Ep 544: How to Break Through Scaling Ceilings in Google Ads & Unlock Incremental Growth

0:00Dougie:People see a decent return on ad spend or they see decent scale out of a particular cluster of keywords and they think, OK, boom, all that's got to happen is I either increase budgets or I drop my targets to sacrifice a bit of efficiency for scale. And the one thing that's different about Google and also Amazon is that. What are some of the errors or the biggest error you see brands make when they're looking to scale on Google ads? What I see most specifically is you don't want to be in Black Friday, Severe Monday, making drastic changes to your ad account. You can't just assume that because people land on your PDP that they know your entire brand story.

0:40Dougie:But you also don't want to necessarily give them all that at the top of your PDP.

0:51It's all killer, no filler. I'm Eric. The hockey season is almost here, so we had to have Dougie on to talk fantasy hockey. Just kidding. We're talking Google Ads. Dougie leads our Google team. How are you doing, Dougie? I'm doing well. I'm excited to talk hockey. Yeah, let's go. So let's talk our drafts. We're Canadian. We've got a lot of American listeners. We'll save the hockey till the end. We'll have a few points on hockey. But for the core topic today is something I think a lot of people listening to this podcast have kind of run into. And that's just the concept of scaling on Google ads.

1:23And what happens when you run into a hard ceiling with your scale? Maybe you can set up the conversation a little, Dougie.

1:30Dougie:Yeah. So I've seen, especially recently through a few of our audits, that people see, okay, a decent return on ad spend, or they see decent scale out of a particular cluster of keywords. And they think, okay, boom, all that's got to happen is I either increase budgets, or I drop my targets to sacrifice a bit of efficiency for scale. And the one thing that's different about Google and also Amazon is that on search and shopping, you're limited by a population size. So if you're targeting broad audiences on YouTube or on Facebook, you're not really going to saturate the US market for people interested in home goods, right?

2:14Dougie:But you will potentially saturate the market for people looking for a very specific item or even broader terms in the market as well can be saturated. Once you start to hit an impression share ceiling, you're not really going to get a ton of benefit out of increasing budget, right? You're already maximizing the people you're hitting. There's not additional population to scale into. You have to start to look at other avenues. And what are you looking for? What are your signs that you're hitting an impression share wall? Yeah, so first place you can go easy enough in Google Ads is the keyword planner.

2:50Dougie:And you can see, go through your terms and see, okay, what level of impression share am I hitting on terms that I care about? And impression share isn't the one be all end all metric. You might have strong impression share, but your ranking might be poor, right? In which case, okay, there's a discussion about increasing your bids or your budget to increase rank within in that those impressions you're gaining. But generally, if you're starting to reach 100 % impression share, that's the conversation you should be having. You shouldn't be thinking, okay, I'm just going to gain a bunch of additional eyeballs on this stuff.

3:24Dougie:It's no, okay, we're going to be more considered and strategic about the eyeballs we're already reaching. So what paths do you suggest advertisers take when they've reached this ceiling? So if you've reached 100 % impression share on, and I've talked before about how we start with the most relevant terms first and we expand out. If your relevant terms are being maximized on, then you go to the next spot, which is looking at ad ranks. So how often are you showing up as the absolute top listing in that particular search or the first product in line on your shopping ads as well? Depending on the answer there, you might have to look into expanding into broader keyword strategies.

4:06Dougie:And if there are no broader keywords to be had, then you have to go and actually create demand for the search terms that you're targeting currently. And that isn't really done on search and shopping. It's done either through YouTube, socials, organic, some other creative-based platform. Do you have any examples? I just put you on the spot here, but do you have any examples of a brand who's done that, who sort of unlocked upper funnel demand with content on YouTube or platforms like that? Yeah. So one example that comes to mind is Marin Skincare. And so a lot of their creative work was centered around what's almost become a branded term in lobster lotion because their packaging is orange.

