Enhanced Campaigns: Google’s Grand Unification Theory

Early last century, Albert Einstein turned the world of established physics upside down when he introduced his theories of special and general relativity. Newton’s Laws, which had successfully driven the work of physicists for hundreds of years, were usurped by Einstein’s new theories.
At the heart of Einstein’s FIELD theories, which describe space-time, was his famous formula:

Okay, maybe you’ve never seen that before, but it is famous among theoretical physicists and cosmologists. The lambda, (Λ) is the cosmological constant, which we’ll touch on later in this article. Einstein’s most famous formula is, of course, E = mc2 which describes the conversion of mass to energy, as in that which happens in an atomic explosion.
It took the world of physics years to figure out what Einstein was even talking about, and then even more years for experts to work out whether he was right or wrong. As it turns out, Einstein was more right than wrong.

Google’s Grand Unification Theory Of Devices

In similar fashion, Google turned the world of paid search on its head last month when it unveiled Enhanced Campaigns, which I refer to as their Grand Unification Theory of Devices. Google’s stated purpose in pursuing the Grand Unification Theory is to create a new advertising universe where paid search campaigns are elegant and simplified, and where we can target all devices, bids, time and space from within a single campaign.
This theoretically perfect PPC universe is still young and unproven, but that has not stopped Google from creating it and implementing it before the end of the next fiscal quarter. Of course, they can do that; they’re Google. While Sir Isaac Newton and Dr. Albert Einstein had to content themselves with just describing the world around them, Google can change the way the PPC universe actually works.
Just as Einstein created his elegant equations to describe the grand workings of the cosmos, I thought it would be interesting to take a quick peek into some of the fundamental assumptions that Google must make in order for an Enhanced Campaigns universe to make sense, and express them as simple mathematical formulas.
This new universe operates differently than our current “Legacy” world, and I hope my math logic will help your understanding of what’s fundamentally changed. Making things simple isn’t always so simple, after all.

The Law Of Approximate Device Equivalence (LOAD)

To achieve simplicity and elegance in its new Enhanced campaigns, the first thing Google needed to do was get rid of all that pesky nonsense about campaign ROI performance being different on tablets than on desktop devices. Rubbish. How can anyone create simple campaigns if devices all perform differently?
Unless and until device performance could be proven to be equivalent, it would not be possible. This led to the necessity of inventing a new Law to describe device behavior in the new Enhanced Campaigns Universe, which I’ve named the big new Law of Approximate Device Equivalence, or I prefer to call it, the big LOAD.
Here is my equation that describes it:

According to the big LOAD equation, where rho (ρ), represents advertising performance, and ρ(t) represents performance of Tablets, and ρ(d) represents the performance of Desktop campaigns, Google has simplified the way things work by declaring that desktop and tablet advertising performance are equivalent, or at least close enough so that we need not concern ourselves with optimizing for them anymore.
Now, perhaps you are not a ‘math’ person, but you, as well as many advertisers, doubt that this can possibly be true. Perhaps you “just know” that tablets will perform differently than desktops. You see it for yourself in your everyday life. You see how tablets are replacing favorite magazines as something to browse through as you sit and watch the tele or enjoy a cocktail with your significant other. In the morning, whether traveling or at home, you see how tablets are starting to push newspapers off the breakfast table, and you ‘just know’ this can’t be true.
Or, maybe you are a data person, and claim to have “actual data” that confirms your suspicion about the veracity of Google’s big LOAD. Don’t fret, you are not alone. Even Google has data like this, and publishes it on its website like this:

Google’s own data shows significantly different usage profiles between Tablets and Desktops.

