Drive and Convert – Ep. 6: PPC Automation

Will using PPC automation tools hurt your brand in the long-term? Find out in the sixth episode of the Drive and Convert podcast.

In this episode of Drive and Convert, Ryan explores whether you should or shouldn’t use PPC automation tools to assist you in your paid search efforts. The answer isn’t so simple.

Transcript:

Jon:
All right, Ryan. Today we’re going to talk about PPC automation, or pay-per-click automation. Now Ryan, I’ve been hearing a lot about pay-per-click automation tools. Now, this is mainly with brands who are doing one of two things. I see it when they’re either trying to save a dollar by not working with an agency, and they think, “Hey, automation can help me do all of these things that my pay-per-click agency is doing for me.” Or, they’re just trying to scale their traffic up extremely quickly, and they see automation as the holy grail of them being able to do that. So, I’m really excited to learn about this, because I keep hearing about it, but I don’t know much about it, and so I’m happy to have an expert to discuss this with. So let’s just start by defining what PPC automation is exactly.

Ryan:
It’s a big topic, and PPC automation can mean so many different things to different people. But high level, it generally means not touching certain pieces of an account, and having some type of computer system make decisions for you, within the Google or Microsoft Ads space, and it’s even going into the social world as well. But basically, something gets done without a human touching it. Whatever that looks like, it’s from high level computers.

Jon:
So, it’s not an all or nothing. Because I was just looking at this as an all or nothing, like you’re either using automation to run your PPC, or you’re not. But you’re telling me that just having some automation built in can actually be beneficial, as opposed to just going full automation.

Ryan:
Yeah. And there’s different thoughts on that, just like everything online, even in CRO, I’m sure that it has to do with… Everybody’s got an opinion, and it’s different than everybody else’s, on what works or what doesn’t. It’s based on their experiences or what they’ve seen, or what they’ve been told. And so, you’ve got extremes, where Google Smart Campaigns are an automation in Google Shopping, that will literally do everything. All you do is give it a budget, and what your return on ad spend wants to be, and it goes and does that. If it can be accomplished in the system, it will do it. If your return on ad spend goal was too high, for example, it’s just going to sit there, and not really spend any money. If it’s really low, it’s going to spend a lot more money, and get you a lot more clients because the potential’s there.

Jon:
So you’re telling me automation can’t solve all of my hopes and dreams.

Ryan:
I wish it could. There’s some people that will promise you that, for sure, but if anybody is telling you that, they are lying, or they have an ulterior motive in place for you and your business. And on the other side, there are ways to use automation that help but don’t necessarily do even the work in place of a human doing the work. And, as with most things, and my most common answer, which is also my least favorite answer in questions about digital marketing, is, it depends. Where should your business lie in that space around automation, specifically in the PPC realm? It’s going to depend on where your business is at in the life cycle, what you’re able to afford as far as agency or humans doing work, and what are the long-term goals of the business, or what are you trying to accomplish?

Ryan:
And so, let me take it in a few phases I guess, in kind of explaining what I believe in automation. You’ve got the full automation, where you’re just going to either use a tool, or, for most businesses, use Google’s Smart Campaigns in the e-commerce world to spend money for you in Google. I think in some spaces it does make sense, but it also comes with a very large asterisk, where you’re having Google do all of this work for you to grow your business, but Google’s goals, generally speaking, are different than yours. As a big, publicly traded company, they have responsibilities to their shareholders to grow their revenues and profits, just like you as a business owner have a responsibility to yourself or to your employees to grow revenues and profits. So for most businesses, Smart Campaigns and full automation in Google is not my recommendation, and it is mainly around understanding what’s going on in your account and the ability to really scale.

Ryan:
But small advertisers, just starting up, you’ve never spent before, you really want to see if your business online has some legs to it if you start spending money, I do think Smart Campaigns within the Google space do have a place to play in that. And if I had to put a line in the sand, probably somewhere around $500 or less a month in ad spend to kind of prove a model. My wife, for example, would make me prove something to her before we actually jumped with both feet into a business and say, “Yeah, let’s throw a bunch of money at it, and really see if it works.” She’d say, “All right, let’s kind of see what happens if you just kind of let Google do something on the side here to see what happens with 500 bucks over a couple months, 500 a month for a couple months.” I think there’s something there.

