Is Adwords Turning Into Big Brother?

Over the past few weeks, Google has rolled out a few changes that seem to imply that they know what’s best for all of us. (I know this isn’t new, but bear with me…) There’s Google Plus, with its +1 boxes on search results & ads that you can’t opt out of; and the SSL fail that’s masking as much as 20% of organic search query data.

Earlier this week, there was a post on the Inside Adwords blog, announcing that all Adwords campaigns using Enhanced CPC and Conversion Optimizer would have ad rotation automatically switched from “optimize for clicks” to “optimize for conversions” – unless you opt out by filling out a form.


Thing was, the link to the form went to a 404 page.

And then the post was pulled down shortly after it went live.

It’s back up now, and the form actually works. But what the heck was that all about?

Let’s set aside the fact that Adwords obviously jumped the gun on a blog post that wasn’t ready for prime time. Anyone who blogs has probably done that once or twice.

The bigger issue is that Google is once again taking choice out of the hands of marketers and advertisers, opting instead to decide what they think is best for us.

In some ways, this makes sense. The whole point of using Enhanced CPC and Conversion Optimizer is to try to improve the conversion rate and cost per conversion of your campaigns. Therefore, using the “optimize for clicks” setting is at odds with the Enhanced CPC/Conversion Optimizer algorithm. In fact, it’s likely that this factor alone has led to less-than-stellar performance for campaigns with these settings – leading advertisers to say that Enhanced CPC and Conversion Optimizer don’t work. That’s bad for Google.

Also, remember that Optimize for Clicks is the default campaign setting. This means that many novice advertisers are using this setting unwittingly. Consider a scenario in which these same novice advertisers read a blog post touting the benefits of Enhanced CPC or Conversion Optimizer – so the novice says, “Hey, let’s try that,” and then sees poor results because their campaign is still set to “optimize for clicks.” That isn’t good for Google either.

But here’s the thing: The blog post said that all campaigns would be switched over unless you opt out by filling out a form. This implies that advertisers won’t even have the option of choosing “optimize for clicks” for Enhanced CPC and Conversion Optimizer campaigns.

And this is why I have a problem with it.

I’m fine with changing the default for these campaigns to Optimize for Conversions. That’s totally ok. What I’m not fine with is taking the choice out of the hands of the advertiser and putting it in the hands of Google. That’s akin to the fox guarding the hen house.

I find this move even more puzzling in light of the flap over the SSL thing. Ever since that announcement, SEMs have been raising holy hell, asking for more data and transparency. It seems like a bad move to decide to make this change now, on the heels of all the furor – and right before the holidays to boot.

I recently spoke with our Adwords reps about some of our client campaigns. It was one of those “let us make optimization suggestions for you” conversations, so I always take those with a grain of salt. They actually had several good suggestions, so it wasn’t all bad. But they really pushed me to switch all of our client campaigns from “rotate” to “optimize for conversions.”

Bad move.

I good-naturedly told them that they just hit a hot button (and they obviously don’t read my blog and have never heard me speak at conferences), and they quickly backpedaled. But still – why is Google all of a sudden pushing “optimize for conversions” rather than letting us make the choice ourselves?

Has 1984 arrived a couple decades late?

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Comments

  1. Awesome post Mel! You and I both know why Google wants people to optimize for conversions instead of for clicks/cpc…

    Hypothetically if your “CPA” is $10 most marketers know that doesn't mean let's make the cost of our conversions equal $10! We strive to get the cost of our conversions as low below that $10 threshold as possible. Google on the other hand would see this as an opportunity to push the cost as close to that threshold which would raise CPC's and eCPM (effective Cost per Thousand Impressions) which is something they report on in their financials.

    Merry Christmas & Happy Holidays! :-)

  2. Yeah, Google changing settings for advertisers somehow doesn't feel right. But I can't help admiring this move from Google. Looking at the mechanism of optimize for conversions this makes perfect sense.

    Without conversion optimizer or enhanced CPC there is a fixed CPC bid. In this case it's best for Google to use the highest CTR ad: more clicks, more money for Google. However, with conversion optimizer or enhanced CPC, there are no longer fixed CPC bids. If conversion rate goes up, so does the dynamic CPC bid.

    Now the beauty of optimize for conversions is that it optimizes for maximum number of conversions – not just for maximum conversion rate. The rationale is that you need clicks in order to get conversions. In other words, CTR and conversion rate are equally important in this. Google basically optimizes for CTR x conversion rate.

    Because of the connection of conversion rate and dynamic CPC bids, the ad with the highest value for CTR x conversion rate is also the one with the highest value for CTR x CPC bid. In other words, Google virtually optimizes both CTR and CPC bid. Or, more to the point: they optimize their own revenue.

    … and all that in a way that's good for the advertiser, too. Merry christmas ;)

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