Hmmm, you ask. Shouldn’t Google use its own data to challenge a fundamental assumption of Enhanced Campaigns? Well, let me ask you something. When was the last time you tried to create an online ad system? What? Never? Then don’t question the wisdom of someone who has. And, besides, the big LOAD equation does not work in a Legacy Campaign world, so stop whining and start converting. And don’t laugh, either. After all, didn’t Isaac Newton have to create new math before he could prove his three Laws?
The second controversial, and even more mysterious, aspect of Google’s Grand Unification Theory of Devices is that individual keyword bids on mobile are no longer useful. Instead, mobile bids will now be calculated as a function of desktop keyword bids as explained in this equation:

The Law Of Bidding On Mobile & Desktop Devices (BMAD)

Translated, this equation states that your mobile keyword bid amounts will vary as a constant function of your desktop bids:

It no longer matters how your mobile keywords actually perform on mobile devices, what matters now is how your desktop keywords perform on desktop devices.
In olden days, advertisers only had one economic model to apply to AdWords bidding calculations. That model was based on the premise that your keyword bid should be a function of your conversion-rate-performance for that keyword. Now, with BMAD, we have two models. We can use that old model for our desktop device campaigns, and the new BMAD model for mobile keyword bids.
Now, I know you are saying to yourself, “how can it be simpler to employ two models rather than one?” As I said earlier, creating simplicity isn’t all that simple. Does that help? Good. Read on.
To make working under two economic models more simple than working with one, and to make the BMAD economics viable in the first place, Google simply invented the Mobile Bid Adjustment Factor, or BMAF, for short.
The BMAF is a constant, a percentage ranging from -100% to 300% that you can set yourself at the campaign level, which automatically creates your mobile keyword bid as a percentage of your desktop keyword bid. And, to make things even easier, any time you change any of your keyword bids, the BMAD BMAF instantly changes your mobile keyword bids, too. You’re welcome.
Still skeptical? Why, you ask, should mobile bids change every time we change a desktop bid? Why should mobile bids vary based on desktop bids in the first place? These are good questions. Let me get back to you on that.

Did Google Get It Right With Enhanced Campaigns?

Putting aside the shaky assumptions underpinning Google’s new Enhanced Campaigns that I satirized above, the question of the day is: will Enhanced Campaigns work and will advertisers be happy with it? Will Google be happy with it? Will Mobile CPCs rise and improve Google’s net profits?
There are certainly a lot of questions to be asked, and answers to be discovered, and the topic will certainly dominate the blogoshpere for months to come.
We’ve started modeling the expected impact of merging campaigns, and so far, we can find no significant gains or losses in the cutover, and so, we are starting the conversion process for our smaller customers.

Final Thoughts

A few final thoughts and questions about Enhanced Campaigns. Anyone who wants to weigh in, including Googlers, please leave your comments at the end of this article.
First, why didn’t Google first change the way it handles the time of day reporting and accounting for clicks?
I’d have thought this would have been the very first part of any AdWords reorganization. As it stands now, we still have to bid for clicks based on the time zone of the account, rather than the time zone where the click actually occurs. So, for example, If you want to reach people during their lunch hour, it would take 3-5 different campaigns for the US alone.
Some of the exciting new features in Enhanced Campaigns, like geographical bidding and site link scheduling would be much more useful if AdWords campaigns were based on click location.
Second, Google’s Product Managers have learned that handling PR surrounding new platform releases is probably as important as the release itself. I am sure that Google PR teams were embedded with the development teams, because the minute the story broke, there were industry pundits all lined up to say nice things about the changes.
Google strategically ‘leaked’ info to hundreds of major account reps, writers and bloggers so that within minutes of the announcement, the Internet was full of positive spin, which drowned out the negative voices. Well done, Google Product Development and PR teams. I sure hope there is as much steak in this new rollout as there is sizzle.
Well, that’s all that’s on my mind for Enhanced Campaigns this month. Want to give a big shout out to my brother, Bob, for his help with the physics and math stuff. Helps to have a physicist in the family! Please comment below with your own thoughts and ideas on Google’s latest efforts.

New ValueTrack parameters for enhanced campaigns: managing keyword level URLs by device

In a multi-screen world, it’s increasingly important for advertisers to show relevant ads based on a user’s context: location, time of day, and device. We launched enhanced campaigns to help advertisers take full advantage of user context, maximizing the effectiveness of their ad campaigns.

We’ve been listening to your feedback, and in the next few weeks we’ll be launching new ValueTrack features for advertisers using keyword level URLs.  These features will help advertisers achieve specific conversion and ROI goals, and make the upgrade to enhanced campaigns easier by:

1. Directing users to a device-specific landing page at the keyword level.
2. Enabling measurement of the effectiveness of campaigns by device.