Ryan:
On the other spectrum, no automation, where you are 100% customized, doing everything either with an employee or an agency internally running an account on Google and Microsoft. That has a place to play, and I think that pool of companies where that makes sense is probably in more of a mid-tier type business model where you’re spending a few thousand a month, maybe as high as 10,000 a month, where you’re really just one person doing all the work for you, and you can do a lot of customization, because generally when you’re at that spend level, you’re not the biggest, you’re not the smallest, but you’re having to compete with some of those biggest, and you need some of that kind of surgical precision to find those specific keywords, or specific searches for specific products that really makes sense for your company, and you’ve seen the conversion rates that work.

Ryan:
And then, the vast majority of businesses fall kind of in the middle, where you do need some automation, and you do need some human strategy and somebody else, and some humans touching the account as well. And so, focusing on the middle is where it gets most complicated. So, for the majority of businesses out there, it’s how much, or what parts of the account really make sense there. Is it an internal employee with some automation? Is it an agency using humans, and some automation? And what goes first? Is it the automation first, with a human checking on it, and making sure it’s working? That’s going to be a broad spectrum within the space.

Jon:
So, I’m hearing that it makes sense to prove out a business. So, prove out a new product perhaps, somewhere where you’re just going to spend a little bit of money, and you want to start and see if there’s a good product market fit there. And if so, then it would make sense to expand beyond just automation. But it does have its use cases, which is great to hear. So, okay. So, you’ve talked a lot about, there’s three tiers to be thinking about, right? And that that kind of messy middle is where “it depends” is usually the answer, which makes sense. So, let’s talk about some tools around this. What are the benefits to using pay-per-click automation tools? You mentioned one of them being to prove out a marketplace, but in terms of the tools themselves, can you talk a little bit about what the automation does in that sense?

Ryan:
Yeah, so there’s a lot of different areas of PPC that you can actually automate. And a lot of PPC automation came about, let’s say maybe 10 years ago it really started to get some traction, around bid management, and having some computer system actually automate the bid changes in the account, because it does get mundane. It does become difficult, in the middle of the night, for example, or around the clock, to be making changes in an account when you actually have humans working your account need some sleep. And so, bid management was really the beginning of the space. And so, that’s constantly there. It’s still there. Google even has automations built into their platform now around bids. They have enhanced CPC, which I believe, Jon, you had some fun with that setting when Google changed some settings around that. I believe you spent upwards of $200 per click on Google when we looked at your account together.

Jon:
Yes. That’s where automation became dangerous. And again, I know nothing about this, right? And so, I thought, “Hey, I’ll let Google handle it,” and I clicked the box, and then ended up spending a lot of money.

Ryan:
Yep. Oops. And that, it happens. It’s not, obviously, what happens all the time. But when automated systems get… be doing what they’re told, I mean, they have to still have input from a human, they can do things that maybe aren’t intended, and that is really the big thing you have to be aware of in using automation. They’re really as good as the inputs you’re giving them, or the person designing the algorithm. And so, heavy trading algorithms are really impacting stock markets all over. And so, big drops, big swings up and down can happen because of automation. So, you just need to be coming in with some concern or just awareness that that can happen, so you’re watching it, no matter what level of automation you’re using.

Ryan:
But there’s bid management, there is automated campaign management. In fact, one of my competitors that’s been around for even longer than us, and they actually have a really good name in the marketplace, they built some automated systems to take search queries that converted and build them into ad groups automatically, because that became some of the more mundane time-draining things that were happening, when you’d see a search for this specific product that you hadn’t seen before, you’re like, “Oh, that converted, that’s great, let’s make sure there’s not more of that out there. Let’s build a specific ad group for that search and capture all of it.” Great strategies. And so, the main argument that a lot of agencies that are using automation and automated systems that are helping internal employees and agencies scale is you can spend more time strategizing on growth and let these automated systems do a lot of the stuff that are just sucking time away from maybe the things that are more mundane and you don’t need to be spending high-powered talent on doing those things. Very logical. I mean, there’s no scenario in which that sounds like a terrible idea.

