Today in Digital Marketing - Sometimes We Just Stick Our Hand In and Move Stuff Around

Starting point is 00:00:00 It is Wednesday, September 20th. Today, a bombshell admission from the biggest ad platform on the planet. Will it shake the trust of advertisers? We have extended coverage. Also, Microsoft adds Hulu, HBO Max, and other TV as ad placements. Meta starts to sell blue checkmarks to brands. And another retailer joins the no free returns trend. I'm Todd Maffin. That's ahead today in digital marketing. Do you have business insurance? If not, how would you pay to recover

Starting point is 00:00:33 from a cyber attack, fire damage, theft, or a lawsuit? No business or profession is risk-free. Without insurance, your assets are at risk from major financial losses, data breaches, and natural disasters. Get customized coverage today starting at $19 per month at zensurance.com. Be protected. Be Zen. The digital ad market is supposed to be somewhat self-leveling. When there's more demand, the price goes up. Less demand, the price goes down. What's not supposed to happen is the platforms arbitrarily raising prices in the auction to meet their own corporate revenue targets. But that's exactly what Google is being accused of doing. And the company making the accusation? Google itself. In its

Starting point is 00:01:20 antitrust trial in the U.S., Google ad executive Jerry Dishler told the court that Google frequently tweaks the auctions, increasing the cost of ads and reserve pricing by as much as 5% on average and sometimes as much as 10%. That might sound like a small bump, but for many campaigns, that's the difference between profitability and loss. Worse, when asked to explain why Google did this, he said it was because they were told, quote, to get creative so we could meet our quota, unquote. He also said that Google doesn't usually tell advertisers about pricing changes like that. Normally, every Wednesday, exclusively in our premium podcast,

Starting point is 00:02:02 our Google Ads correspondent, Jill Saskin-Gales, joins us to discuss the week's changes in the Google Ad platform. Given the gravity of this story, we are publishing it to the full podcast audience as well. Jill spent six years at Google and today runs a respected ads training program. I spoke with her earlier this morning. Take us to the basics here. How does the auction actually work? The way the Google Ads auction is supposed to work is a little different than a normal auction.

Starting point is 00:02:28 If you're bidding for something on eBay, for example, you bid, someone else bids, and whoever is willing to pay the most wins, gets to show an ad. But the way it works on Google, it does take into account price, but it also takes into account something called quality. So if you've ever heard of quality scoring Google ads, this is what we're talking about. And Google puts together the price you're willing to pay and the quality of your ads and uses both of those together to determine your ad rank, whether or not you get to show an ad, where on the page you show an ad. And so what's really cool about that is the higher the quality of your ads, the less you actually have to pay for the privilege of getting that click on the Google search engine results page.

Starting point is 00:03:10 How does that actually work, though? Because I don't like sit there like an eBay thing and wait for the other advertiser to bid something and then I go in and raise it by a penny. This is just programmatically happening. Yeah, it's happening in milliseconds. And it's mostly happening through smart bidding now. So if you are using a smart bidding strategy in Google ads, like maximize conversions, you're not saying I want to be up to $2 for this keyword, up to $3 for this keyword. Instead, you're just saying, Google, take my money, get me as many conversions as possible. And for every single auction you enter, Google uses millions of different signals processed by AI, of course, to determine what you should bid in every single auction to maximize your conversions.

Starting point is 00:03:55 This Google executive was talking about reserve pricing being the lever here that was being moved around. What is reserve pricing in the Google ad auction? Reserve pricing is kind of the minimum amount you have to pay for the privilege of showing an ad. So let's say, for example, you are the only person entering an ad auction. Maybe it's for your brand name and there is no competition. You don't just pay a cent. You have to, they'll actually pay something, a nominal fee. And so they could increase that 5% to 10%. And no one would really know. You may see this in your brand CPCs increasing slightly.