What’s new

We’ve added a new parameter, {ifnotmobile:[value]}, where you can replace [value] with text that will then show up in your URL when the user clicks on your ad from a computer or tablet. We’re also changing the existing ValueTrack parameter {ifmobile:[value]}.  This parameter will now insert the specified value into the URL only if the user clicks from a mobile device.

In this post, we will discuss using the ifmobile and ifnotmobile parameters to direct users to a device-specific landing page.  We will also discuss performance tracking by device, and how the ifmobile and ifnotmobile parameters differ from the existing device parameter.

Example 1: Redirecting users to device-specific landing pages

Responsive web design is often a good fit for advertisers who provide device-optimized experiences to their users. If you must specify different landing pages depending on device, you have two options. If the landing page varies by creative, you can simply create mobile-optimized ads by setting the device preference to “Mobile.”  If the device-specific landing page varies for each keyword, then you can use the ifmobile and ifnotmobile parameters in the keyword-level destination URL.  It is important to remember that if you are using the ifmobile parameter today, it will no longer insert a value into the URL for tablet clicks.  The new parameter ifnotmobile will now insert a value into the URL for tablet and desktop/laptop.

Let’s say you want to send mobile users to "m.example.com/widgets," and desktop and tablet users to "www.example.com/widgets" for the keyword “widgets.”  In this scenario you could set the destination URL for this keyword to:

{ifmobile:m.example.com/widgets}{ifnotmobile:www.example.com/widgets}

Example 2: Tracking performance by device

If you want to track performance by device, the existing device parameter will work for most cases.  Using device inserts an “m”, “t”, or “c” into the destination URL, depending on whether the user clicked from a mobile device, tablet, or desktop/laptop computer. If your tracking system requires different internal ids for the same keyword on different devices, then you may need to use the ifmobile and ifnotmobile parameters.

For the keyword “widgets”, let’s say you have assigned an internal keyword id of “df32” for desktops and tablets and “df33” for mobile devices. You can set the keyword-level destination URL to:

www.example.com/widgets?kwid={ifnotmobile:df32}{ifmobile:df33}

Then, if the user clicks from a desktop or tablet, the landing page is:

  www.example.com/widgets?kwid=df32

and for a mobile click:

www.example.com/widgets?kwid=df33

Success in action

Advertisers are upgrading to enhanced campaigns and seeing strong results.  VivaStreet in France, the 4th largest free classified website in the world, upgraded all of their campaigns within the two weeks after launch.  When they upgraded, they increased their mobile bid adjustment to 125% and saw overall conversions increase by 34%.  After seeing the positive results, VivaStreet went on to increase their mobile bid adjustment to 140%.  By using ValueTrack parameters, you can also direct users to device-specific content and measure the effect it has on conversions.

Geographic Targeting In An Enhanced Campaign World

AdWords enhanced campaigns will force many advertisers to change their campaign structures. One of the benefits that have been touted for enhanced campaigns is that you will need fewer campaigns, thus making AdWords easier to manage.
For mobile targeting, this is true, as the ability to target mobile devices is now gone. However, for the targeting features that are left, such as location targeting, you might not want to consolidate your campaigns just for easier management.
In today’s column, we will examine how locations affect your campaign structure and if you should change your structure to match the new enhanced campaign benefits.

Location Bid Modifiers

Most accounts do not have the same conversion rates by geography. In some cases, the changes are small; but in other cases, the changes can be quite dramatic.

In this instance, the CPA of San Antonio is double that of Philadelphia. Therefore, we would not want to bid the same for each of these locations. Before enhanced campaigns, in order to bid separately by location, we would need to create a campaign for each location and set bids based upon the keyword CPA by region.
With enhanced campaigns, this will not always be necessary. One of the great new features is bid modifiers based upon locations. With bid modifiers, you can automatically adjust your bid for each location being targeted.
For instance, we can set our keyword bids as normal based upon some global CPA numbers, and then tell AdWords we would like to bid 32% higher for the Philadelphia region and 39% lower for the San Antonio region.

Before you can set a bid modifier for each location, you must add them to your campaign targeting section. If you don’t add each location to your campaign targeting, then you will not be able to set a bid modifier by location.

