The Future of Paid Search Advertising

Brendan Almack

by Brendan Almack

Posted on Feb 18, 2022

We've covered a lot of ground in the podcast about SEO but what's the current state of Paid Search. Well, it has changed enormously over the last few years, as Will Francis learns from Brendan Almack, MD of Wolfgang Digital. They chat about the three main ways in which Paid Search is changing: it's moving up the funnel, the wide-ranging effects of automation (Smart Bidding), and how cost per click is increasing. Listen in and learn from the experts! 

The Ahead of the Game podcast is brought to you by the Digital Marketing Institute and is also available on YouTube, Apple Podcasts, Spotify, and all other podcast platforms.

Check out the DMI's extensive digital marketing library of ebooks, toolkits, podcasts, webinars, blogs, and more! 

And if you enjoyed this episode please leave a review so others can find us!

Podcast Transcript

[00:00:01]

Will: Welcome to "Ahead of the Game," a podcast brought to you by The Digital Marketing Institute. This episode is a big Q&A, where we explore an area of marketing through a leading industry expert.

I'm your host, Will Francis. And today, I'll be talking to Brendan Almack all about the future of paid search engine advertising. Brendan is the managing director of Wolfgang Digital. Wolfgang is Ireland's largest independent performance marketing agency, specializing in search, social, and email marketing. With 60 digital marketing nerds, Wolfgang is laser-focused on helping e-commerce and lead generation brands grow online. And in their spare time, they're contributing to saving the planet via their social enterprise Wolfgang Reforest.

Brendan, welcome to the podcast.

[00:00:47]

Brendan: Thanks a million, Will. Delighted to be here.

[00:00:49]

Will: It's a pleasure to have you on. This is something that I'm really interested to hear about because we know that paid search is going to undergo some big changes and possibly occupy a slightly different place in the marketing mix. Just let's start with a bit of an overview of that. Give me a high-level overview of what kind of changes are coming and then we'll go into the details.

[00:01:15]

Brendan: Okay. So, I think there are a couple of things that are fundamentally going to shape what paid search looks like in the future. So, I'll give you the top level as you've asked. So, the first one is to do with where paid search is within the marketing funnel. So that's going to change. The second one is related to automation, and a push around automation, automating routine tasks. And the last one has to do with the fact that things are gonna get more expensive for some people. So, costs per click, or CPCs, as people might know them, are going to continue to increase in our view. So those three big fundamental changes are really going to shape what paid search looks like over the next few years.

[00:01:56]

Will: Wow. Okay, interesting. That does sound quite like a significant change. And just before we go into those in detail, where are we at? What big changes have there been recently?

[00:02:09]

Brendan: One of the biggest things that has happened over the last couple of years is around how automated paid search has become or how Google has now applied their machine learning to allow us to get better results. So, Google has a bidding structure, which is called Smart Bidding, which effectively allows people to bid based on an outcome. So, you could say to Google, "Actually, you know, I want to generate this kind of return for this investment." And Google's job then is to use their machine learning which they've been building and cultivating for years through all the signals that Google has access to and to use that machine learning to identify users that look like they're going to buy something on your website or convert at the rates that allow you to get that kind of return. That has probably been the biggest fundamental shift in paid search over the last few years.

[00:02:55]

Will: Okay. So, Google is trying to get smarter about who it shows which ads to. I always wonder this–because we talk about this the same with social ads–you know, the algorithm finding people who best match your goal. And like you say, the first thing you're asked when you place a campaign, pretty much anywhere online now, is “What's your goal?” Is it, awareness, clicks, conversions? That sort of thing. So many people will select conversions. Is it just finding the most gullible people, the people who just buy the most stuff after clicking ads, or is it more nuanced than that, do we think?

[00:03:32]

Brendan: I don't know if buying something online is gullible. I think that's okay.

[00:03:36]

Will: No, that's true.

[00:03:38]

Brendan: So, I think like what Google is looking for...if we take an example, let's say, take a simple example of car insurance, right? So, Google is looking for people who look like they're in the market for car insurance because car insurance is something that, unfortunately, you have to buy every year. So, as an advertiser, it's a funny one because there are only so many people in the markets to buy that car insurance in that particular year. And so, Google will be really good at doing is identifying whether to say, "Will is now in the market at this time, or it looks like he's in the market to buy car insurance." And the way they do that is they've got so many signals of so many data points that they call from, whether it's what you've searched on Google, whether it's something on Gmail, maybe even websites that you visited. So, they're able to pull all that data together at the moment anyway and then understand that this is someone who's in the market for car insurance. And so now, we can maybe afford to, or the advertiser can afford to, bid a little bit more for this user because actually, Google, were quite confident that this person has a high propensity to convert.