Ryan:
What’s happened with that, that I’ve seen over the last 10 years, is a lot of agencies have adopted this automation, and it’s allowed for tremendous amounts of scale, without having to develop a bunch of humans to understand what’s going on, or to know how to communicate with clients, which is in no way bad. But what’s happening is as this scale is happening at a lot of agencies that I’m seeing their accounts is they’re losing their touch with what’s going on, and then how to strategize for actual growth because this tool is doing so much of the work, that they can’t go in and say, this client may say, “I really want to start doing this,” or, “I want to move my return on ad spend goal to this,” or, “Should I be breaking into this market?” And because these tools are doing so much of the work, that question isn’t as easily answered as if by somebody that was actually in the account all the time that saw the search queries, that was doing negative keyword reports, that was doing all these wonderful things, and bid management, that could actually respond very quickly and say, “Oh, here’s what you need to be considering as a business owner or your marketing team when looking at this question.”

Ryan:
And so, that’s been one of my big concerns. I think about stupid, stupid movie, but Idiocracy, where you’ve got a guy that’s been dead for so long, comes back and everybody’s really dumb, and he was not smart back when he lived, but everybody got so much dumber because of automation and the world doing everything for them. I worry about that. I don’t think it’s happening across the board at agencies or internal teams, but I really have a lot of respect for groups of people, or agencies that have to be in the account regularly, and I see a lot better results, generally speaking, when somebody’s in a Google Ads or Microsoft account making the changes, because they’re seeing in real time what’s happening in the market, and they have to have a lens where they’re looking at things through and say, “Why is this happening? I have to go solve this problem or understand it a little bit more.” Whereas, if a tool’s doing all the work, they don’t have to try to get in there and understand what’s happening, or what is the competitor doing that’s causing this to happen in this account.

Jon:
I heard you talk a lot about search and search ads and Google and, okay, so Google has some automation. Does Bing have automation? Microsoft Ads.

Ryan:
They do have some, and it’s not as old as Google. So, I can’t say that it works as good or has as many advancements because I also don’t look under the hood and I don’t understand all the engineers and what they’re doing. Microsoft obviously has some very smart people and they’re doing some great things in there. So, a lot of the same things you see in Google, Microsoft Ads also has a lot of that capability for automation, and I would use a lot of the same automation the same way depending on where you are in the business cycle and what is needed in your business.

Jon:
Okay. Now, what about social channels, because that falls under pay-per-click for me, right?

Ryan:
Yep.

Jon:
So, what about things like LinkedIn, Facebook, Instagram, Twitter? Is there automation built into those platforms?

Ryan:
There is some level of automation built into almost every platform, and I look at it almost the same no matter who or what platform it’s on. It’s an old example, but it still rings true. I wouldn’t give all my taxes to the IRS to have them do them for me and tell me how much I owe them. We’re diametrically opposed to what should be happening in that scenario.

Jon:
Right, success is different for each of you, right?

Ryan:
Exactly.

Jon:
Okay.

Ryan:
Exactly. So, if Facebook is doing everything for me and I’m just giving them a credit card and hoping that it does well, there is a piece of Facebook that wants me to succeed, but Facebook’s success is more important to Facebook than my business succeeding. They know that if my business fails, another one’s going to come up. Same with Google, same with Microsoft, same with LinkedIn. It’s all the same. So, I, having been in this for a decade, I step a little bit away from automation whenever possible and I say, “Okay, how can I understand this better? How can I try to beat what the automation is doing?” Because what I’ve seen a lot of times with the engineers that build automated tools, way smarter than I am, as far as coding, math. I mean, it’s not even close. But we’re coming up with a strategy of maybe why this should be bid up or bid down, or maybe why this keyword should or should not be in the account.

Ryan:
I’ve still seen the humans making better decisions on that, and I think the machines and the AI is a very popular term. Artificial intelligence, everybody wants to be able to say that they do have a lot of that in their agency or in their organization, because it sounds really good. Like, “I’ve got this artificial intelligence that’s really pushing growth and doing a lot of my thinking for me.” Again, not bad at all, and I actually recommend businesses step into that space to understand it more and to use it where it’s appropriate. But I still think when you have human searching and the change is constantly happening, we know that something like 15% of all searches done on Google every 90 days have never been done before. So, what is an artificial intelligence going to do with a search term that’s never been done before? It can gain some insights possibly, but as we’re blending in search query reports now voice search with text search, like, I type it into my computer or I search for it on Alexa or Google Home. There’s a lot of different intent behind that. I’ve seen better results from humans looking through that and being able to filter it.

