Google Paid Advertising in 2024 w/ Luanne Marek | builders podcast

0:00If you're not there, someone else will absolutely be there. and as big as your brand is, it doesn't matter. If your competitors are there, you're absolutely going to lose market share to some of those competitors and customers to them.

0:17This is our second episode in a row about Google. Last episode was on growing your audience through the free results. This week, we talk about paid advertising on Google and my guest is Luann Merrick. She's an expert on digital paid media. She spent more than a billion dollars on Google. And in our weekly segment with Marty from Business.com, we discuss the sleep habits of famous people, McDonald's ad campaigns and Spotify tattoos.

0:50Hey, Marty, good to see you. Hey, John, great to be back. But like every week, we talk about what you're covering in the B newsletter, free on business.com. And one of those things is sleep. I know you've talked in the past about how sleep equates to business productivity. But how do various CEOs sleep? I know you looked at that. Sure. We've got our new feature, Sleep Like a CEO, where we rounded up quotes from a bunch of business leaders about their specific sleep habits. And you would think all CEOs must work 80 hours a week and be constantly grinding. But actually, a lot of them really seem to believe that a full night's sleep is necessary for them to run their companies effectively.

1:33Oprah goes to bed at 10 p.m. on the dot every night after keeping a gratitude journal. She writes in. She says she's never set an alarm. I have never set an alarm. I don't believe in them. They are alarming, Oprah says. Well, how about some other CEOs? I know you covered Jeff Bezos, Arianna Huffington, some others. Bezos sleeps for eight hours and budgets time for coffee and a bit of a morning routine. Arianna Huffington wrote an entire book on getting better sleep. She's like a sleep. She's like hardcore into sleeping. She sets her thermostat between 60 and 67 degrees. She takes all her digital devices out of the bedroom, only only lets herself read a paperback or hardcover in bed.

2:18the CEO of Starbucks meditates for 10 minutes before bed. I was saying if I, if I was in Starbucks corporate and got as much free coffee as I wanted, I would probably just never sleep. I think I would be permanently awake. But on the, on the other side of the spectrum, Martha Stewart is an insomniac. She says sleeping is like, she just can't do it. She has two iPads in her bedroom because she just spends the entire night going through news and, and doom scrolling. Yeah, it is interesting how many different sleep habits they are. I know that for me, though, when I sleep better, I work better. Marty, you?

2:57Yeah, definitely. I think the times in my life when I've been doing that round-the-clock kind of thing, you know, you can do that for so long, but you burn out pretty quickly. It's not super sustainable if you're not getting some Zs in. So there's a new trend shifting topics here on TikTok where if I let's say my favorite song, it may or may not be Welcome to the Jungle by Guns N' Roses. What's the new TikTok way that I can get people to listen to it whenever they want? Sure. Well, TikTok came out with this sort of QR code system. It looks like a sound wave. And each individual song has its own code, its own wave.

3:38And people realized, well, I could tattoo this on myself and I could scan my tattoo with my phone and play the song. and there's been some people who've done this it actually looks kind of cool the only problem is that the tattoo artist has to get it like exactly right or else they'll either play the wrong song or no song at all uh i don't know which is worse probably the wrong song is worse um well it could be like you could you get raffy or something i don't know that's where my head's at and you said tiktok codes but i think you meant spotify codes are you right right about that Right, right.

4:15Spotify codes. Yeah, yeah. Okay. And then the last topic is I was driving my car last week and I heard this ad on the radio for McDonald's. And I frankly had no idea what it was. I wasn't even sure it was related to McDonald's. um but it turns out it is what what was mcdonald's doing and why did they go big with something that's kind of obscure at least as far as i can tell going back to the 80s in anime there was sort of a fake mcdonald's that they would put in called wick donald's with an upside down golden arches that would be kind of a way that could represent fast food chains without getting in copyright trouble it was sort of like a parody of mcdonald's and it became it wasn't just like one movie or one cartoon it became industry standard sort of an inside joke in uh in the entire anime industry it has appeared in hundreds of these animated movies and and manga comics um so mcdonald's decided they were going to actually make it real because they're the only company that could legally do that um so they turned themselves into mcdonald's as a marketing stunt where they actually created their own manga comics um they flipped the arches in major cities and came out with some original sauces for anime fans.

