Is Performance Max Google’s “Big Short”?
Christian Bale, Brad Pitt and Ryan Gosling were dazzled by the subprime mortgage crash in the United States in the 2015 film, ‘The Big Short’. But the real star of the show was a dodgy financial instrument called a CDO or Collateralised Debt Obligation. CDOs were invented to combine risky “subprime” mortgages with more desirable, higher-rated debt. Hidden in a banking “black box”, they gave the appearance of AAA-rated investments. But inside was a toxic mess that eventually triggered the GFC.
Seven years on from the movie and Google has given the world its own black box, the ambitiously titled Performance Max. Starting in September, all Google Smart Shopping campaigns will become Performance Max campaigns. And according to our estimate, brands could waste between 25% and 40% of their budget if they just follow the instructions during deployment.
Much like CDOs, Performance Max derives its value from combining Google’s good assets (YouTube, Search) with its not-so-good assets (Display, Maps, Gmail), then packing them into a purpose-built container to protect its inner workings. from the outside world. .
You just say what you want to achieve and Performance Max will do the rest for you. It will choose the keywords, the channel and even create the banner ads for you.
You can see what you put in and you can see the results that Google gives you. But you have no visibility on what is happening between these two points.
For this reason, it’s a good idea to bring some caution to the table.
Thinking back to Google’s history, the changes they’ve made in this space have been good for business. Google business, that is.
It used to be that you picked your keywords and went to market knowing exactly where your money was going. Rather than a black box, it was a nice transparent Perspex box.
Then the sanctity of brand terms ended and clients’ search budgets doubled overnight as they now had to defend their own names against competitors.
Then shopping campaigns came along and chose your keywords for you, often raising prices by bundling terms you didn’t necessarily want. One thing that kept happening was bundling generic terms (which cost more) with branded terms (which cost less) to create a CDO-like hybrid beast that auctioned through the roof.
It didn’t matter, because we could counter that with a negative match. So if we wanted people to search for “blue shoes” but not “cheap blue shoes” (because our blue shoes are mint), we could take the word “cheap” off the table and from our invoice.
Then Smart Shopping appeared and that was the end of the negative correspondence. All in the name of “ease” of course. Google advantage.
Since most marketing strategies can’t live without Google, here are some things to consider when working with Performance Max.
First of all, don’t throw it “out of the box”. You cannot see the search terms you are paying for. You can’t see which channels are driving traffic. You don’t know what your customer did to get to your site. A particular campaign for one client seemed to generate an additional $20,000 per week. But upon closer inspection, we found that it was all about appropriating organic SEO traffic that you would normally get for free.
Let’s assume that Google’s best practices are best for their business, not yours. In our experience, generic Performance Max campaigns can consume up to 40% of a budget by buying unnecessary branded terms and/or cannibalizing organic search.
Avoid this with a tailored strategy and the selective use of segmentation, then showcase those savings or reinvest further up the funnel.
Second, don’t let your marketing team get too close to Google reps. Treat them as you would any other vendor, with a mixture of respect and skepticism and distance.
Make sure their product works for your business and not the other way around.
Remember, at the end of “The Big Short,” the guys on Wall Street kept the money while the taxpayers paid the bill.
Joey Dorrington is Chief Operating Officer at Fenton Stephens