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How the latest change to Google AdWords will impact you

How the latest change to Google AdWords will impact you

By David Towers, Director of Search and Digital Projects, & Wing Lo, Performance Director, EMEA, MEC

On August 14th 2014, Google announced that in late September 2014 they will be removing the ‘close variant’ matching behaviour targeting option from within AdWords accounts, so that it will now be enabled automatically on all keywords an advertiser wants to appear against.

The ‘close variant’ matching behaviour was introduced in May 2012 and since then advertisers had the option to disable this feature. This change essentially means that advertisers will no longer be able to select the exact keyword they want to appear against.

With the ‘close variant’ matching behaviour enabled, search ads are triggered against the use of misspelling, singular and plural forms, stemming, accents and abbreviations.

Google states that it made this change to make it easier for advertisers to connect with consumers who are searching for keywords closely related to the keywords the advertiser wants to appear against.

According to Google, advertisers using close keyword variations, receive an average of 7% more exact and phrase match clicks. So essentially, making the ‘close variant’ matching behaviour standard, means that Google will be growing the number of search queries that advertisers are bidding against thereby increasing Google ad revenue. Here are some of the implications.

1. Higher volume of searches will be captured

As exact and phrase match keywords will now capture other permutations it is likely that existing keywords will deliver more search volume. In 2013, John Wiley, Google’s lead for user experience on Search, revealed that 15 percent of search queries have never been seen before by Google and we know search patterns have been changing with the growth in mobile and voice search. Through Google enabling ‘close variants’ as default, it will ensure that advertisers capture previously undiscovered terms without needing to add terms in ‘broad match’ that would have otherwise resulted in less relevant terms.

2. Risk of appearing against irrelevant searches

As the change will allow keywords to be triggered against different permutations of searches, there is a risk that search ads will appear against keywords which are irrelevant. For example, a financial advertiser may want to buy the keyword ‘bonds’, but Google could with ‘close variants’ enabled also serve the financial advertiser’s ads when a James bond film fan searches for the keyword ‘bond’ because ‘close variants’ will match against plural forms, misspellings, stemming, accents and abbreviations.

Google’s pricing model is built on rewarding advertisers who are relevant to users’ search queries. The more relevant an ad is to the user, the higher the quality score is and the less an advertiser has to pay per click. As a result of ‘close variants’ there is now a higher probability that an advertisers will appear on irrelevant search queries which could have a negative impact on an advertiser’s quality score and result in higher CPCs.

3. Unintentionally assigning wrong max bids to keywords

Our Search teams at MEC assign maximum bids at the keyword level to ensure accounts are as optimised as possible. Bids are determined by how valuable we believe a keyword to be and are usually influenced by key metrics such as Cost per Acquisition (CPA) or Return on Investment (ROI). For example, on using ‘traditional exact match’, we may choose to bid max €1.00 CPC on the keyword ‘Chauffeur’ based on a CPA of €20.00 and only bid max €0.50 CPC on the keyword ‘Chauffeurs’ based on a CPA of €30.00. The problem however once ‘close variants’ becomes mandatory is that both the ‘Chauffeur’ and ‘Chauffeurs’ bids are eligible to appear against the search queries ‘Chauffeur’ and ‘Chauffeurs’. This essentially means that we won’t have the level of control we used to with the ‘traditional’ exact match type which our teams used.

4. Self-competition could inflate CPCS

The price paid for clicks within AdWords is partly based upon the volume of competition for keywords. Click prices are determined by supply and demand, if a keyword is desired by many advertisers, they will bid for that keyword and so the cost of that keyword will be higher than a less popular keyword. As a result of the change in making ‘close variants’ mandatory, because many of an advertiser’s keywords may be eligible to appear against for the same search query, there is a risk that these keywords will actually unintentionally inflate the auction.

5. Negative keywords are now even more critical

Google allows advertisers to use negative match to prevent an ad from showing to users searching for certain terms and thus filter out irrelevant traffic and prevent unwanted clicks. For example, a financial brand could use ‘bond’ as a negative keyword to stop their ads from appearing against the ‘bond’ search query.
With ‘close variants’ becoming default, the use of negative keywords will become more important and a way to ensure that the ad only shows for search queries which are relevant. To ensure this happens, it will be important that additional emphasis is placed upon on negative keyword mining as part of on-going account optimisation.

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