5:35And it was super popular in that fandom because they were making this kind of joke thing that had been around for decades into a real restaurant. Well, you know, my favorite fake McDonald's comes from the movie Coming to America. You remember that one? I think it was McDowell's. McDowell's? I think so. I might have it wrong. But check it out, folks. Coming to America, I think an 80s movie? 80s or 90s? And then the latest on Netflix, which was also really funny. They did just do a pop-up nearby here in LA that was the coffee shop from Curb Your Enthusiasm. They made Latte Larry's into a real thing.

6:14Oh, really? Larry David wasn't there. Yeah, Larry David wasn't actually serving the coffee, but you had to wait in line. And there was hand sanitizer on every table. And you weren't allowed to use the bathroom because that was a thing from the... Anyway. That was a great episode. Marty, as always, great to see you. Thanks so much, John.

6:40I'm speaking with Luann Merrick today. She's an expert on digital paid media, spent more than$1 billion in digital paid media on Google and other platforms, and talks about media strategy with some of the biggest brands in the US. We're going to talk about paid advertising on Google today, what you should know and where it's headed. Hi, Luann. How are you? Good to see you. Hi, how are you? Good. Good. So paid advertising on Google, it's been important for two decades. It'll be important for the foreseeable future. But in like, as simple terms as possible, in today's landscape, why do you think it's important?

7:20And how should brands be thinking about it? So I think as a small brand, it's kind of obvious you want to get your brand out there, right? People don't know who you are. But when you talk about the bigger brands, I know there's been controversy over should you be in paid advertising and how much should you be in paid advertising, paid search in particular, with a large brand. And there's two main reasons why you would want to be. One is that if you're not there, someone else will absolutely be there. And as big as your brand is, it doesn't matter. If your competitors are there, you're absolutely going to lose market share to some of those competitors, lose customers to them.

8:03And I think the other reason that some don't think about as much is that there's an idea that if If you're not in paid, your organic presence is going to pick it up. But usually your organic experience and your paid experience are going to have different priorities and often competing priorities. People, you know, your organic experience usually is more informational, whereas a paid experience should be very conversion heavy. So if you're expecting all that traffic just to go into organic, you're likely going to lose conversions because you don't have a very conversion heavy funnel. Yeah, I think about that, that last part.

8:42It would be like sometimes going into an organic experience that's not that's not for conversion might be like walking into a store that has that that's that's unorganized. that doesn't point you to where to where you want to want to want to go. You know, you're walking to a convenience store, you want to get a six pack of beer that it's not obvious where the beer is. So you leave that that that sort of thing. I totally buy that. And also, you know, if you're a large established brand, and you have you have a bunch of competitors, I think they probably like it when you're not in paid advertising, because they can go there and they can sort of say whatever they want.

9:19You can't defend yourself. So we've established that. But I want to talk today about some of the bigger and hotter topics going on in Google paid search today. One of those is the role of AI. AI, obviously, the biggest buzzword of the last 12 to 24 months. I think Google would say that how they decide how to serve ads has been AI-driven since the beginning of time. But I think when we're talking about AI today, I think we're talking about tools to make like campaign creation and stuff on your side a little bit easier. Am I right about that? And how is AI changing the way that companies like us or other companies approach Google Ads?

10:04Yes, for sure. And of course, I think AI is being talked about in every industry right now. But when we talk about it from a marketing perspective, there's so many new tools out there that are letting advertisers just process more data, create better ad content, and overall just save time on setup and optimization. So I think what it's done is really allowed advertisers to shift more into strategic thinking versus like the actual hands-on, what do I need to do to get things set up and running? So let's just talk about some of those things. So if if someone's so someone doesn't have to think necessarily about what copy to create or or how to create a picture or video, is that what you mean?

10:51So I think it's it's they it's more about the strategy of what do you want that copy to to how do you want that to resonate with people and what do you want it to show? And you don't spend time creating it more. You put the ideas out there and AI helps you create those and then you just refine them. You can act as an editor. You have essentially an assistant to do the busy work, if you will. And then also, although Google has used AI to serve its ads and that was the foundation which it's built, There are also specific AI-based features in Google Ads that change certain parts of it, like how you bid or where the ads might be displayed outside of traditional Google search.