Starting point is 00:04:32 But that's one place where there isn't any other competition. You're the only one eligible for whatever reason. Or maybe there are auctions that weren't previously monetized, like searches that previously had no ads. Now they are going to start showing an ad there, that would be at that reserve price, which is a minimum price and something that always things that Google was manipulating and not telling advertisers. Also, and I want to quote from a Bloomberg reporter this morning and get your thoughts on it. This is a quote from Bloomberg. One change that increased Google's revenue was, according to the testimony, that they switched the auction. So the runner up was given the top advertiser slot and the actual winner, the second spot. Oftentimes,

Starting point is 00:05:27 major advertisers like Amazon and booking holdings win any ad auctions where they bid and take the top slot. With this approach, quote, we flip them, unquote, Dishler said, quote, otherwise, Amazon always shows on top, unquote. Dishler said he didn't know if the change led advertisers to place higher bids, but it increased Google's revenue, unquote. Jill, it's hard to not look at that as just outright lying. Am I wrong? You are not wrong. As someone who worked at Google for six years and puts a lot of trust in the Google platform,

Starting point is 00:06:08 this feels like a stab in the heart hearing that read because we're basically saying, even though we have this auction system that we've made work beautifully over the last 20 years, sometimes we just stick our hand in, move stuff around, and don't tell people about it. And while this would not affect the vast majority of advertisers on Google, if you work at booking holdings or Amazon, these are the kind of companies that I wouldn't be surprised if they're spending billions a year on Google Ads right now. It's pretty shocking to hear that you're a top customer and they're pushing down your ads, which means you're either losing a lot of potential revenue or you're then having to increase your bids further and spend more to try to get back to that top slot. So I haven't seen this aspect reported widely, but this, I believe, really cuts to the heart

Starting point is 00:06:48 of broken advertiser trust with Google, which is always an issue. But this really hurts it to have them saying we specifically are manipulating our auction to punish our top spenders so they don't show up on top as much. This was said to have happened in the spring of 2019. You worked at Google in their ads division at that time.

Starting point is 00:07:10 I did. Did you feel any kind of quota meeting pressure in your job? There's always pressure to meet quota. I was an international growth consultant in large customer sales. So basically a specialist. My Google ad specialty was international growth within the large customer sales. So basically a specialist, my Google ad specialty was international growth within the large customer sales organization. So the kind of businesses that spend millions of dollars a year on Google. And so we did have sales quotas and some of the more junior roles,

Starting point is 00:07:36 your compensation from quota could be like 35 to 40% of your base salary if it's on target. By the time I left, I believe I was at 70%. Wow. So if I hit my quota each quarter, I'd make an additional 70% on my base salary. So it's a huge portion of compensation. I will say that Google does try to make it fair among Googlers. So if one quarter, you know, we really missed on quota, they kind of go a little, try to go easy on you next quarter so you can hit. They try to make every Googler hit 100% on target by the end of the year. But of course, you want to exceed quota. I did that before, because the more you exceed quota

Starting point is 00:08:15 at Google, the more you get this multiplier. So if you hit I forget if it was 120%, or 140% of your quota, but if you have one of those numbers, you end up getting what's called double bonus. So there are absolutely incentives to do so, monetary incentives, it goes into your performance reviews. But the downside, of course, is if you do really well on quota, they give you more quota next quarter. And then you have to lap that year on year growth, because Google really cares not just about the hard millions and billions that you're earning for the company, but also that growth that you're getting that double-digit growth out of these really large clients. Maybe I fly a little too close to the sun on stories

Starting point is 00:08:52 like this, but I feel like this is one of the biggest stories in our industry in certainly months and maybe a year. Am I overstating that? And what effect do you think this will have on the average brand, the average advertiser and their trust in Google? I don't think you're overstating it at all. I agree that this is huge news. And in my opinion, the piece you mentioned from the Bloomberg article about arbitrarily switching which slot people appear in, that is truly shocking and just not the way the FAIR system is supposed to work. Will this affect the vast majority of advertisers, either in their advertising or their perceptions of Google?

