AdWords Smart Goals: not a smart move for advertisers

If I told you that your company could automate your paid search advertising bids based on the conversion data of thousands of other businesses, but not your own data, would you tell me to take a hike?

I think it’s safe to say that many of us PPC professionals disagree with Smart Goals for various reasons – and think this new offering from AdWords is just downright dumb.

There’s certainly been some heated conversations around the web on the issue of Smart Goals, and this post from Julie Bacchini of Neptune Moon has some very good points.

Let’s look a little closer at what I believe the issues to be, and I’ll end on a positive note by highlighting something interesting that Smart Goals is doing.

smart goals

Companies that might use Smart Goals are not all that unsophisticated

First, it really doesn’t matter if the company that would use Smart Goals is a local brick-and-mortar storefront or an enterprise business. In my opinion, the data is not providing anything valuable to anyone.

However, AdWords talks it up as something that the small to medium-sized business can use, because, hey – if they’re not using any tracking conversion at all, they might as well use some kind of data.

From the announcement (as linked to previously):

To generate Smart Goals, we apply machine learning across thousands of websites that use Google Analytics and have opted in to share anonymized conversion data. From this information, we can distill dozens of key factors that correlate with likelihood to convert: things like session duration, pages per session, location, device and browser. We can then apply these key factors to any website. The easiest way to think about Smart Goals is that they reflect your website visits that our model indicates are most likely to lead to conversions.

That’s like saying to a lost traveler, “Since you don’t have a GPS, I’m going to draw this map on a napkin, and I’m really not familiar with the area, but [shrug] it’s better than not having any directions at all!”

While the positioning statement via Google (and some of the surrounding opinions I’ve heard) is geared towards advertisers who may not be as sophisticated as others, hence, they don’t have conversion tracking – I bet if we looked a little closer, we’d see just who those advertisers might be.

For example, would you call a global multimillion-dollar brand that spends $30,ooo a month on AdWords an unsophisticated advertiser?

No?

Because those types of companies often don’t have conversion tracking for one reason or another – usually because there are so many layers to getting updates on the site (let alone installing a tracking code) that it creates a roadblock to getting anything done.

Plus, there’s also this interesting requirement to get Smart Goals going (from the Google announcement):

Note that your Google Analytics view must receive at least 1,000 clicks from AdWords over a 30-day period to ensure the validity of your data.

That’s not really small potatoes. So you have to get 1,000 clicks from AdWords to validate unreliable data? Hmmm …

To play devil’s advocate, let’s just pretend you run a small business and you advertise in search and you now have access to this Smart Goals feature.

And let’s say you’re the type of person who is focused on running a business – not your advertising – and aren’t tracking conversions, probably don’t have Google Analytics installed on your site, and if you do, never look at the thing.

So here comes this feature that again asks you to take some form of action with your tracking, and gives you data but doesn’t give you the tools to optimize your AdWords account in a smart way so you’re set up for real ROI.

Does this sound reasonable?

Smart goals + target CPA = more $ for Google

Okay, I said it. As PPC pros, we don’t want to bite the hand that feeds us, but we look out for our clients first and foremost, and something stinks about this Smart Goals/target CPA pairing.

From the announcement, Google says:

One of the benefits of measuring conversions in your Adwords account is the ability to set a target cost per acquisition (CPA) as opposed to just setting a cost per click (CPC). If you aren’t measuring actual conversions today, importing Smart Goals as conversions in Adwords allows you to set a target CPA. In this way, you’re able to optimize your Adwords spend based on the likelihood of conversion as determined by our model.

Translation: let’s get these advertisers on autopilot.

I’ll venture to guess that Smart Goals + target CPA may be the new up-and-coming default setting AdWords will include on all those business accounts that are never touched beyond the initial set up. What do you think?

I shudder at the thought, but I wouldn’t be surprised if businesses start getting cold calls from agencies that promise to ‘optimize’ their AdWords accounts on a monthly basis using Smart Goals for as little as $200 a month.

On a positive note …

I said I would end on a positive note, and I do think it’s interesting how Google created a workaround for conversion tracking using engagement factors. And I see how that can work.

Remember that example I gave of a multimillion-dollar brand not tracking conversions? I know this because of experience my agency has with this type of scenario.

And often in this situation, we’ll optimize ad campaigns for engagement factors like time on site and pages per session.

Right about now, you’re probably wondering why, if I do this type of conversion optimization around engagement factors, do I have such a problem with Smart Goals.

Here’s one difference: My agency is a partner with our clients and actively manages the bids and their ad accounts based on metrics we’re closely watching, taking into account their business and advertising goals, budgets and preferences.

One client that didn’t have conversion tracking and that we were optimizing their campaigns for engagement metrics did see a 20% lift in their revenue coming from the PPC channel, so we know it works.

But, engagement metrics differ from business to business. As Julie pointed out in her article (linked to at the top of the page):

A very simple example here, if a site has calls as their conversion goal, their pages per session and session duration are often quite short. If you have a good landing page, calls happen fast and goals are achieved. Conversely, if you have a lead generation type of site, people often need to spend longer on your site and consume more page content before filling out your lead form.

As you can see, I’m simply not a fan of Smart Goals, and am less of a fan of what this might imply for countless businesses and their advertising.

But maybe I’m wrong… maybe it will help some companies – and I’d love to hear your take on it in the comments below.

Pauline Jakober is CEO of Group Twenty Seven and a contributor to Search Engine Watch. You can follow Pauline on Twitter.

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