Jon:
Right, right. Especially working with natural language and understanding the intent behind what people are searching versus just what they say, right?

Ryan:
Yeah. Yep.

Jon:
Okay.

Ryan:
And so, yes, companies need to be looking at automation and considering the opportunities available, and then how is that going to compliment what they currently are doing? I don’t ever look at, long-term, replacing humans… I mean, again, in the next five years that will be my long-term view. You can’t predict anything in the digital space beyond five years, and really, anything longer than a year is, you’re throwing darts at a dartboard way far away. But I don’t foresee any time soon where I would be comfortable with my money on full automation, no human looking into that or doing it, or having a serious play within that space. I spend a decent amount of my own money on all these platforms, and I see the automation. I know the biggest players in the space. I mean, if you’re in the PPC world, Marin, Kenshoo, Adobe, Acquisio. Probably hundreds of others that are doing the same thing in bid automation, in addition to Google and Microsoft, including Facebook will do some bid automation based on goals. There’s no shortage of those. There’s no shortage of very, very smart people working to create the next best automation.

Jon:
I think you made a good point earlier, and that’s something I think you just touched on right now even, but it’s in the favor when you do bid automation of Facebook or whoever to have that bid go up and up and up, right? So, automating means that escalation seems to happen more quickly. Is that not true?

Ryan:
Yeah, I mean, we saw it in your account, right? Where you were averaging in your business $20 a click, which is reasonable, based on how you spend money and the returns you get. But then all of a sudden, if everybody is on automation and everybody’s using Google’s automation on Google, how does Google know who’s going to win? Does Google play, you know, make it socialist where everybody gets 5% because there’s 20 people advertising, so we’re going to even it out and make everybody little? How do you grow beyond that? And that’s where logic comes into my side and says, okay, we can’t all be on automation or there’s just, there’s no win. There’s only so many ways you can look at moving bids up or down, for example. They can only move up and down, they can’t move sideways, they can’t move diagonal. And so, it’s understanding more about the user as we add layers in from a remarking perspective, from an RLSA perspective. The more information we have about this user allows us to get more aggressive or less aggressive than maybe a competitor that doesn’t have that information.

Ryan:
And so, all of these layers we add on add complexity and give opportunity to people that have that data. So data is actually probably, in my opinion, more valuable than some automations. The more data layers you can get, and you can get lost in data, so don’t get me wrong, the idea that “Oh, big data, all you need to do is look in all these thousands of Excel sheets to figure out where that one specific customer is that you want and go find them and bid on them.” It’s more about using that as you’re making adjustments and using the understanding and strategy behind why you may or may not be making this move.

Ryan:
It’s fascinating, when I look at all the people I’ve hired in the digital marketing space and the people that have really succeeded on the backend of making the moves in an account. It’s really, from a human perspective, becoming an art form in how you look at a Google Ads account, and you’re kind of, I joke with the guys and girls on the team, or ladies on the team, that it’s kind of like the Matrix, where you’re looking at just all of these digits flying around. And the really good paid search account managers in the account really see it in a much different light than somebody like myself that would go in and say, “Yeah, okay, I see it says $200 and it says conversion.” They’re seeing all these different layers because of their experience. I mean, some of our people have been doing this for over a decade, 15 years actually, in the accounts, doing it, and they’re so efficient and so crazy of what they can do.

Ryan:
And we’ve matched that up with people that are very good at gaming, like, the strategy piece of gaming. And so, really, we’re looking at almost the gamification of digital marketing, where we’re looking at these and saying, “All right, you’re trying to beat these other advertisers.” I’m a hyper competitive individual, as you know, and you’re pretty darn competitive as well, in your basketball and marketing world. I want to win. And we find people that really want to win, and then they add their ability to see all of these moving pieces and saying, “Hey, if that competitor of our client goes out of business, that’s unfortunate for that company, but it’s really good for us and our client.”

Ryan:
It becomes fun but also interesting in how you’re taking that human that is really good at paid search management, and what we’re trying to do is kind of make, right now my best analogy is kind of the Terminators. How are we using technology and bolting it on to them to make them more effective at what they do? Rather than replacing it, how do we give them things they can look through with weird glasses or things they can add onto their mice? What are we doing to make them more efficient as a human, and that’s how we look at technology and automation.