4:44Dougie:And so over time, they were starting to not maximize the broader intent for skincare products and eczema repair products and what have you, but they were maximizing some of the more specific terms in the niche. And they didn't have the brand awareness to play in those broader terms. So through their creative efforts, they were actually able to start to generate additional intent for a term like lobster lotion, which wasn't necessarily specific to them. But in reality, it really was. It also makes me think of I think for Sigmatic, who was doing this where they were really focusing on creating content around the constituent parts of their different coffees in a way.

5:24So you'd be looking up something about cordyceps mushrooms or what and then you'd kind of find yourself in a funnel. So you can kind of go to your one way would be to go to your key ingredients, make content about that and bring people in that way.

5:35Dougie:Yeah, 100%. And content is key in terms of demand generation, either through education or entertainment, right? That work will filter down into your middle of funnel, low of funnel, demand capture efforts on search and shopping. And it's just making sure that we're playing both games and then also analyzing where there's room to push in Google Ads. And typically, that's why we're talking about impression share, because you can't push into additional population if there's no additional population to push into. You have to either expand and target other keyword clusters, or you have to create more demand for the terms you're targeting existing.

6:10What are some of the errors or the biggest error you see brands make when they're looking to scale on Google ads?

6:16Dougie:I think what I see most specifically is they just drop targets. A lot of brands these days are working off of value-based bidding, which is not necessarily a bad thing if we're doing it strategically. And they'll say, okay, I'm willing to sacrifice X amount of efficiency See, Google reps will even at times recommend this without looking at the impression share numbers. And if you just give Google the signal of, hey, rather than a two ROAS, I'm happy with a one ROAS, but there's no additional search volume to capture, then all you're doing is artificially inflating bids. It can have an effect on certainly your ad rank and how frequently you're showing in those top positions.

6:53Dougie:But if you're not doing it with the specific intent of increasing your ranking, then you're probably doing it wrong. And then how, when you're in a scaling period on Google, how are you ensuring that the buzzword of the era incrementality is being achieved? How can you be sure on Google that you're achieving actual incremental scale? Yeah, so we've talked about it. I think it was on our last Connect. What we focus on primarily is new customer acquisition. There's certainly a place for paid and customer retention, but less so than a platform like email or organic efforts. So on Google, for example, like we talked about on the last pod, we are at times optimizing towards an actual new customer conversion goal as opposed to just general conversions where we're seeing that 50 to 66 % of brands end up getting returning customers through that level of targeting.

7:47Dougie:So it's a focus on non-brand terms, most specifically. Brand terms too, depending on the scenario. There's nuance with competitor situations and certain terms can be branded and also generic if you have a generic type brand name. But for the most part, it's focusing on new customer acquisition as a goal and also looking at non-brand. The second topic that you brought today was something around product distribution misalignment. Can you please, in layman's terms, explain to me what you mean? Yeah, I think a lot of brands maybe have done the strategic work of thinking, okay, two thirds of my new customer purchases come through X product.

8:28But then when they come to deploying work on Google, they don't specifically try and push that product.

8:35Dougie:There's either just one single catch-all campaign, maybe some level of segmentation by product category, but it's not based in performance or strategy. It's just, okay, these are all socks and they're all going to go together. And these are all shoes and they're all going to go together, which isn't necessarily incorrect thinking. But if we think about maybe what our hero product is as a fashion brand, maybe they're coming through on a very specific T-shirt. That's where the vast majority of new customers are entering the brand through. And we definitely want to make sure that we aren't showing up with shoes and socks for these net new customers, or at least not as significantly as we're showing up through this bestseller.

9:17Dougie:So it's just strategically structuring the performance max and shopping mix to make sure that we're pushing the products that are strategically important to the brand, which I think a lot of the times Google accounts are kind of led by the leash of automation. And at times that ends up with misalignment in what's being shown to net new converters. Yeah, with Google, it's just sort of like, let's get all my products on there, like sort of democratically in a way where everyone is represented, but you're suggesting take a look at it much more strategically. The same things that you'd apply to meta as well, right?

9:52When you've got a hero product working on meta, that's what everyone's seeing. Does that follow through to the landing page as well? Do you try to have sort of funnel congruence when you're promoting hero SKUs like that?