11:43Am I right about that? Yeah. So there's been a couple of changes along the way that AI has really become a big part of. One would be, like you said, with bidding. So smart bidding is probably, from what I've seen, been the biggest game changer for any of the accounts that we've run. So before you define that, what's like regular bidding or dumb bidding? Oh, so regular, so that'd be called manual bidding. And at the very basic level, you put a keyword in and you say how much you're willing to pay for someone to click on that keyword. Okay. All right. In smart bidding, the difference is you still tell it the keywords.

12:22But instead of saying how much you're willing to bid, you tell them how much you would pay for a customer or how much return on ad spend you want. So the first biggest important piece of this is getting good conversion data into the tool. As long as you're putting good quality data in there, we've seen that the smart bidding that Google offers is has by far been better than anything that any other third parties out there offer. I think that, you know, there's a lot of third parties that offer some sort of smart bidding. But because Google uses auction time bidding, meaning they're using signals in real time that are coming from users who are searching, they're able to, I think, hit your goals a lot better than any of the other third parties have been able to.

13:10Okay. So that's bidding. One follow-up question on that. How big or robust does a campaign need to be before you'd recommend smart bidding? Let's say I'm trying to sign up someone for a webinar that's a fixed place in time, or I have a limited time campaign or deal or something like that. How much time does Google need in order for it to figure out how to smart bid? uh there's it it depends on the the volume obviously but there's there's a couple of ways you can crawl into that uh one is you can start with manual bidding and there's absolutely nothing wrong with starting with manual bidding you get a good idea of what what is out there um the other is they do have other versions like max conversions where uh it's it's just trying to look for as many conversions as possible it's kind of a good way to start off any smart bidding and then you can move into like a tcpi or a t-roas after that tcpa and t-roas meaning uh target cost per acquisition or target return on ad spend okay all right roger that so so that's on the on the bidding side and then also um google's ads are not confined to you know just just google search it's youtube It's third party sites.

14:27It's all over the place. And Google has had products to advertise on those over the last several years and beyond. But what's changed in that in that arena and how has Google evolved that product? So anyone who advertises in Google, I'm sure, has heard the word performance max multiple times, especially from your Google reps. And it is basically their most AI leveraged way to serve ads. And what it does is it allows you to serve ads on multiple platforms and find, so meaning video, voice, Gmail, basically any channel that they have available, you, PMAX, could serve in those areas. A lot of those sources, like those other sources besides search, have had traditionally lower conversion rates.

15:24So a lot of media buyers have stayed away from those because they weren't able to make them profitable. But Performance Max, or Pmax, as many people call it, allows you to, it's allowed us to find some incrementality within those new channels. I will not say that it's by any means replaced paid search yet. I think that we are finding some good incremental sales that are profitable through there. I think it still has a little bit of ways to go before it's something that would replace search altogether. But it's been interesting to be able to bid into those new categories. Do you need to think about different types of creative for like a performance max campaign?

16:04Because I'm thinking, you know, if I'm certain types of searches on paid search, I might be like, it's very clear in the search, like I'm going to buy something. But then when, you know, when I'm watching a video on YouTube or I'm elsewhere on the internet, I may be in consideration for that product, but I'm not in that same frame of mind. And you need to like, you need to like tease something a little higher up maybe to, to get me to remember to make that search later. Is, is that, am I thinking about this right, wrong? You are. I think that, so I think that you would, you would generally have, I think, different campaigns for when you're, you're looking for someone who like Pmax is really supposed those to be for if you're looking for conversions.

16:44There are other campaigns, it's more people who are upper funnel or mid funnel. But the nice thing about PMAX is it really does focus on the conversion side of it. Okay, so you can plug in your same smart bidding stuff on the PMAX campaigns? Yeah. Yeah. Okay. Okay. And then how do you think about creative for performance max? Because you know, like your traditional Google search ad, it's like 50 words or whatever it is, it's a title and then some other text and then a link. Is it the same deal in PMAX or is it broader than that? Oh, it's much broader in PMAX. Yeah, you have to put video assets and image assets.