[00:04:42]

Will: I see. That just explained it nicely. Thanks. Yeah, no, you're right. Okay. Well, let's get down to the details of these three big changes. The first one you talked about that you think search is moving up the funnel.

[00:04:57]

Brendan: Yeah. Yeah. So, when I talk about the funnel, so your listeners understand, I'm talking about that traditional marketing funnel, you know, awareness, interest, action, loyalty. So, we'll still talk about that funnel in digital marketing. And the position that paid search typically held within that marketing funnel was at the bottom, you know, it was kind of the last mile, you know. It was when people had already done a lot of their research, and now they're ready to put their hand in their pocket, they're ready to take out their credit card, and they're ready to buy something. So…

[00:05:27]

Will: And that makes things hard, doesn't it? When you're running campaigns because you'll be running social campaigns and display video and all this stuff. And then it looks in the data as if, "Oh, wow, search ads are actually doing all the work. Maybe we just switch everything else off because all the conversions are coming from search." But actually, that's not really what happens, is it? It's all assistive stuff around it.

[00:05:50]

Brendan: Yeah, exactly. Exactly. Yeah. So, what you'll typically find is you could have other digital channels that people are using to do their research, and they're encouraging a user to carry out a search on Google. Unfortunately, for those other channels, in a lot of cases, Google will get the credit for the conversion, but most digital marketers have an understanding of that, and they're able to do some attribution in understanding the value the other channels actually played. But what's happening now, though, is your paid search it's moving up the funnel a little bit. So, it's no longer just the last mile. I remember having a look on... There's a great tool that I'm sure some of your listeners are familiar with called Google Trends. I use it all the time. And it's fantastic because you can literally put any search term in there, and you'll get a sense of how searches for that term have varied over the last five years globally, and you can look by country. But if you have a look, and you literally put in the words "cheap and best" into Google, you'll see there's a switch at some points, you know, over the last five years where people have gone from using Google to find the cheapest to finding the best.

[00:06:58]

So maybe related to your last points, they've gone from being gullible to savvy shoppers. So, Google used to be about finding those, you know, the cheapest thing, and now it's more about finding the best. So, for me, that's a signal that the role that Google search now plays within the purchase process isn't just about that conversion, isn't just about that last mile, it now plays a role in that research. And think about yourself. Like, think about any product you've bought, you know, over the last couple of years. Before you go and buy it, like, one of the first things you're probably doing is doing a search for it, whether you're looking for reviews, or you're looking for demos, or you're on YouTube, you know, searching for it that way. So, it does look like Google is gradually moving its way up the funnel.

[00:07:43]

Will: Okay. And do you think that search ads can drive awareness? Is that ever an effective use of search ads?

[00:07:52]

Brendan: So, like, the ad itself may not be able to drive awareness. But if you can capture traffic through a website that does a good job at either reviewing the product or giving the user the information that they need, I think there's a huge value in that. I suppose one way to think about it is, like, where do you want your brand to show? You know, do you want your brand to show on a different channel when somebody isn't necessarily in the market, or do you want to show them some content aligned to the stage of the funnel that they're in? So, again, in a lot of cases, if you're basing the performance of your paid search on, say, a conversion KPI, that might then limit you in what you want to bid on or keywords that you want to be visible for. And let's say we take the example of if you're selling mobile phones, for example, you might feel like you're going to generate many conversions from let's say, an iPhone review or a mobile phone review. But it's a really important part of the research process. So, if you're willing to accept you mightn’t capture a conversion within that click, it's still a valuable part of that journey for your brand to be visible in.

[00:09:06]

Will: I get you. Yeah. It's not all about pointing to a purchase page.

