Parker Jessup

November 21, 2017
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Google Spending Change Could Mean Calamity for Holiday Advertisers
If you advertise on Google, imagine this nightmare holiday scenario: you already have a bid strategy in place for Black Friday and Cyber Monday holiday shopping. Everything looks good before you head home for Thanksgiving, but you get back to work to discover your budget ran out mid-morning on Black Friday.

A recent (and underreported) change to Google’s advertising cap could make this a reality for advertisers.

What’s Changed?
Google has always had the ability to exceed an advertiser’s daily budget by up to 20%. However, they recently announced changes to this policy, allowing an advertiser’s spend to now exceed their budget by 100%. Google is anticipating that the over-delivery of ads will result in advertisers obtaining more clicks and conversions, but there are growing concerns amongst search advertisers. Google’s argument stems from the fact that search behavior is inherently volatile, and algorithmic technology is nimble in its ability to spot an efficient opportunity. Long story short, they’re forcing more flexibility in day-over-day spending.

Below is a notice from Google’s AdWords Help site detailing the ad change:

Screen Shot 2017-11-21 at 12.18.35 PM

What does this mean for days with high search volume that are historically inefficient for a brand? What are the implications for holiday/seasonality-based spend strategies? Google doesn’t have a client’s data on hand, which limits the search giant’s understanding of how different tactics drive business efficiencies to meet client KPIs. Cyber Monday, for example, poses a challenge to advertiser’s budget as the holiday season quickly approaches, with ecommerce shopping growing by 23% year-over-year.

What Can You Do About It?
In what ways can advertisers reserve parts of their budget in order to maximize visibility when it makes strategic sense? Here are a few ways to reduce the potential disruption of your program:

  • Negative Keyword Strategy:
    • With less control over daily spend potential, ensuring proper exclusions are in place will minimize errant spending
  • Fluid Budget Management:
    • Keep a closer eye on day-over-day spending while setting budgets, as there is likely to be an increase in spend potential/volatility
    • Regularly look at search query reports to inform how query matching has evolved as a result of the change, siphon off advertising on irrelevant terms and focus investment in proven areas of efficiency

 

Authors: Parker Jessup, Digital Media Director, and Itzel Soto, Intern at Engage