17:27So again, I think that's where AI can help a lot is help creating what those assets look like versus needing a full creative team to go out and do that for you. Okay, yeah. And so obviously we've talked about this already, but um but ai can make you more efficient it's not perfect i mean we've seen the terminator movies that stuff can go bad like have you like what are the cons of um of automation or some of the challenges obstacles you need you need to get past or certain early learnings that you've had um so the biggest negative i'd say about anything smart bidding um and automation in general is when things are going right, they're actually, they're going really good.

18:11But when things go wrong, they go very wrong very quickly. And they're much harder to correct from my experience than kind of back in the day when you had everything manual, because you had more controls back then. Now it's a little bit harder to identify exactly what went wrong. And then on top of it, get machine learning to understand what it's doing wrong. It takes longer for it to fix itself. Mm hmm. So in a world, in a world, though, where like we're like you've locked in and you've and you've said, I want this return on ad spend. How can it get wrong? You know what I mean? Like what can break that?

18:54So one is just there are bugs and bugs happen and they they really impact pretty greatly when they do happen. The other is just there's a lot of things that could happen, like a competitor jumps in and everything is thrown off. conversion data may not upload correctly and everything is thrown off. Like any little thing that the bidder is taking into account when it's deciding what it's going to do, if something is thrown off by something new coming in, it takes longer to understand what's happening versus if you were in running manual campaigns, you would say, hey, I know there's a competitor in here.

19:33I'm not willing to spend an extra$30 ,000. So I'm going to pull back a little bit. As I'm sussing all this out, I'm feeling like two big themes, at least for me, come to mind. One is you have a strategy. What are you trying to accomplish? And you're providing inputs to tools that create campaigns to execute on that creative strategy or that media strategy. And then you also need really good, clean data. And you need to make sure that that good, clean data is going into the right place. Have I got it? Very much. Yes. More than ever, the data is important. You used to be able to probably look at what campaign performance is outside of the UI up until just a year or so ago, I'd say.

20:25We could do a lot of it outside of the UI. But now with everything going in AI and you don't have as much controls, if you don't have really good conversion data or really good attribution data going into the UI, things can mess up easily. And you just aren't informing it to do the right thing. So I think, you know, one of the things that that ad companies have had to do or clients have had to do is make sure that they have a really good CDP. So either spend time and resources internally, building their tech stack, making sure they have that good CDP or hire a third party to do it. Yeah, got that.

21:06Third party, that triggers something I want to talk about. So, you know, maybe the other big, big change outside of AI is something related to privacy and data. I'm going to try to try to explain this. Like when you go to a website and a thing pops up and says there are cookies, there are two types of cookies that can track your activity on a website. One is first party, meaning if I'm on REI, REI.com, there's REI is tracking my activity on REI. That's a first party cookie situation. And in a third party cookie situation is some is REI has placed some type of code that allows some other website to track my activity.

21:57And that's a third party cookie. And those third party cookies are really good for for advertisers, because it gives you information on what consumers doing, you can serve them ads elsewhere. But it's obviously a concern for consumers. When you're on a website, you could have dozens or hundreds of other websites tracking your activity. Anyway, a lot of that's changing because the different browsers where you're surfing the Internet are no longer allowing third party cookies or they're being phased out. So with all that being said, from an advertiser point of view, having less access to third-party cookie data maybe limits your effectiveness for future advertising.

22:46How has this shift impacted Google ad strategies or has it yet? So I think it's starting to. And I think that all companies are thinking about this and how are they going to work towards it. And definitely the answer is you have to figure out how to gather more of that first-party data. Use that zero-party or first-party data to inform your platform and make sure that you're gathering that information in that CDP. the the tool that we use dugout we've we built this long ago and we built it knowing that it with their third-party cookies we're going to go away at some point so thankfully we have like a really good foundation that our engineers have been working towards for quite a while but I think that there's a lot of others that aren't there yet and they're trying to figure out what does this new world look like you know I'm I'm also curious about the kind of the block and tackle aspect of creating a google campaign i haven't created a campaign myself in google in in a long time but but it was um it was you know i i would go and you type in keywords that you wanted to bid and you'd see how much traffic there was you put in a price blah blah but as as you're talking about um products like performance max asking google to sort of figure out where the users are.

