There is a lot of talk about artificial intelligence in digital marketing and its impact on us as an agency, specifically in PPC advertising. For over twenty years, I have seen a lot of changes in the search engines. We’ve gone from managing the minutia to strategizing with AI.
Some of the changes in the PPC world and where it lands us as a PPC agency:
The Search Engine Competitors
In the early years, the change was about the players. As the different search engines competed for PPC marketing dollars, the number of paid search engine options faded over time. Yahoo! and Ask had dedicated sales teams, then eventually stopped selling and simply incorporated competing search engines into their search tools. Google and Microsoft are the last two (viable) PPC search engines.
Through all this time, Google set the standards that the others tried to emulate. From consumer-facing features to ad management UI, most tried to copy Google. We are at a point where Microsoft simply says to import your Google Ads or Google Merchant data directly.
As an agency, it is easier to deal with a few players, but it seems restrictive in the search space.
Google Ads: From complete control to black-box
Focusing on Google which set the stage for all search engines, Google tried to provide the PPC managers as much information and control as possible. The search management landscape is unrecognizable in today’s environment. Take these examples:
Long-Tail Search Term
When Google reps visited our agency, one of the first strategies they encouraged was an exceptionally well-built-out keyword list with well-structured ad groups. Having five- or more-word search term targets was very common. Creating ad groups focused on very finite terms created a competitive advantage.
You could find terms on which very few competitors were bidding, thus creating very low-cost CPC programs. While everyone was bidding on head terms, only those who did a great deal of work built out long-tail programs.
Google effectively killed long-tail PPC programs by implementing “low volume” barriers to creating a search auction. Now, Google has forced us to compete with head terms (or very close), inflating the cost for any advertiser who managed long-tail terms.
SKAG – Single Keyword Ad Group
One strategy implemented by many PPC agencies and managers is the SKAG. It was very targeted, with very tight ad copy and landing pages. Running the SKAG was a lot of work, as was managing the ad groups and the negative match type to funnel the correct ad to the best search.
Google effectively killed this strategy by no longer honoring match types. When your ad group ad can show for searches that Google deems “mean the same” and seems to grow the list of “qualifying searches” as you increase your negative keyword list, the SKAG loses its validity.
CPC Max Bid – still available, lease valuable
From Enhanced bidding to CPA to ROAS, CPC Max Bid has all but lost its meaning. You can absolutely do this. But, with the advent of AI, manual bidding is highly inefficient and perhaps even detrimental to a PPC ad program’s success.
With the advent of PMax campaigns and CPA/ROAS targeting, the CPC quickly becomes irrelevant. This is where AI is making itself felt.
What Does AI Mean for a PPC Agency?
For any agency or in-house PPC manager, the direction of Google Ads will greatly reduce the time spent on tactical implementation and increase the focus on strategy.
This is a difficult switch for larger agencies or any PPC agency that built a team dedicated to managing the tactical implementation of paid search, which almost all have. I have seen recent PPC agency recommendations that make it clear that the agency is still clinging to the old tactics (old being just a couple of years). To shift from tactics to strategy, agencies have to reduce staff at the lower to mid levels and hire/promote staff at upper-mid levels to work with clients.
It makes managing the client relationship more challenging on two fronts.
One is that helping clients transition from the tactically focused account structure to a more strategic/AI-centric approach is difficult. Clients are used to seeing very detailed campaign builds and reporting. As one agency put it, manually managing the program gives you more control… but not better results. Clients feel better with the control. As an agency, we have to help them look past the lack of direct control and see the results.
Two, fee structures are based on the old paradigm. With hours baked into tactical actions that are no longer needed, agencies must reevaluate their fees with current and new clients. These hours and the agency’s profit based on them are going away. It can be challenging to take steps to reduce the agency billings. It’s a bit frightening to give up the revenue, and let’s face it, a bit of an ego hit. But our industry is changing, and we need to adapt and be fair.
The pace of change in the pay-per-click industry is accelerating. Agencies should be leading their clients down this path with a result-centric, strategic approach. Waiting until you have no choice when Google and other channels force the use of their AI, will leave the agency and the clients behind.