We recently had the opportunity to run a PPC campaign against Google’s smart bidding. After 6 weeks, the results show why you should continue using a Digital Marketing agency, like Simply Clicks, to run your PPC Advertising.
One of our clients was working on their Google My Business presence. Whilst doing so they were contacted by a Google adviser and encouraged by them to set up an automated Google ads campaign. Between the client and the Google adviser they plugged in the necessary information to get the PPC campaign started, and off they went.
A few days later, we spotted via Google Analytics that the client’s PPC spend on the account was starting to increase above budget. So we investigated. We saw that an additional Google Campaign was live. We made contact with our client, who confirmed the details. Our response was to leave the campaign running. And so, the stage was set. Our “manual” PPC campaign was up against Google’s “automated” PPC campaign.
Calculating return on advertising spend (ROAS)
We measure a number of conversions on the account and apportion a nominal value against each of them. The client’s average revenue per sale is above £50,000, with a 30% plus margin. Enquiries, where full contact details are acquired, are valued at £50: downloads, phone calls and emails at various values between £5 and £20.
A couple of weeks in, it was clear to us that Google was bidding on terms that were unlikely to achieve the same return on ad spend (ROAS) as ours. But building a successful PPC campaign takes time. Maybe the intelligence behind the google engine needed more time and information. Therefore we decided to allow the automated campaign to continue for another few weeks.
After 6 weeks in, ROAS was not improving and we decided to switch off Google’s automated campaign. So what do the results look like?
The graph below shows the Spend Amount and the Goal Values for each campaign.
The good news is that, although Google’s automation didn’t perform as well as Simply Clicks’, it did generate a positive return. Just.
On average, the “automated” campaign delivered a £1.11 return for every £1 spent. Whereas, the Simply Clicks’ “manual” campaign generated £4.42 of nominal value for every £1 spent.
In the Simply Clicks campaign, the terms containing the clients brand name generate 6.5% of its nominal conversion value. And the average cost per click (CPC) is 8p. Meanwhile, in the “automated” campaign, the terms containing the clients brand name generate 18.1% of its nominal conversion value. And the average CPC was 19p.
One observation from previous experiments is that Google automated campaigns will tend to buy and overbid for branded terms. As these will more easily convert than generic search terms.
Using a Digital Marketing agency clearly has its benefits. When we retrospectively looked at the results, we asked ourselves, why?
We obviously believe in our skills and our business. And the results back that up on their own. But Google’s automation has the challenge of doing right by all of its customers, including the customers that are competing with each other. If you have more than one business competing automatically through Google’s auction platform, how does it decide who should win?
We think the simple answer is that they all do. Which explains why the campaign we observed made a positive return. But not by much.