10:01Dougie:Yeah, I mean, in shopping listings, they always have to go to a PDP. But we're definitely having conversations with clients where we're trying to make sure that PDPs are new customer friendly, right? They're not especially convoluted. They're simple, they're polished, they're to the point, but they're also speaking to the most common pain points or problem areas that new customers new to the brand would be encountering. So you can't just assume that because people land on your PDP that they know your entire brand story, but you also don't want to necessarily give them all that at the top of your PDP.

10:34Dougie:You have to make sure it's a blend of, okay, here's why this is a solution to your particular problem without making assumptions to what people have experienced to this point in their funnel journey beforehand. How does Google Shopping weigh in terms of new, I guess you can, I'm sure you can edit this and change this as well, but generally without customizations, does Google Shopping skew new customer? So Google without any guardrails will always skew the warmest traffic and the warmest traffic is almost always returning traffic, existing intent. And there's always existing intent to some degree, right?

11:10Dougie:But for the most part, it's always going to skew towards a returning user over a first time consumer because that user is much more likely to convert. and PMAX even more so. PMAX tends to be even more retargeting and brand aware focus compared to shopping campaigns. And PMAX encompasses shopping campaigns now, right? Correct, yeah. Is there still room for just standard old shopping campaigns as well? My opinion is yes. Maybe not in every scenario, but we've certainly got some more nuanced setups, especially in our higher scale accounts where, and we're not running this strategy on every single account.

11:45Dougie:There's nuance on when to deploy it, But there is a concept of using shopping campaigns as a feeder because they are typically a little bit less retargeting focus compared to Performance Max. Using shopping to kind of meet that initial impression point or touch point when people are still having intent but not necessarily particularly aware of the brand. And then using later touch points when people continue to do research either on search or Performance Max to ultimately gain the conversion. So sometimes we run a shopping campaign with a lower conversion target because we're under the assumption.

12:22Dougie:We've seen the data to speak to that the fact that these shopping campaigns are driving more new customer acquisition than Pmax or these other campaign types. Do you think there's any aspects to Google Ads, either a setting, a feature, an approach that you think more D2C brands should be using that you find underused? I would say that there are a few and probably ones we've talked about. But for me, it's just tying a lot of the features in strategically. Like there isn't one kind of secret, oh, if you go in this certain area of Google ads, you're going to uncover all this data that you've never seen before.

12:56Dougie:I will say that there is a recent function and I'm a big proponent for always looking at search terms first. It's probably the place I go. If I'm auditing any account, I go straight to search terms. I want to see what's actually popping up, given we've talked about keywords are more signal than actually search terms these days. And within search terms, they've rolled out an ability to use AI to source different keyword or search term trends and insights within the terms themselves, not the keywords, which have been pretty beneficial for me. They save a bunch of time rather than downloading a complete poll of all the search term performance over the last six months or what have you.

13:34Dougie:It can give you more recent trends and ideas for what's been performing, maybe what search terms are popping up recently that haven't before. And that gives insight into campaign building as well. Because Google has the whole like ontological structure of how we form thoughts and our desires and stuff. So it's like you can put your keywords in, but they can see the keywords that kind of hover above those ones below and above and below that are maybe related to that keyword, but you might not be thinking of in your literal mind. Yeah. And that's what... Semantic. That's the word I'm looking for.

14:05Sort of like semantic search, right?

14:06Dougie:Is exactly what broad match type keywords intend to do, right? And that can be great for advertisers that have plenty of data, but it can also be very detrimental if you don't have guardrails within those campaigns as well. So when I'm using Broadmatch, I'm primarily trying to use it to do a bit of keyword mining. I don't want it to target the terms that I've built very specific funnels for. right? I've built a very specific funnel for XYZ term, green hat with brown brim, because I call it out in the ad copy. And then I call it out again on the landing page and show them a post click experience that has a green hat with a brown brim, right?