The good news is that this is very simple. You set bids as normal and then automatically adjust your bid by region.
The main limitation is that this is a campaign-only setting. If you have some keywords that do better in San Antonio than Philadelphia, but overall San Antonio is worse so you’d want to use a negative bid modifier, you cannot exclude keywords from the bid modifiers nor have bid modifiers at the keyword level. Of course, having that level of control would be incredibly difficult to manage by hand, so using campaign bid modifiers is a nice middle step.
The bad news is that these changes just affect the keyword bids for the entire campaign. They do not allow you to adjust the budget or ads for each region. In some cases, you still want to make different campaigns for some locations.
If you are a national company that has never tried to manage bids or budgets by locations, this is a great feature to get you started examining how various locations affect your CPAs so you can start to bid them separately or even target the users differently by location.
Please note, the geographic bid modifier only works with CPC bidding, either manual or enhanced. As with all bid modifiers, it is not compatible with CPA bidding or budget optimizer. The only exception is that you can bid –100% (setting your bid to $0) to not show if the auction uses that bid modifier.

Controlling Budgets

Several years ago, one of the main issues with splitting out your campaigns by region for bidding purposes was that you might have a single budget target, and you didn’t care which region received the click and spent your money, as long as the correct bid was used and you didn’t go over your total budget.
The shared budgets feature fixed this issue for advertisers and created the opportunity to easily use multiple campaigns without fretting over how to split the budget between campaigns.
Some companies have budgets by region. This is common in areas where there are co-op marketing budgets involved, multiple franchise locations, or physical store locations. If you want to maintain budgets by region, then you still want to maintain separate campaigns by region as you cannot split a budget between regions with enhanced campaigns.
If your regions are large, such as the northeast, southwest, and so forth, then you can use bid modifiers within those regions to tweak your CPCs; however, your overall structure of keeping your regions separate for budget reasons is still sound with enhanced campaigns.

Geographic-Specific Ads

One of the main reasons to separate locations into various campaigns is to ensure that the ads speak to that particular geography. The most common instance of this is adding the region to the ad’s headline. However, it is also done to match offline promotions or test responses to offers by region.
If you have split out your campaigns for the purpose of using different ads by region, you will not want to reconsolidate your campaigns as you will lose your ability to specify specific ads by geography. So, if your main reason to use multiple campaigns is for ad serving, you will want to leave your campaigns separated.

Ad Extensions

The last major reason campaigns were split up by region was for extension usage. You might have different sitelinks, offers, or location extensions you wanted to use by campaign. As none of the extensions have a geographic ad serving component (except for the location extension), if you want different offers or sitelinks by region, you still need separate campaigns.
With location extensions, you can decide to bid differently for someone who is within the reach of your location extension. If you first add your location extension as a location target, you can then set a bid adjustment for someone in that radius.

If you have physical locations where you want the customers to come to your business, this is a welcome change as someone who is within a mile of your restaurant is usually worth more than someone who is 30 miles from your location.

Wrap-Up

Enhanced campaign bid modifiers make it easier to manage location-based bids if all your keywords have similar CPAs by region. The ability to set a bid adjustment based upon the user’s proximity to your location is also a welcome change. If you want a simplistic AdWords account, and yet have the ability to set different bids by region, the new enhanced campaign features are a very welcome change.
If you are an advanced advertiser who wants to change budgets, ads, extensions, or individual keyword bids by region, when you upgrade to enhanced campaigns, you will not want to consolidate campaigns just for location targeting purposes. You will still need to consolidate campaigns based upon device types, but you won’t do it for location purposes.
If you have segmented your campaigns by location, you can still take advantage of bid modifiers within the campaigns as locations often have sub-locations (states have metros, metros have cities, etc.) that will commonly have different CPAs by each region which you can micro-manage with bid adjustments. If you are using location extensions, then please take advantage of bid modifiers by location extension reach.
The launch of enhanced campaigns is one of the biggest changes Google has ever implemented, and it will change how AdWords accounts are created, structured and managed. While enhanced campaigns gave additional features to location based bidding, this new campaign type should not force you to reorganize most account structures based solely upon location targeting considerations.