launch a “one-click” self-service tool in Google Ads for advertisers that would like to transition specific Smart Shopping or Local campaigns ahead of the dates mentioned above.

Why we care. “Based on early testing, advertisers who upgrade Smart Shopping campaigns to Performance Max see an average increase of 12% in conversion value at the same or better return on ad spend (ROAS),” according to Google. However, results can vary, so it may be worthwhile to test out your transitioned campaigns with the self-service tool once it’s available, ahead of the forced transition deadline.

This is a significant change to how Smart Shopping and Local campaigns work. Advertisers that don’t want to transition those campaigns over to Performance Max should begin exploring other options, as these campaign types (as we know them) will disappear by the end of September.

Farewell, standalone Smart Shopping and Local campaigns. Once existing Smart Shopping and Local campaigns are transitioned to Performance Max, advertisers will no longer be able to create new ones. This automatic process is scheduled to conclude by the end of September 2022.

How to transition your Smart Shopping and Local campaigns. Google Ads will be offering a tool for those that wish to transition their campaigns to Performance Max ahead of the automatic transition window. The tool will be available for Smart Shopping campaigns starting in April, with support for Local campaigns starting in June.

Advertisers can use the tool to transition specific campaigns, or all of them at once. Learnings from existing campaigns will be used in the new Performance Max campaign.

Additionally, all advertisers will be able to transition their campaigns via the Google Ads API later this year.

Smart Shopping and shared budgets. In December 2021, Google announced that, beginning on February 15, 2022, all existing and future Smart Shopping campaigns will use a shared budget type. The change won’t have any impact on performance and the campaigns will continue to behave like a standard, non-shared campaign budget.

It was odd for Google to make such a change, but now we know why: the platform is updating its systems to prepare for the Smart Shopping to Performance Max transition.

“We need to make this change in order to prepare for the upgrade, and are doing so without changing the existing product behavior of Smart Shopping Campaigns (which don’t have support for shared budgets),” Google told Search Engine Land.

There will be messaging in the user interface explaining this change and marketers don’t have to take any action.

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Google Ads scripts now supports asset-based video ads, the company announced via its developer blog on Monday. This functionality replaces the previous media-based video ads. This announcement follows the same change in v9 of the Google Ads API, announced in November 2021.

Why we care

Advertisers that have scripts to create new video ads must migrate their code by February 28, 2022. After that date, media-based video ads will no longer be supported and their scripts will start failing with errors.

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Microsoft released its earnings report yesterday for its second quarter. In it, we learned that search and news advertising was up 32 percent year over year. LinkedIn revenue was grew by 37 percent.

The company lumps together search and news advertising revenue and subtracts traffic acquisition costs (TAC), which is money Microsoft pays to Bing Ads network publishers and news partners.

In Q2, Microsoft reported more than $3 billion in revenue from search and news advertising. This was fueled by higher revenue per search for the holiday quarter, according to the company. On the conference call, CEO Satya Nadella noted the company’s total revenue from advertising, including LinkedIn, has surpassed $10 billion over the past 12 months.

Speaking of LinkedIn, it accounted for another $3.5 billion in Q2 revenue for Microsoft.

Overall, Microsoft reported record revenue of $51.7 billion for the quarter ending Dec. 31, 2021.

Why we care. Microsoft said its Q2 advertising revenue growth was better than expected, which is clear evidence of a strong advertising market. Holidays drive up cost-per-click prices for advertisers, and revenue for the ad platforms every year. But clearly, companies continue to invest money in paid search advertising, which is a proven channel to generate results. As for Q3, Microsoft forecasts more growth, but in the “mid- to high-teens” range.

Source: Microsoft Earnings Release FY22 Q2

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Google will replace Federated Learning of Cohorts (FLoC) with a new interest-based targeting proposal called Topics, the company announced Tuesday. The Topics API will select topics of interest (based on the user’s browsing history), without involving external servers, and share those topics with participating sites.

Google plans to launch a developer trial of Topics in Chrome, including user controls (more on that below), soon. The final iteration of the user controls, as well as other technical aspects of how Topics works, will be determined based on the trial and feedback, Google said.

How Topics will work. “With Topics, your browser determines a handful of topics, like ‘Fitness’ or ‘Travel,’ that represent your top interests for that week based on your browsing history,” Google said in the announcement.