14:44Dougie:I don't want that to be in my general hat broad match targeting, because I've already built that very specific funnel. And I know that's going to perform much better than just broad generic hat messaging. Well, now, the flip side to that question, are there any settings, approaches, tools that you think are way overused that people like lean on too much? I mean, the flip side of that would be just looking at keyword performance and calling it a day. I think you have like these days, you just have to look at what's under the hood on the YouTube side that applies to placements as well. So I think what's overused is just the easy view on audiences and keywords.

15:23Dougie:And like, there's certainly a benefit to looking at things high level. But you have to validate the high level performance by looking under the hood and ensuring that search terms are relevant and that they're the ones that you're intending to target through XYZ specific funnel. And if you're targeting audiences that they are truly showing up to those audiences when you're looking at those channel placements and when you're looking at as well exclusions and making sure you have those in place. So I would just say that people maybe look to basically at the information provided by Google when they need to validate that basic data with the under the hood look as well.

16:03And I'm sure we'll do something in Q4. Are we in Q4 now? I don't even know. Almost there. Almost there about Google. But where are you guys at right now, September 17th, with your preparations? I know Google is a, it takes off. It's not an instant, And it takes a while to get it up to scale quite often. So where are you guys at with you in your plans and preparations for Black Friday, Cyber Monday at this stage in the game?

16:28Dougie:We're getting pretty close to having things just about tucked away. Like you don't want to be in Black Friday, Cyber Monday or in November generally and making drastic changes to your ad account. If you're a DTC brand that is highly seasonal in November, which the majority of them are, there are some that aren't. But you should be spending the entire year making sure that your ad account is robust. You're spending all this time testing different promotion strategies, different deployment strategies, different executional structures within the ads platform to make sure that when Black Friday, Cyber Monday actually hits, you are primarily making tweaks to your setup.

17:06Dougie:You're not making wide-scale changes because Google does not react quickly or efficiently to large-scale changes, especially when we're primarily using value-based bidding. Again, this is always using a 30-day look-back window. Yes, there are seasonal adjustments that come into play, and Google absolutely implements them during Black Friday through Cyber Monday. But you can't be heading into Black Friday, Cyber Monday with a big plan of a huge A-B test you're going to run. you want to be running that now or even better three months ago so that you have a very considered plan going into Black Friday, Summer Monday.

17:43Dougie:You want to have almost all that tucked away before Q4 hits so that you're purely executional during those big promotional moments. You mentioned a few times this concept of auditing. And I'm actually curious, I'm not exposed to this side of the business as much. How does an audit with the Pilothouse Google team, what does that look like? Is that part of the sales process? Yeah. So before we sign any client, we go through an assessment and an audit phase. So I go in and I look, okay, can we help you basically? And if the answer is no, then we say, hey, I'm sorry, you should look at XYZ other avenue, but Google is probably not where you need to spend your focus, either because there's not a ton of opportunity or because you're already largely maximizing that opportunity.

18:26Dougie:After that assessment, if I've identified that, hey, there's an opportunity here, we hop on a call and I spend time going through the three core problems that I identify in the ad account as it currently stands. And oftentimes this is a looped into a broader presentation around strategy, incorporating other channels as well. But that's the Google component of it. Nice. Well, thanks very much. We'll check back in when we actually do hit Q4, but otherwise, how is your fantasy hockey season looking? I'm optimistic. I'm always optimistic at the start of the year got my eyes on a couple young guns to target i won't uh share who with you so you keep them uh keep them in my pocket not yours nice we're both i think in rebuild so hopefully it's a it's a tough pool to get going but hopefully we can uh we can jump start it with the draft this year maybe maybe pull some great draft floor trades yeah we'll uh we'll make some moves for sure and we'll start to start to get on the come up here we've been uh down the bottom half of the standings for too long yep all right time to flip the script see you dougie thanks eric

19:30Thanks for listening to today's episode. If you're not getting the DTC newsletter, you can subscribe for free at directtoconsumer.co. And if you want to learn more about Pilothouse's all killer, no filler services, take off to pilothouse.co. I'm Eric Dick, and this has been the DTC Podcast. We'll see you next time.