Brendan: Yeah, exactly. Exactly, because you're probably undervaluing the job it's doing then. And I think that the question that digital marketers or paid search marketers maybe need to ask themselves is around that KPI, you know. Are we comfortable determining the value of paid search purely based on the end conversion? And that might be the case for, you know, 80% of your budget and paid search, but there might be an element of your budget-within page search that you say, "Actually, this is really valuable in the long-term. Now, these keywords we're bidding on are really relevant to our brand. This user isn't going to convert, you know, in the next three weeks, maybe not even in the next three months." But we know this is a valuable space for our brands to be visible in and command some space in. So, let's not peg that on conversion, let's have another KPI assigned to that portion of the budget. So I think that might be the evolution of how people start to look at paid search is maybe looking at expanding the KPI set for some of their paid search activity.

[00:10:08]

Will: Because you talk about this idea of share of search.

[00:10:13]

Brendan: Yeah. Yeah. So, one of the questions that we're considering is, like, can search become less of a direct response channel and kind of become more kind of brand awareness? And a good signal for me that that's kind of the way things might be going or it's already happening, I think, it was last year. And some of your listeners might be familiar with Byron Sharp, who wrote that book. It's a great book called, "How Brands Grow," and definitely worth checking out. He's very much into, like, big brands marketing. And he started talking last year about share of search, which was like how much of the share search does your brand command? And for me, that was just a signal that if that's the way people are measuring the impact, maybe paid search is already becoming a brand new channel or maybe it's already starting to move up the funnel.

[00:11:10]

Will: Okay. Cool. Well, that's the first big change. Just one more question about that, and I'll ask you this of the other ones as well, so, with that in mind, what are the actual practical things that our listeners should be doing or thinking about doing in light of that?

[00:11:26]

Brendan: Okay. Yeah, that's a great question. So, I think one of the first things to do is just understand search intent or maybe get an understanding of before a user comes to your website to actually buy something, what are the questions that they're asking? And once you understand that then, you can start to make some decisions around, "Well, is it worth assigning some budget for us to be visible for these searches long-term, like these users come back to our website to convert?" So I think understanding search intent and then trying to understand whether it's worth assigning some budget to be visible for some of those intent keywords is probably the best action you can take.

[00:12:01]

Will: And so, that could be pointing to, like you say, informational content. So, rather than just pointing to buy your phones, you're selling its point to reviews of phones, comparisons, that kind of along the journey content so that we can start to kind of nurture people along the way, and hopefully be their choice when they do get to the end of that journey.

[00:12:26]

Brendan: Exactly. Let me give you an example to make it a little bit more tangible. So, we work with a DIY retailer. So, like, obviously, they're bidding on all the products they stock, but an exercise that they've started working on is to understand, "What kind of questions are customers asking that are related to our products and related to DIY?" So, instead of just building on the products they have, they're now looking at, well, you know, just as winter starts to occur, they noticed that a lot more people are trying to work out how to bleed their radiators because everyone has the same problem where the heating goes on and the radiator doesn't heat up. So, although that person isn't going to come to the website and then buy something, they see a role for being visible for those kinds of circuits. And it might be on Google search, it might be within YouTube with some great content around how to do it. But the win for them is if they're the ones to help their potential customers solve a big problem when it comes time to buy something, you know, or to do something about it, well, they're going to be top of mind for that particular customer.

[00:13:30]

Will: It's funny because, you know, I teach about this stuff. I lecture about subjects like SEO and PPC. And I've made the point to people that, well, you wouldn't buy ads against these informational search terms because they're so unlikely to convert on the day that you won't make your money back. But now hearing what you're saying, I'm thinking, well, in most industries, for a start, those informational keywords, so, with DIY products, it's less going to be kind of like buy a hammer and more how to bleed a radiator. And how to bleed a radiator is going to be a lot less competitive because that's not being bid for by every other competitor in the way that product-related searches are. Is that what you're finding that it is actually you can get quite cheap clicks for those?

[00:14:21]

Brendan: Hundred percent, one-hundred percent. Yeah, they're not as competitive. It involves a little bit more thought from the brand and thinking about, "Well, what kind of content are we going to serve?" Because you're right, we can't just show them a picture of a landing page of a hammer. You know, we need to maybe produce our own content that helps them understand how to go about building a garden shed or whatever it is you're trying to appear for. And so, there's a little bit more thought required. But I think you're right, I think, like, it is difficult because you're not necessarily saying, "This click is going to generate 3X in terms of revenue." But there needs to be some value for the brand. And, like, I'd argue that it can't just be, "Oh, we got great traffic." So, it needs to be something else. So, a way to think about it is, "Well, maybe we could encourage them to sign up for our newsletter." And then we've just entered a whole new world of value because we're now building our first-party data.

