Google's AdWords Transparency Requirements - Come Into the Light

I have often stated that search marketing is so effective, even a mediocre search program performs very well in an advertiser’s eyes. This is often the case, because when comparing search marketing to more traditional forms of advertising, search many times provides the highest return on investment. It’s because of this fact that some advertisers, search engine marketing agencies (SEMs), and resellers do not continually challenge individual components of a program to optimize discrete media sources and websites to their highest performance potential. Simply put, they stop optimizing when search is better than everything else. Google now wants to prevent that from happening.

Google’s New AdWords Requirements

For those who are unaware, Google announced in July there would be changes in the way third-party partners (SEMs, lead aggregators, and resellers) provide reports and information about their clients’ AdWords campaigns. But the changes are not really changes; they are actually new requirements. In short, SEMs, lead aggregators, and resellers must provide – at a minimum – their clients with the following AdWords campaign insights on a monthly basis:

• AdWords costs
• Clicks
• Impressions

SEMs and resellers can essentially provide this data in any format they choose (whether that be with their reporting interfaces, e-mailed reports, etc.) and have until February 2011 to comply with these new requirements. While Google has yet to announce how it will be monitoring SEMs and resellers’ compliance, the consequences could be that they would lose their ability to provide Google AdWords as an advertiser solution.

Why the Fuss?

Google says it rolled out the requirements because it, “…want[s] to make sure advertisers – whether they work with AdWords directly or not – understand how AdWords is performing for them.” What Google is trying to overcome is advertiser “churn.” Many small and local advertisers that try search marketing do so with the help of a third party, and often times Google is just one part the lead sources used in a given program. Google feels that if third parties were required to report Google’s performance separately, they would reduce churn and increase advertiser retention, since Google leads convert at a higher rate than the other media sources that they’re often bundled with.

Seems logical enough. However, some SEMs, lead aggregators, and resellers fear this move. They feel that by providing their advertisers with greater transparency into their AdWords’ campaign cost elements, advertisers will question the third party’s value, determine its fees to be too high, and jump ship to work with a more transparent third party or in-source their program on their own.

If, as an agency or aggregator, you are unable to prove your value for managing a client’s paid search campaign, there are probably some larger underlying issues going on; like maybe you are really not managing your clients’ search campaigns effectively. That consideration aside, consider this: managing a paid search program takes time, continual monitoring of multiple campaign elements, and ongoing bid optimization to ensure optimal ROI (define).

According to MarketingSherpa’s 2009 Search Marketing Benchmark survey, CPC values tend to be lower on average for campaigns managed by an agency because of agencies’ relationships, volumes, and past experiences. Now that is a good thing.

Shed Some Light or Have the Lights Turned Out

As for those third parties who are not currently providing clients with at least their search campaigns’ costs, clicks, and impressions Google is now mandating, shame on you. Short of not doing your due diligence as an agency, you are neglecting your clients’ requirements. Well over half of companies (worldwide) employing search campaigns list conversion rate as the leading metric for gauging the success of their paid search campaigns, followed closely by sales/leads and ROI (SEMPO, State of Search Engine Marketing 2010). While throwing a mass of generalized reporting data at a client might be sufficient to maintain your assignment, most advertisers are savvy enough today to recognize what they want from their search campaigns. It is up to agencies and third parties to provide advertisers with the clear, concise, and transparent campaign reporting to show them how their requirements are being met.

Going Above and Beyond With Campaign Transparency

So how much light should a SEM or reseller shed on a client’s search campaign (or any campaign, for that matter)? At a minimum, the detailed reporting provided should mimic how you are monitoring and optimizing advertiser campaigns.

Here are some basic paid search campaign setup and management tips to help put you in a position to provide your clients with the kind of campaign visibility they need and deserve:

• Keyword selection: As obvious as it might seem, it’s worth mentioning that PPC allows you to quickly test keywords and then determine their conversion rates. This fundamental campaign building block is often “opaque” to the advertiser as many SEMs and resellers only report at an aggregated program level.
• Individual media property/website performance: Do not rely on managing the overall program performance; question, optimize, and rotate individual media properties and websites to ensure the proper balance of audience reach with cost efficient lead volume.
• Timely optimization of campaign and media spend: Review campaigns at least weekly (daily or hourly depending on category competition/opportunity) and optimize accordingly. Share what works with your clients and, more importantly, what does not work, so we all can learn and not repeat costly past mistakes.

Embrace Transparency – Even if You Are Being Forced to Provide It

Will Google’s new third-party AdWords requirements ultimately make Google look better in the eyes of advertisers? No doubt. But if third parties are managing their clients’ campaigns in ways that best delivers results for those clients, heightened transparency – into Google campaigns among others – will only improve clients’ opinions of their SEMs and aggregators as well. Deliver a client effective results, and everyone gets a little piece of the glory.