2018 was a crazy year for Google Adwords. For one thing, they rebranded from Adwords to Google Ads. And if 2018 was any indication, 2019 is going to be another big year for Ads as well.
2018 was marked by one key shift that impacted many different aspect of Adwords: machine learning and automation. Google spent the year slowly taking control away from users in an attempt to leverage machine learning to boost performance.
In the past, you had primarily manual bidding strategies, where you bid an amount for a click and you paid that amount. 2018 saw the introduction of new automated bidding strategies and a greater focus on moving from manual bidding strategies to fully automated ones. You are now all but expected to use bidding strategies like maximize conversions and target CPA.
Google has been tinkering with exact match for a couple years, and it finally died in 2018. For most of Adwords history, exact match meant just that: your ads only triggered if the query exactly matched your keyword. Those days are gone. Exact match is now based on the intent of the query, and it can trigger a wide range of queries, in some cases queries that are not actually relevant. While Google said the changes to exact match were designed to help users get more conversions, the real goal was simple: more clicks means Google makes more money.
Another big rollout in 2018 was Google’s responsive ads. The traditional two headlines and one description text ad structure now features up to 15 headlines and 4 descriptions. Google then uses machine learning to choose which headlines and descriptions to show based on which query. So far, the results on responsive ads are pretty mixed.
So we've taken a look at what happened to Ads in 2018, and here's what I think we're likely to see happen to Ads in 2019.
The trend towards automation and machine learning is only going to continue. Ads is an extremely complex platform, and most businesses and individuals are not capable of creating an optimized and profitable account on their own. Automation and machine learning helps to flatten the curve and improve performance for the vast majority of accounts.
For most Ads users, these features are welcome, as it makes it easier to run a campaign that is profitable. Unfortunately, this improvement for the lower-performing majority of advertisers comes at the expense of the highest performing advertisers. I anticipate that 2019 is going to see declining ROI on Ads for the top 10% of advertisers.
Google is pushing the new Local Service Ads product very aggressively, and it represents a radical departure from the traditional AdWords platform. Instead of paying per click, local service ads charge a flat rate per lead. I anticipate that the the cost-per-lead structure is going to grow in popularity for Google.
One reason that I think Google is going to be pushing cost-per-lead is because it will result in Google making more money. More traffic is mobile today than ever before, and businesses struggle to convert mobile clicks. This inability to convert mobile traffic means that bids for mobile clicks is lower, generally, than desktop. This threatens Google’s profitability.
Enter pay-per-lead. Google rightly assumes that it can convert mobile queries into leads at a higher rate than the average advertiser, so it makes financial sense for Google to skip the advertiser-side conversion entirely and sell the lead directly.
Overall, I think 2019 is going to be another year of big changes for Google Ads and the online advertising industry in general. Competition is going to increase, and changes are going to come fast. Businesses will need to stay on top of these changes in order to see strong return on investment.