[00:15:08]

Will: Yeah. We have a downloadable plan for building your own shed and it's a piece by piece, like, basically instruction manual and to download it, you give us your email address. And that's worth paying 50 cents, $1, or a euro, a click for because we know, that you know, that email address is going to be worth a lot of money because we know exactly what that person intends on doing, i.e., building a shed so we can offer them those products in a very personalized way.

[00:15:32]

Brendan: Yeah, exactly. Hundred percent. And you can see how now if your...if you're a paid search marketer and you're thinking about your strategy, you're like, "Okay, well, I've got my performance budget over here, and that's based on getting say, a return on ad spend of 5X. And now, I've got my upper-funnel budget over here and my KPI is getting newsletter signups. You know, that's what I'm going to try and do and there's great value-added across all of our other channels if I can build our first-party data like that or build newsletter signups like that."

[00:15:59]

Will: That's interesting. That is very interesting. Hello, a quick reminder from me that if you're enjoying our podcast series, why not become a member of the DMI so that you can enjoy loads more content from webinars, and case studies to toolkits, and more real-life insights from the world of digital marketing. Head to digitalmarketinginstitute.com/aheadofthegame, sign up for free. Now, back to the podcast. Okay. Let's move on. The second big change that you see coming in search is the impact of automation and machine learning. So, tell us about that.

[00:16:35]

Brendan: Yeah. So, I don't know if you remember a time when every time Google opened their mouths about five years ago, they talked about how it was mobile-first. You know, everything was mobile-first. And like, I can recall a period in Wolfgang where every time we met with a Googler, like, the first slide was around, you know, mobile-first. And at the time, we were a little bit away from that being the case, but they were 100% right. You know, they got us there. And I think what they were trying to do is show the industry like this is coming, and we're trying to get you ready before it's the case. The same thing happened with machine learning and smart bidding. So, for a long time like, Google has been talking about how smart bidding is really good and our machine learning is really on the ball and you'll get better results with it.

[00:17:21]

And the way we approach things in Wolfgang is, like, we're very open to doing whatever it takes to get our clients better results, but we always like to test it. You know, we always like to just test that we are getting better results. And I remember, a few years ago, we did test smart bidding, and it just wasn't there yet. But over the last two years, that's completely changed. And Google's machine learning and AI are now really efficient at getting really good results, which means that your reliance on things like manual bidding and even keyword segmentation becomes less important. These are kind of large manual tasks that a paid search marketer would have to carry out. But that is less important now because of things like smart bidding.

[00:18:05]

Will: Yeah, that's interesting, isn't it? So, I mean, I've heard that from people where they've tried to basically edit bids and bid amounts and what have you, and it's backfired in a minor way or, it’s just, it's hampered the delivery of ads, in most cases, because they try and bring the bid down. And yes, it's getting the impression people just can't beat the algorithm.

[00:18:32]

Brendan: Yeah, I think that's the way it's going. But if you think about, like, the advantage that one human paid search marketer has over, you know, Google's AI, with its, you know, tens of thousands, or millions of data signals that it's able to process, it's very difficult to make better decisions than it, yeah, which is interesting. And you kind of look at what paid search was and then where it's going. And paid search used to be about, "Well, here's the list of keywords that I want to bid on. And, you know, I'm going to work out that I can afford to pay 50 cents, you know, for a click on each of these keywords." That's completely changed now. We're no longer interested in the, you know, the cost per click, and it's more the outcome that we can achieve for that.

[00:19:15]

And even the keywords, I remember a couple of years ago, our paid search team met with, one of the evangelists in Google, and he was forecasting that he could see, he could see an end to keywords within Google search, you know, within Google ads. And that seemed like pie in the sky at the time. We were scratching our heads wondering how could that ever be a reality. And then recently, it was last year, Google beta-tested something called performance max campaigns, where these campaigns are like, literally, what do you want to achieve from your campaign and what's your budget? And then, thanks very much. We'll come back to you. And, like, there's nothing in-between really. You give them different parts of creative and then they go and look across the whole Google Ads ecosystem. So, they look on Google Search, they look on the Google Display Network, and YouTube, and Gmail. You know, they look across the Google ecosystem.