Starting point is 00:09:30 No, we have to remember the vast majority of Google ads advertisers are not people who sit listening to a marketing podcast, right? They're small businesses. They're spending their $10 here, their $100 there. They're missing out, Todd, but that's not who the vast majority of advertisers are. But I think for the larger, more sophisticated advertisers who are, of course, listening to this podcast and very tuned into

Starting point is 00:09:50 these sorts of things, there's always been a bit of a trust issue there, especially with more and more AI being leveraged in the platform. But this is like not a platform change. It's not AI. It's not saying trust our smart bidding or follow our recommendations. It's Google, someone from Google admitting we have not been playing fair with your money. And that's, of all the scandals Google Ads has had over the past couple of years, that's a really hard one to fix. So I think people will still keep spending on Google Ads. But I would not want to be working on a Google Ads sales team right now working with large customers, especially Amazon or Booking, who are mentioned in the article. Yeah, no kidding. We'll watch this story very closely with your help. Jill, thank you so much. Thank you. Jill Saskin-Gales is our Google Ads correspondent.

Starting point is 00:10:37 You can learn more about her Google Ads training program at our affiliate link at b.link slash gatraining. Jill actually joins us every week on the Premium Podcast to cover that week's changes in the Google Ad Platform. If you run Google Ads for your business, it is 100% worth the investment. You can learn more by tapping Go Premium in the show notes or by going to todayindigital.com slash premium. Do you have business insurance? If not, how would you pay to recover from a cyber attack, fire damage, theft, or a lawsuit?

Starting point is 00:11:15 No business or profession is risk-free. Without insurance, your assets are at risk from major financial losses, data breaches, and natural disasters. Get customized coverage today starting at $19 per month at zensurance.com. Be protected. Be Zen. A week after complaining that traditional last-click attribution doesn't credit their platform enough, TikTok this week launched new attribution analytics that it says will better show the connection between brand exposure and conversion. The first feature is performance comparison. This lets you visualize conversions across different time windows.

Starting point is 00:11:54 TikTok has said it feels a 28-day measurement period gives it more credit for successful ad campaigns. Quoting social media today, according to TikTok, most conversations that should be attributed to in-app exposure go uncounted because of the way in which people use the app to browse during an active session, then browse and buy at a later stage. value TikTok conversions by a whopping 73%, while 79% of purchases that are driven by TikTok are not captured through common attribution methods, unquote. In addition to conversion tracking, you can also see numbers from further up funnel like view content, add to cart and initiate checkout. You'll be able to find all this inside the TikTok ad manager. There are changes to Microsoft's ad platform to report as well.

Starting point is 00:12:57 The company today announcing a new video ad offering on its network, video and connected TV ads. Yes, CTV ads, meaning you can upload your video ads to the Microsoft ad manager and they will appear on sites like HBO Max, Hulu, and Bloomberg TV, as well as within web players on news sites like the Huffington Post, People, and the Wall Street Journal. There are also cross-channel frequency controls, meaning you can set a maximum number of times you want to reach the same person with your ad, regardless of which video site they're on. Quoting the company, Microsoft's audience intelligence is much more than just search intent. It's a collection of permissioned first party data points combined across multiple properties that help you reach your ideal customers. This includes search and web activity from Bing and our browser, Microsoft Edge, content interests from Microsoft Start, demographics, and more. Then we apply machine learning algorithms to develop audiences based on consumer product

Starting point is 00:13:51 and brand preferences, purchases and conversions, content preferences, and location, unquote. The video ad space is, of course, a hot space right now. E-marketer says they expect U.S. programmatic video ad spend will grow about 30% between now and 2025. Meta announced today it is expanding its paid Blue Checkmark program to brands. Until now, it's only been available for individual creator accounts. Like its verification for creators, Meta's new Verified for individual creator accounts. Like its verification for creators, Meta's new Verified for Businesses program gets you the checkmark, better placement

Starting point is 00:14:30 and search results, and inclusion in a feed carousel called Recommended Meta Verified Businesses. The cost is $22 per month per Facebook page or Instagram account. By comparison, that's about $10 more than the individual creative version. It is $35 if you want to bundle your two accounts together in the business package. Paid verification is said to be coming for WhatsApp too, but prices and timelines weren't disclosed. I guess that's a deal when you compare it to X's equivalent,

Starting point is 00:15:02 which is $1,000 a month, plus $50 a month for each affiliated account you also want that check mark on. Still, some people who've paid for verification with Meta say it's not all it's cracked up to be. The news website The Information yesterday reported on one business owner who paid for verification, partly because the promise was

Starting point is 00:15:22 she'd be able to get human support if she needed it. Then her account got deleted. She wasn't able to access support through her account because, well, it had been deleted and she couldn't find any of those humans that the verified program promised. Our own experience was also disappointing. As a test, we tried to verify our own account. First, it took our money. Then it rejected our application and never gave our money back. I think we tried to appeal through Apple, but to be honest, I'm still not sure if that worked.

