Google’s Performance Max was met with a mixed reception when it was forced upon marketers in Q2/Q3 last year.
The new type of automated campaign takes away much of the control that Google advertisers had within their existing Smart Shopping campaigns, leaving few levers to pull in order to impact paid search performance.
All the while, paid search shows no signs of slowing down, and Google Ads continues to be the go-to choice for search advertisers. Google’s ad revenue increased from $61.85 billion in 2021 to $70.15 billion last year [source], with a new high expected in 2023..
Now that Performance Max (PMax) campaigns have been around for well over a year, are marketers ready to embrace them?
Since the introduction of Enhanced CPC in 2010, the future of Google Ads has seemingly always been automation.
In their ideal world, you give Google a credit card and a URL, and it does the rest.
Over time, its data-driven products have gotten better and better and despite lots of moans and groans from marketers, most have accepted that automation is here to stay.
PMax campaigns are the latest in a long line of these automations, if a little more drastic than others. Even keyword matching, once fairly comprehensible to even a beginner PPC, is now so obtuse that Google released an 23-page guide recently to help marketers understand when an ad would actually show for a given keyword [source]. Google even recently referenced the term ‘keywordless’ for the first time [source], suggesting it’s continuing to make further inroads into looser audience-based targeting on search, much like its main rival Meta.
While marketers main complaints on PMax have been around a general reduction in control — lack of negative keywords being one prevalent example — Google has since added back some power.
Well aware that reception to Performance Max campaigns has been mixed to say the least, Google released several new updates this month to placate advertisers.
For more, see Google’s Ads updates page: https://support.google.com/google-ads/announcements/9048695?hl=en
Google may well be listening to advertiser concerns around PMax. While some brands are seeing strong performance following the transition, many have seen performance dips compared to equivalent Smart Shopping campaigns.
It seems like over the busy Q4 period, marketers ‘got on’ with having to use Performance Max, but the data below suggests the honeymoon period may be over.
I wasn’t gonna publish this yet bc the Feb data isn’t complete, but I’m incredibly weak-willed
I’m seeing PMax adoption dropping for 3 consec months
1. That’s a rolling quarter. Feels significant.
2. Not a good start to ’23
3. Adoption has never slipped for >1 consec month pic.twitter.com/WmcV2CYQDV
— Mike Ryan (@mikeryanretail) February 23, 2023
Increasingly, we see brands rely on Standard Shopping campaigns to more effectively manage bids, budgets and overall campaign control. Despite this, Google claims that using PMax can yield an 18% uplift for the same cost. [source]
If manual campaigns are known and shown to perform better than equivalent PMax campaigns, Google may need to pass back yet more control to advertisers. At present, much marketing discourse is around Bard and generative AI, but the buzz around these technologies should indicate that we should expect to see further automation in the way of automated ad copy, descriptions, and creative.
For instance, ‘AI-Powered Search Ads’ are coming soon and further signal that ‘saving time with AI’ might be the official line for ‘erosion of advertiser control’ [source].
Performance Max isn’t going away, and if anything, tells us a lot about Google’s future of paid search. Automation is here to stay, and savvy marketers and brand should embrace automation, while applying the fundamentals of a solid paid marketing strategy.
If you’re still unsure about the performance you’re getting from your Performance Max campaigns, connect with our team of paid search experts