[00:20:06]

Will: I mean, to be fair, they're best placed to do that. I mean, they've got this vast data set never before seen by mankind, you know. So, like, I get it, you know, but it just seems crazy. It's because we've been so used to this idea of keywords for nearly 20 years now, isn't it?

[00:20:26]

Brendan: Yeah. Yeah, exactly. Yeah. So it's a fundamental change in how things will work. And it was only when they released Performance Max campaigns that I was looking back on what that, like, that evangelists told us, and it's like, "Oh, this is the way it's going to go. Like, you could imagine a world where it's like, put in your URL, how much do you want to pay, and how much do you want to make? And then Google kind of work out the rest." Like, even the automated creative, like, they're just asking us to give them little bits of creative, and they're kind of putting it together dynamically to suit the platform that they're on. But, like, the big question that it does raise is...because performance max campaigns, again, you know, we're really interested in using them, provided that we can get great results. The question it does raise though, is for digital marketers and paid search marketers, were like, "Where does that paid search marketer now add value as part of their activities?" So that's what we'll think about quite a lot. You know, and I think the usual answer you'll get is more time for strategy.

[00:21:26]

And I think, you know if you think of yourself as like a young paid search marketer, and somebody says, "Yeah, okay, Will, you've now got more time for strategy, go back to your desk." like, what do you do then? Do you know what I mean? You don't know. Exactly. Yeah. So, I think it's worth kind of exploring that in a little bit more detail. And there's a couple of things that kind of jump out to me that if I was a paid search marketer, I'd be really excited about. You know, because what automation takes off your to-do list is the monotony of, say, keyword optimization, or the monotony of making manual bidding changes. It then opens up a world to you. All about getting a lot closer to the KPIs and getting to work a lot closer with the clients on KPIs. So, I think paid search marketers are going to become almost like mini business consultants for their clients because what they'll need to understand is not just what their KPI is, but they'll need to get a lot closer, say if you're in retail to profit margin data.

[00:22:25]

Will: Yeah. And you know what? I said I don't know. I do know what I'd do at that time. And to me, it'd be all about the post-click experience. It'd be all about landing pages, and it'd be all about merchandising, about upselling, cross-selling, because that's now the lever you can pull, isn't it? That's the lever you can play with to bring up the return on ad spend.

[00:22:49]

Brendan: Yeah. Yeah. Exactly. Exactly. So, it does kind of open up like the world of possibilities of what you can get involved in does open up.

[00:22:57]

Will: And that's a good thing because, you know, again, I just think that when we teach this stuff, it's like, there are three main components going on here. There are other things, but it's mainly the keywords, the ads, and the landing page. Those are the things that are going to define the success of your campaign. And actually, a landing page is the most overlooked. Most people know, yeah, keywords and ads, but a lot of people don't think enough about the landing page. I would hope that there will be more focus on that because that's where you can make kind of massive, outsized differences like literally doubling the return on ad spend by making changes to your landing page, you know?

[00:23:35]

Brendan: Hundred percent. Yeah. And I definitely agree with you. Like, we do a study in Wolfgang or a KPI study, where we'll actually analyze conversion rates. But if you look at where conversion rates are, you know, say in retail, in particular, like, they're still at, like, 1.52%. Like, that doesn't suggest that websites are doing a phenomenal job because if it's 2% of people that walk into your shop actually bought something, something's kind of going wrong there. So, I completely agree with you that, like, looking beyond the keywords, looking beyond the ad techs, that's definitely a place that paid search marketers can start to add some more value as well. But really understanding those KPIs and understanding the nuances of businesses, I think lots of businesses will have periods where they're trying to drive top-line revenue and there'll be a margin challenge, and+ they're trying to drive the bottom line. I think the paid search marketer or paid search can play a really key role there in being able to pivot between both of those outcomes.

[00:24:30]

Will: Yeah, a couple of questions, actually, just to pick up on stuff you talked about. You said that performance max was beta-tested last year. Is that live now or is it expected soon or...?

[00:24:41]

Brendan: Yeah, everyone has access to that now. Yeah. Yeah. So, like, we're currently testing it with a number of clients.

[00:24:45]

Will: Oh, that's cool. Well, definitely something to go and play with. Just a question, we're talking about all the components, the main components of search campaigns, but is there a place in all this for any of the audience targeting, so are you targeting like in-market audiences and demographics, that sort of thing? I mean, will that be then taken off our hands, or are there still some choices to be made there?