24:10Is thinking about that, traditional keyword research, is that still important in a media buyer's toolkit? It is, but I think it's changed a little bit. So it's very important because while Google and AI in general has been able to take away a lot of that manual work, it's not always right. So if you're not going in and checking that what it's telling you to do is accurate, it can throw things off pretty quickly. So it's great in that initial ideation setup and creating your ideal structure, but you absolutely have to go in and double check everything. One of the biggest areas of keyword research that is important is looking at search terms.

25:03So you should be looking at search terms on at least a weekly basis. As broad matches become a bigger deal, they are very broadly matching you to things. And while that may be right sometimes, it's you know your business more than anyone. So there are probably a lot of terms in there that you shouldn't be matching to. So negative matching is really important. And then also just using that data to go in and update keyword structure to make sure that your searches are relevant to what someone is looking for. So I think what I'm hearing is, whereas before you might be opting into certain keywords, now Google's allowing you to reach more users, but you need to be more vigilant about opting out of certain keywords that don't that don't meet.

25:50Okay, I got it. And then we just had had an eclipse this this week. I don't know if you went outside and watched her. Apparently everyone did because volume went down across all of our campaigns for about two hours. Yeah, yeah, yeah, right, right. And but but I mean, I don't know if any of the any of the businesses that that you work on, like the eclipse matters, you know, you know, matters for that choosing that product. But I was thinking about like search query trends. How do you anticipate those? Whether they're short-lived like that or just changes in how consumers search for stuff? Yeah.

26:27So one thing is like always looking at Google Trends to see what's going on, make sure that you're up to date on those. The other is, again, back to that, looking at search terms. One great thing about AI is you used to have to comb through thousands of search terms and determine whether or not they were good quality. But there's tools out there that you could get to do this for you. But honestly, what I prefer to do is use AI to comb through that and put my own prompts in there and make sure that I'm getting out of it what I want. Because you You can keep refining what those prompts are, get the information that says, you know, these are the right search terms, these are not, and use that to find either trends, things you want to negate.

27:13But I tend to be a little less reliant on Google's feedback on these because you really can't give them very specific feedback on what are you looking for in trends. Whereas if you use your own prompts in AI, you can take that data and find exactly what you're looking for. You know, also with AI, there's a question I wanted to ask before. I'll jump at it now. When you're like creating ad copy, so you have a strategy, you're using AI tools to like help come up with ideas, but what are the best practices for creating like effective ad copy or auditing it or, you know, kind of like figuring out what's working as you're going?

28:01So the thing that hasn't changed is have clear, concise ad copy, have a really good call to action. I think that's been the case for a long time. That has not changed. What's more important is really keeping your campaign and ad group structure very clean. And I know that sounds strange with ad copy, but we do audits for clients, new clients all the time. And honestly, the structure of their campaigns is the thing that's usually most negatively impacting them. Because if you don't have your structure right, you can't serve the right copy to those users. So, you know, some we see are very broad with their structure and others are just way too segmented.

28:43So if you can't find that right balance, it's very difficult to optimize your copy effectively. So when you say a broad structure, do you mean kind of like, go back to the REI example, you're having like one set of ad copy applied to everybody who might search for a product you sell? That's correct. And then something that's too segmented is like having ad copy for every single SKU or every single product at REI? It's not necessarily that. It's more segmented. And, you know, we've seen companies try and segment every geo out. So every state or every city. And once you start getting into that level of segmentation, you just lose the ability to even understand what's going on.

29:31Oh, I see. Yeah, there's too many small pieces of data. Is that kind of what you mean? Okay. Okay. Well, kind of the last thing I want to talk about is probably the biggest trend, the biggest change going on in search and search behavior. And that's Google's new search generative experience, previously barred, I think now Gemini. I use it all the time. It's coming fast. It's being integrated in search. What do you think about that and pontificate for me? So SGE, I like it. I think it's awesome. I enjoy using it all the time. But I think it will. Again, these are just my thoughts on where it's going.