20 Years of Google Ads: An Agency’s Perspective
On October 23, 2020, Google Ads celebrated its twentieth anniversary. Back in 2000, AdWords (as it was then called) was initially offered only to 350 advertisers, who would pay the platform monthly to manage their campaigns. Now, Google Ads is an advertising giant with extensive self-service capabilities powered by machine learning and AI. In 2019, Google Ads generated more than $135 billion in revenue.
Image from Statista
As an agency that uses various Google Ads products on a daily basis, we wanted to explore some of the major changes that the platform introduced in the past few years, and how they have affected the way we strategize and manage campaigns for our clients.
From Retargeting to Audiences
Until 2015, campaigns on Google Ads could only target site visitors and existing customers through retargeting lists. But to be able to compete with Facebook’s and Twitter’s custom audience capabilities, Google Ads introduced Customer Match in September 2015. Customer Match allowed advertisers to upload a list of email addresses, which could then be matched to signed-in users on Google, to build campaigns tailored to their audiences. Similar Audiences, a feature of Customer Match, made it easier to reach new audiences by targeting users with similar characteristics and interests to existing customers.
Then came along affinity audiences (reaching users based on their interests and habits), in-market audiences (reaching users based on their recent purchase intent), and detailed demographics (reaching users who are likely to be within a particular age range, gender, parental status, or household income). These new targeting capabilities have allowed advertisers to target audiences more effectively than ever before.
We have found in-market audiences to be very useful for our clients’ campaigns, because they allow us to target customers when they are actually looking for a product. For example, a Mother’s Day Gift audience allows advertisers to target customers looking to buy a gift for their mothers and advertise products that could be a good fit.
Close Variants Integrated into Keywords
Originally, Google Search ad campaigns had been based on exact match and phrase match keywords, i.e., ads would be served when queries included an exact match. For example, if the phrase was “girls clothes”, ads would only be served for searches including this exact phrase, but not for misspellings (“girls cloths”) or similar terms (“girls clothing”). However, advertisers had the option to include close variants like those above if they wished to do so.
But in 2014, this became no longer optional as Google Ads required all campaigns to use close variants. In 2017 this expanded to include word order and function words. Exact match keywords could trigger ads using different function words or word order (e.g., “clothes girls”). In 2019, Google Ads also added paraphrases and implied words, so that keywords could also be matched to queries based on having the same intent (e.g., the phrase “lawn mowing service” would come up as a match for the query “grass cutting service”).
Image from Search Engine Land
These changes meant that advertisers had to completely rethink their campaign strategies, from managing keywords to structuring ad groups.
For us, these changes have helped us across all our clients’ campaigns, because people’s searches change daily. Each year, Google sees 16–20 percent of searches that are new, i.e., have never been searched before. Close variants have allowed us to work smarter and pick up on the intent of the users, and not be limited to the exact phrase they used.
Automation of Campaigns
While automation was available to some elements of campaigns before, in 2018 Google Ads rolled out full automation capabilities encompassing creative, bidding and targeting. This included adding automated Local campaigns (where ads are generated automatically based on location extensions and existing creative), Responsive Search ads (where Google automatically generates combinations of headlines and descriptions and serves the one closest to the user’s query), and Smart Shopping campaigns (where ad delivery is optimized to achieve the conversion goal value defined by the advertiser, such as return on ad spend).
Automation has also gone on to expand the surfaces on which ads are shown. For almost every campaign type, ads are now run automatically across multiple channels. For example, Smart campaigns run across Search, Display and Google Maps; and Discovery can run across the Discover feed, the YouTube home feed, and On Gmail’s social tab and promotions tab. While campaign automation has its advantages, we find that it gives us less control and visibility into who is being targeted and where.
Policies Updated to Avoid Misrepresentation, Improve Inclusivity
In the past few months, Google’s extensive updates to its advertising policies have been hard to miss, with many advertisers encountering a higher proportion of disapproved ads and paused campaigns than usual.
The recent updates to policies have been around the following themes:
- Identification verification — Google has started requiring from advertisers to provide documentation of their identity and geographic location.
- Misrepresentation — Google no longer allows running “clickbait ads”, i.e., ads with sensationalized text and images that try to influence the user to click through to discover their context.
- Inclusivity — Google has introduced new targeting restrictions for ads for housing, employment, and credit products and services. Targeting for these ads can no longer be based on age, gender, marital status, parental status or ZIP code. The purpose of these restrictions is to make ads more inclusive to users who are disproportionately affected by societal biases.
Image from Google
The tumultuous global climate in 2020 has is likely one factor that has propelled these changes. The COVID-19 pandemic, anti-racism protests, and a highly sensationalized US presidential campaign, have all led to a barrage of misinformation online, with some advertisers joining in. Another factor is the legal crackdowns on Facebook in recent years for allowing advertisers to run discriminatory housing, employment and credit ads by excluding minorities, women and seniors. Facebook has since also updated its advertising policies to address this issue.
One of our clients, a real estate company, is currently being affected by this change. Previously, many of our audiences for this client were restricting some age groups that are less likely to convert. Since we cannot target audiences by age anymore, we are no longer able to reach the types of customers we were reaching before without increasing our Target CPA (cost per action). We must now target all age ranges, which is diluting our audience and will result in our client spending more on every conversion.
Google has made these policy changes for a good reason, and we support these decisions. But the policy changes mean it is now more challenging to target audiences for certain industries, and advertisers must find new and creative ways to overcome these challenges.
What will Google Ads’ 25th anniversary bring?
Google Ads is an ever-evolving platform, and its new capabilities and ones that are currently being developed will no doubt bring many new changes over the next few years. In five years, the online advertising landscape could look completely different. We can’t wait to see what happens next!