[00:25:09]

Brendan: Yeah, 100%. Yeah, 100%. Like, there's a couple of differentiators, that can kind of set you apart from your competition. Like, one is being crystal clear on the KPI, on what you can achieve, and how much you can afford to pay, and what outcome you need. The second one then is having your own first-party data, or first-party information, or your own CRM that overlay on top of your activities and build audiences that way. And I do think that's kind of crucially important, and probably going to become more important. I saw a slide from Google recently where they were literally advising people to do that. They're like, you know, machine learning, plus first-party data, and plus goal value, I think that was the equation they had. So, that’s, yeah, that's the way they see it evolving as well.

[00:25:51]

Will: That's interesting. Very interesting. Yeah, there's lots to think about. And for anyone who's sort of stuck in the way of doing PPC of, you know, yesteryear, this is quite a new way of thinking about it all. Very interesting. I suppose the action on the back of this one is to go and try it, right? To go and try a performance max campaign.

[00:26:15]

Brendan: Yeah, I 100% get, like, oh, we'd always advise people to try all the beta features, like try the new campaigns, test them against your current campaign. So, with performance max, absolutely, go and do that. And then start like, for paid search marketers, it's important to sound like they haven't got any less busy. There are still so many decisions a paid search marketer has to make over the course of a day, or a week, or a month. But it's just making sure that you know, you're working as closely as you can with the client and aligning your decisions to the business outcome that they need.

[00:26:47]

Will: I mean, on the back of that as well, you say too about paid search marketers being busy, I mean, paid search seems to be booming, you know, as an industry because people are realizing that other channels maybe don't have that. Like, with search, people are literally typing in what they want. You know, it's so different than other ad channels. And I think brands, companies really got that message, and they're coming to people like you in their droves at the moment. It seems to be a hot space to get into, for sure.

[00:27:17]

Brendan: Yeah, it's funny the way it's gone. Like, the last time I had a look at the numbers, it looked like paid search is the biggest marketing channel on the planet, like, unbelievably important to an awful lot of businesses. But, like, it hasn't gotten there by accident. So, there's kind of two parts that have gotten it there. Like, for first is how effective it is. You know, how effective and measurable. So, it's really easy to measure an outcome. And if you've got a good paid search team or good paid search marketers working on the accounts, it can be phenomenally profitable for you. But the second part that's kind of driving the growth and how many people need to get involved in paid search is the fact that it's kind of just a ubiquitous activity. It's like Google created this thing that, you know, everyone now goes and does before they do or buy anything. And so, you have an opportunity as a brand to be visible and to compete for their attention when they actually carry out those searches. So, the fact that user behavior has just moved to this thing we all do before we make a purchase, and the fact that it is really effective, I think it's hard to see it going anywhere. You know, it's hard to see that changing.

[00:28:25]

Will: Yeah, definitely. It seems like if you're going to specialize a good specialism to go into, if any of our listeners are wondering, which specialism in digital marketing to kind of gravitate towards, just say that would be one of the better ones for sure. Okay. Your third big change and I don't love the sound of this, Brendan. I've got to say the CPC cost going up. Talk to me. Break the bad news to us.

[00:28:52]

Brendan: This is something that we noticed last year, actually. It wasn't just Google, it was, like, in social media as well. But definitely in Google, we noticed an increase in cost per click. Like, some of this is definitely driven by the fact that over the last couple of years, everyone's tried to invest in digital. So, there's more competition there. But the impact of more competition means that click costs are going to be higher. Like, don't forget how paid search operates. It operates as an auction, right? So, everyone effectively bids in some form or another, whatever bidding strategy you're using, some form or another, you're telling Google that you're willing to pay a certain amount for a click or a certain amount for an outcome in the case of smart bidding. So that's gotten more expensive. And it doesn't look like that's going to change. Like, you have to remember, like, Google has a duty to their shareholders, and they do a phenomenal job at demonstrating to their shareholders that they are adding value quarter-on-quarter, year-on-year. And so, it's hard to imagine a scenario where they report a decline in cost per clicks.