When a user visits a participating site, Topics selects three topics to share (one from each of the previous three weeks) with the site and its advertising partners. Up to five topics are associated with the browser. Topics are stored for three weeks, with topic selection occuring on the device, without involving any external servers, including Google’s own servers.

Google is starting this initiative with about 300 topics “that represent an intersection of IAB’s Content Taxonomy V2 and also our own advertising taxonomy review,” said Ben Galbraith, Chrome product director, “This is a starting point; we could see this getting into the low thousands or staying in the hundreds [of topics].” 

“With the Topics design, we look at the domain or subdomain of the site to map the topic to that site,” he said, explaining that Google does not parse the text within an article to determine the appropriate topic.

If a site does not participate in the Topics API, “Then it doesn’t provide a topic nor does it receive a topic,” Galbraith said. The site itself or its advertising partners can opt into the Topics API.

Google has also published a technical explainer containing more details about the Topics proposal.

The difference between FLoC and Topics. One of the main distinctions between Google’s previous targeting proposal, FLoC, and the Topics API is that Topics does not group users into cohorts. As the Electronic Frontier Foundation has pointed out, fingerprinting techniques could be used to distinguish a user’s browser from the thousands of other users within the same cohort to establish a unique identifier for that browser.

Additionally, under FLoC, the browser gathers data about a user’s browsing habits in order to assign that user to a cohort, with new cohorts assigned on a weekly basis, based on their previous week’s browsing data. The Topics API determines topics to associate with the user on a weekly basis according to their browsing history, but those topics are kept for three weeks.

And, Topics selects three topics to share with sites and advertisers, whereas FLoC would share a cohort ID.

User controls and privacy measures for Topics. Google is building out controls for Chrome users that would enable them to view the topics that they have been associated with. Users will have the option to remove topics or disable Topics entirely. At this time, there is no plan to enable users to manually add their own topics.

Additionally, topics are curated to exclude potentially sensitive categories, like race or sexual orientation, Google said.

“Time will tell” which browsers will adopt. Google is in the early phases of implementing the Topics API, so other browsers likely won’t have had a chance to evaluate it. But, Chrome was the only browser to adopt its predecessor (FLoC), so it’s unlikely that Firefox, Safari, Edge or other browsers will adopt Google’s proposal this time either.

“We’re sharing the explainer, which is the beginning of that process to discuss with other browsers their view on the Topics API, so time will tell,” Galbraith said.

Why we care. Google is deprecating third-party cookies in Chrome sometime next year and now we have a better idea of what audience targeting options will be available.

Prior to the Topics API, Google ran into a number of challenges with FLoC, including lack of adoption, industry pushback and regulatory issues. The company has likely addressed some of those challenges with this new proposal, but adoption among other browsers remains unlikely, which could impact how big of a user base advertisers are able to get in front of.

For now, Google plans to keep to its timeline of having all of the Privacy Sandbox APIs available for adoption during Q4 2022, but it may update its Privacy Sandbox timeline if adjustments must be made.

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If you’ve followed along with the news recently, Google has confirmed that Target CPA (tCPA) is not planned to sunset in 2022. You may be asking, “Why is this even news?” Well, the recent Google Ads video “Expert Series: Welcome to 2022” had many folks (myself included) confused as to the future of non-value bidding strategies with unflattering and cryptic mentions about the popular bid type.

One thing that we’ve seen time and again with Google Ads is that smoke usually leads to fire. In this case, you may want to take steps today to get your value bidding plan in order.

Google’s tCPA & Max Conversions comments and guidance. At the beginning of the “Welcome to 2022” webinar, Google Rep Neha Shaikh made the statement:

“…it [tCPA] is something that we’d like to leave behind in 2021, because we believe that every conversion should get a value…”

Later in the webinar, when talking about enhanced conversions, Rogier Kentie, digital marketing strategist at Google, went on to say:

“Target CPA and Max Conversions are not supported. Because, as we said in the beginning, we’re moving away from tCPA and we’re moving away from Max Conversions because every conversion has value.”

Think I’m reading too much into it? Well, later in the presentation Mr. Kentie went on to state that they no longer advise using the two bidding types:

“That is why we won’t advise to use Target CPA and Max Conversions anymore because the one and the zero are the only two values that are actually coming in.”