Starting point is 00:15:54 Anyway, Meta verified for business. We'll start rolling out in the next few weeks. WhatsApp today announced an upgrade to its shopping workflow with a new system called Flows. This will let people do things like select a seat on a flight or book a hair appointment right within the app. Quoting TechCrunch, Merchants will have building blocks ranging from a text box to a calendar and a seat picker to build these experiences. WhatsApp said these tools will be available to businesses in the coming months.

Starting point is 00:16:25 A support page for Flows indicates use cases like booking appointments, product customization, logging into their accounts, filling out forms, and signing up for events, unquote. So far, Meta is not charging merchants for using Flows. Apparently, this will be covered by the existing costs of having conversations with customers. They're also adding some new payment partners for checkout in India, where WhatsApp has more than 500 million users.

Starting point is 00:16:54 All right, that'll bring us to the lightning round. The retailer Saks reports that 58% of luxury consumers plan to spend the same or more on luxury items soon, a rise from 53 percent in the previous survey. This is the first increase since May of last year. Amazon plans to hire 250,000 employees for the holiday season, a significant increase from last year's 150,000. H&M is now charging U.K. customers a £2 return fee for online purchases. They say it's to help reduce costs and carbon emissions from mass returns. In-store returns and H&M members are exempt from this fee. And Reddit has released a new Retailers Advertising Handbook, offering tips on effective Reddit marketing.

Starting point is 00:17:39 The guide covers best practices for Reddit ads, targeting options, and creative strategies. Links to the full details of these lightning round stories are in today's free newsletter, which you can sign up to by going to todayindigital.com slash newsletter or tapping the link in the show notes. And finally, Amazon is dropping the cameras from its Just Walk Out technology that lets people walk into a store, take whatever they want, and leave and have Amazon's tech build them later. Until now, this has relied on dozens of cameras and sensors mounted in the ceiling, making stores look more like the set of Big Brother. This upgraded version uses RFID tags to track your purchases as you leave the store. Quoting The Verge, The system is pretty straightforward.

Starting point is 00:18:26 Each item, in this case mostly clothing, gets an RFID tag that looks like a normal clothing tag. Customers come into the store, pick out what they want, and walk through an exit gate that scans the tags and tallies up the bill. Then they scan their credit card or wave a palm over an Amazon One scanner and leave. The pitch for Amazon here is that an RFID system will be drastically easier for companies to implement.

Starting point is 00:18:50 Rather than wire their buildings with an expensive camera system, they can just switch their tags, add a few gates, and be done, unquote. This technology is mostly in testing right now, though the company says it has fitted 150 stores with the camera version so far. ask questions and get help. Hey, Jill Sassengales is in there too, so you might be able to throw a Google Ads question at her. Again, it's free to join. All you have to do is go to todayindigital.com slash slack or tap the link in the show notes. Still playing Starfield? That's why I haven't been

Starting point is 00:19:34 talking much at the end of shows because I just want to race upstairs and continue playing. I feel like I'm getting to the end. Maybe. Who knows? So I'm slowing it down. I'm playing lots of side quests. The story is great, by the way, so if you're on the fence about Starfield, it gets my recommendation especially if you're a Fallout or Skyrim fan.

Starting point is 00:19:51 I'm Todd Mappin. Thanks for listening. See you tomorrow. And from the moment I saw you, boy You said my world was spinning upside down But then I knew

Starting point is 00:20:05 We'd be happy ever after From the start We always knew We'd never be apart

Today in Digital Marketing - Sometimes We Just Stick Our Hand In and Move Stuff Around

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