[00:29:58]

But as we kind of mentioned earlier, costs per click are really only relevant based on the outcome. Like, so, if you've got a high-value product and your website's really efficient at converting traffic, the cost per click, as long as you can make money on it, cost per click doesn't matter. So, I think the key for brands is going to be understanding what their tolerable limits are around cost per click. And some brands will get to that answer a little bit quicker than others. What I mean by that is, some brands will understand the value of that click, maybe there's a value beyond the online purchase. So, let's say you're a multichannel retailer, right? We work with some multichannel retailers that are quite sophisticated in understanding that for every online purchase we get through paid search, we know there's another in-store purchase. And the fact that they've done the work in understanding, that means that they've now just doubled the ROAS that they now get from paid search, right? Which then means that if they're competing against a brand that hasn't made that connection or doesn't understand that they can bid more aggressively, they can get more aggressive with their budgets because they've done the hard work in understanding the value that paid search is offering beyond the online conversion.

[00:31:08]

Will: Yes. And that's happening elsewhere as well. I mean, you know, in social places like Facebook, the cost per click has been going up. Looks like it's going to continue to rise for similar reasons, saturation, perhaps some other reasons as well. So, what can we do about that? How do we mitigate against it or is there any way to do that even? You know, what should our kind of approach be?

[00:31:35]

Brendan: Yes. So, like, understanding that the value that paid search offers is really important. That's what I'm talking about. Like, beyond that conversion online, like, is there an in-store purchase? Because, again, that might just change the complexion of how you're looking at whether that cost per click is too high or not. But there are other things that you can do as well. Like, in Wolfgang, we'll often talk about winning the search before it happens, right? And you kind of alluded to it earlier. You were talking about, you know, that commercial intent search is going to have a high-value CPC. And it's an important point because those commercial intent searches will have a high-value CPC, but if you can somehow almost game the auction so that search is happening in your favor, that will help reduce your CPC.

[00:32:20]

So let me give you an example, right? So, let's say you're selling white goods, and you might be stocking a brand of washing machine. Let's say it's a Zanussi washing machine, and let's say you're Will's White Goods, right? So, there's going to be lots of white good companies bidding on Zanussi washing machines. But let's say you've done a great job of producing lots of YouTube content and helping people understand that thing we talked about earlier around their research process, and you've shown them some great content, and now they're searching for Will’s White Goods Zanussi washing machine, so, what you've done is instead of them searching for just that commercial intent keyword, you've kind of gamed the auction. Now, they're searching for your brand, plus that product. And then you're going to get a cheaper click because of that. So, I think a strategy that people are going to start to think about a little bit more is how do we get them searching for our brands plus category or our brand plus product? And what we can do then is we can manage to win that search before it happens that will ultimately reduce our overall cost per click.

[00:33:23]

Will: I get that. Yeah. So, you're catching them earlier in the funnel, influencing the way that they then search when they've got actual purchase intent. But that costs money. I mean, that is... You know, for all the money you're saving on that final search because it's got your brand in it, obviously, some of that saving is going towards quite pricey, up the funnel activity. But overall, it's still cheaper, like you say, than just going up against everyone else with a straight-up product keyword that is going to be much higher cost per click.

[00:33:58]

Brendan: Yeah. Yeah, I think so. And, like, you're right, there is upper-funnel activity that is expensive, but then there are the likes of, say, YouTube, which, for me, is still just a sleeping giant, where you can get cost per views of like one to two cents, one to two cents, like nothing. So, you can have a small budget and get a phenomenal amount of views on your video for your brand. So, I don't think it has to be the case where you spend an awful lot of money on this upper-funnel activity. You can box clever, and you can find those platforms, but there's still some cost efficiency there. And that might not always be the case for YouTube. But at the moment, it seems like every time we do something on YouTube I'm still blown away at how cheap it is to get in front of a huge audience.

[00:34:39]

Will: Yeah, I mean, it's blasted at scale, isn't it? I suppose that's the thing. Same with social video ads, you know, you can reach a million people for 1,000 of your currency, whether it's euros, dollars, pounds, pretty much, you know. And like you said, a cent per view, something like that. And we're never quite sure who those people are. It's blasted out. But you're right. I mean, you can reach the population of a country like Ireland for what is not a very big budget for a lot of companies. So that's interesting, but I suppose... I mean, the traditional approach would say that isn't that the job of SEO. Isn't that the job of SEO-focused content, where you are picking up those informational searchers earlier in the funnel, and then getting people on your site, essentially, for free, even though obviously, it costs money to create that kind of quality of content that's worthy of the first page?