Having worked in Google Ads since its inception, these statements have my spidey senses tingling as to the long-term viability of non-value-based bid strategies. As a result, we are expediting value-based bidding for some of our clients.

Value-based conversions are an improvement. Thanks to Ginny Marvin, ads product liaison at Google, we know that there is not a plan to sunset tCPA or Max Conversions in 2022, but for many clients (even B2B!) you can drive better results when moving away from these binary conversions. Google is objectively right on this point.

Generally speaking, a contact form lead does not close at the same rate as a demo request lead, the demo request is typically more valuable. What’s worth more? A newsletter sign-up or a request for consultation? The point is that not all conversions are created equal and “moving away” from tCPA is a noble idea. That being said, “moving away” also creates more work for advertisers.

How to determine the value of conversions. Unlike e-commerce, a non-purchase conversion can be complicated. Some conversions may be straightforward and easy to track (online dining reservations, appointment bookings, etc.) while other conversions with complicated or lengthy sales processes may take more work.

Finding the true value of each conversion is a routine process for the trained professional, but it can be difficult without reliable data. If you have a CRM that is actively used (with good standardization), you’ll be ahead of the game. If you don’t have some way to track the Google Ads conversion into a qualified lead, then you’ll want to start. For many companies, this process can be a uniting principle between marketing and sales to make sure you have complete alignment on strategy.

The first thing you need to do is list and define all of your conversions in Google Ads (or on your site if you haven’t set that up yet). From there, you should look at where in the funnel that conversion lies. Is it a top-of-the-funnel content download? Is it a bottom-of-the-funnel demo request? What happens to each after the conversion has occurred?

Getting to a uniform lead type will help to reverse engineer the value that should be assigned to each conversion.

Some conversions, like a newsletter subscription or membership signups, are easier as you can pull average the lifetime value, or a one-time conversion value if applicable.

For conversions with complicated sales processes, we generally look at the conversion rate of the lead type into a sales accepted/sales qualified lead. From there, you can input the average conversion rate of SQL to sale/deal and figure out what each lead is worth.

Sample math on this may look like this: Average Deal Size * Lead to SQL Rate * SQL to Deal Rate = Lead Value

In this example, if your average deal size was $10,000 with a Lead to SQL rate of 10% and a SQL to deal rate of 25%, the value of a lead that you could use as a Google Ads Conversion would be $250. Of course, you could add in more detail about MQLs, opportunities, additional costs and any other meaningful data points for you and your sales process.

It should be noted that there are many, many ways to find this number, and if you have enough data, you can use conversion-specific percentages down to the deal level. While this process could be an entirely separate article, you should get a rough idea of what each conversion is worth.

Once you have reverse engineered what an average conversion is worth, you can input those values into the Google Ads goals. You’ll also be able to get another benefit within Google Analytics when you put the conversion value in for each goal — Page Value metrics. Page Value metrics can help show what content is the most valuable (not just driving goals) by showing the influence those pages had on Goal Value.

Why we care. When reading the tea leaves of the “Welcome to 2022” video, some people (me) see Google moving in a different direction than tCPA or Max Conversion Value bidding. Whether you believe it or not, taking the time to actually determine the value of leads will unlock value-based bidding.

The benefits of this include the potential for smarter Google Ads bidding if you have multiple conversions and a truer view in Analytics using Page Value. Plus, you won’t find yourself scrambling if the smoke does lead to fire down the road.

The post tCPA may not be going away (yet), but it should: Why it’s time to embrace value-based bidding appeared first on Search Engine Land.

A technical issue impacted serving of ads on YouTube inventory between January 18 and January 21, 2022 for some Discovery and Performance Max campaigns, a Google spokesperson has confirmed to Search Engine Land. The issue has been resolved and Google’s ad delivery systems are now working as intended, Google said.

Here is the official statement from Google:

“Our team uncovered a temporary technical issue that affected serving on YouTube inventory between January 18 and January 21 for a subset of Discovery campaigns and a small portion of Performance Max campaigns. We have resolved the issue and everything is now working as intended.”

-Google

Why we care. Advertisers using Discovery and/or Performance Max campaigns should make note of these dates, as the issue may have affected their ads and, by extension, associated KPIs. As with any bug that affects reporting or campaigns, stakeholders should also be informed.

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