Jon:
So next time I visit Logical Position, I’m going to be interacting with a bunch of cyborgs basically.

Ryan:
I mean, hey, if my vision comes in place. I mean, maybe two years out on that one.

Jon:
Dart board, right? That’s one of the darts.

Ryan:
Yeah, one of the darts. But it’s… I think the best use of PPC automation, personally, and this is my lens I look through and how we’re looking at automation internally at Logical Position is, for the majority of companies in the middle, it’s, how are you supplementing the humans? Instead of replacing them, how are you making them able to do more? So, we use, scripts are a great automation that a lot of people don’t think about. We’re using scripts to say, “All right, this ad group had a hundred impressions by 6:00 AM yesterday and it has zero today. What just happened? Something is broken there. Let’s go in and see that.” Replacing some of that minutia or things that just get really bored or tedious, or we just don’t have the scale of a human in a large account to get to all of those pieces efficiently. How can we say, “All right, I need this to go do that”? Maybe it’s not going to go through the search query reports for us and find all the negative, but it can bubble up some opportunities.

Ryan:
I’ve talked to a phenomenal technology company, Metricstory. If you haven’t checked out Metricstory I think they’re really cool, and they’re really, man, they have some smart engineers. They’re doing some automation where they’re able to bubble up new opportunities based on scraping a Shopping search query report and saying, “Hey, these converted and they’re actually not showing in your text ad or search portion of your account, from a search query perspective. You should put this keyword in there because it’s converting on Shopping.” And it can, based on their algorithm, their really smart algorithm, it can even give you an estimated return on ad spend, saying, “Hey, this keyword we think is going to get this based on ad groups around it.”

Ryan:
So we’re really looking at leveraging some of that in our efficiencies. Say, “Okay, if we have that, can we make this person able to focus more on bids on text ads because we have this filtering a search query report on Shopping?” Or we’re able to find losers in the search query report on the text ad side much quicker than we could if we had to comb through it by hand.

Jon:
Yeah, this is a really interesting point, adding on to what people, the strategy that a human person can bring to this, with a little bit of AI, helps them to push this even further. But you still have to have the insight that somebody is bringing to the table with that experience to really pull out the meaningful changes. And I thought it was really interesting, you said earlier that aligns with this, bids and these automated bid machines, they only can go up and down. They can’t go sideways or diagonal or any other dimension, right? And that’s what a human is able to do.

Ryan:
It’s a frustrating answer, but every company should be looking at kind of a backstop. And then also, if you’re a company that has one person managing your account internally, I always had the worry as an agency of the bus theory, like what if they get hit by a bus? I told my team, nobody could take the public transportation because you can not be hit by a bus. We don’t have enough backups. But in that scenario it’s like, okay, well, who else is going to be aware of that? And it can’t just be an automated system that’s going to be continued going if they evaporated tomorrow, because it’s unencumbered, you know, what’s going on.
Ryan:
So, having some automation helping them, but also documenting things too so that an automation doesn’t need to take all of it, but that another human could come in and replace or augment as well if somebody needs time off or pregnancy or birth or sickness, all these other things that we, at scale, with 750 employees here, we can do that automatically but a lot of companies don’t have that ability. And so, they need probably a little more automation just to protect themselves but also ensure that there are some humans looking at things.

Jon:
Well Ryan, this has been extremely educational for me. Thank you for sharing all the knowledge around this. I am really looking forward to the day that I walk into Logical Position and I’m interacting with some cyborgs and then having you bring that skillset over to The Good so that we can continue to do the same on the conversion side.

Ryan:
Oh yeah. That looks fun, huh?

Jon:
Yes. Awesome. Well, thank you so much for educating me today. Really looking forward to not spending $200 unnecessarily on my own ads by checking a box for automation in the future. So, thank you for saving me on that earlier on. Any last words on this?

Ryan:
Of course, you can just send me a $200 bottle of wine and it’ll be just the same.

Jon:
Perfect, I know what you like. It’s in the mail.

Ryan:
No, I think it’s good just to always be careful with automation. Don’t assume it’s going to work for you always. Just have smart humans working with you.

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