[00:35:35]

Brendan: That's it. Like, the role that SEO plays or should play is in trying to identify what that search journey looks like and then trying to identify, like, where is it worked out while bidding on these keywords? Or where should we be optimizing our organic strategy to be visible for...that's getting a little bit more difficult, obviously. But it also means that, like, you’re kind of limited by kind of that search volume for those kinds of non-commercial search terms. Whereas if you're using more of something like YouTube, it just gives you kind of mass reach for minimum investments. But obviously, if you are able to invest ongoing in SEO, yeah, that's a great strategy.

[00:36:22]

Will: I mean, it's not either-or, is it really?

[00:36:24]

Brendan: No. No.

[00:36:25]

Will: I suppose in an ideal world, yes, you're on the first page of Google for all those search terms, then paid search can help you fill the gaps because as I'm sure you've found with things, sometimes it can take months and years to rank for certain keywords however good your content is. And so, in the short-term, you can fill those gaps with PPC, and like you say, you can also drive really large-scale awareness through YouTube.

[00:36:50]

Brendan: Yeah.

[00:36:51]

Will: Yeah. Okay. So, we've heard lots about how Google is going to, in some way, change the way that cookies work in the Google Chrome browser, which is the most popular browser, and third-party cookies are essentially going to go away in some way. So, that's going to change the game for a lot of types of advertising. What effect will it have on paid search?

[00:37:15]

Brendan: Yeah, that's kind of the million-dollar question at the moment. Like the way Google has gone is they came up with something called FLoC, which is Federated Learning of Cohorts, a really catchy name, which is meant to be an alternative to the third-party cookie. They've scrapped that based on feedback. And now, they've got this other alternative called Topics. But again, it's yet to be seen whether there's still going to be an alternative to the third-party cookies that we can use. The big impact that it's going to have for paid search is around that audience collecting and audience overlays. So, there's a part of paid search that won't be impacted at all, where, you know, people are carrying out a search. We can still show them a paid search ad, we can still bring them to the website. The big impact will be around how we capture audiences, and specifically how we retarget those audiences. And so, again, the visibility that Google has given us on that at the moment is just that they have this alternative. So, we simply don't know, like, from what they've told us. But that's worth keeping an eye on because if remarketing or your audience strategy is a big part of your paid search strategy, that could be something that you might need to reconsider at the end of 2023 when Google eventually does kill the third-party cookie.

[00:38:35]

Will: Okay. Well, thanks. That's incredibly insightful. Thanks a lot, Brendan. I really appreciate your time explaining those things to us, and I know our listeners will, too. Just one more question for you, where can people find and connect with you online?

[00:38:49]

Brendan: Yep. Well, you can find me on LinkedIn, Brendan Almack on LinkedIn. And if you go to wolfgangdigital.com, you'll be able to sign up for our newsletter, and you'll hear more of my thoughts and ramblings.

[00:39:02]

Will: And we will do just that. And thank you very much. Yeah, thanks for your time. Cheers, Brendan. See you.

[00:39:07]

Brendan: Thanks a million, Will. Take care. Bye-bye.

[00:39:10]

Will: If you enjoyed this episode, subscribe wherever you get your podcasts. And for more information about transforming your marketing career through certified online training, head to digitalmarketinginstitute.com. Thanks for listening.

Related Articles


Brendan Almack
Brendan Almack

Brendan Almack is the Managing Director of Wolfgang Digital

In a previous life, Brendan worked as a Geotechnical Engineer analyzing data and trying to use the data to solve problems. Now he works in digital marketing… and does pretty much the same thing. 

Brendan is the Managing Director of Wolfgang Digital, an Irish-based performance marketing agency working with brands around the World. He is particularly interested in performance digital marketing with a focus on integrating marketing activities across multiple channels. Like all Wolfgangers, he’s obsessed with defining and accurately measuring campaign KPI’s. Brendan’s work has won multiple Irish & International awards including “Best Integrated Strategy” at the Drum Awards. Brendan is a regular speaker on the international circuit having spoken at Hero Conf, SMX, SES, Friends of Search, and 3XE. 

Upgrade to Power Membership to continue your access to thousands of articles, toolkits, podcasts, lessons and much much more.
Become a Power Member

CPD points available

This content is eligible for CPD points. Please sign in if you wish to track this in your account.