Google axes close variants option: what it means for advertisers
Published: August 14, 2014
Author: Jay Stampfl
The recent news of Google automatically opting all KWs into close variants is the latest AdWords change that will touch the majority of advertisers. So what are we are really looking at, what issues does it present, and how do we solve them?
What it means to lose the option to opt out of close variants
In the past, Google offered the ability to either opt in or out of close variant matching. We are talking about misspellings, synonyms, and plural/singular variants.
Take, for example, the KW [apple]; with close variant turned on, we will see the KW matched to queries like “apples” and “applees.” Now that close variant is turned on automatically, and we can’t opt out. Everyone is used to having broad and phrase match KWs mapping to a number of unique queries, but now even exact match KWs are going to have multiple queries rolled into them.
This has consequences for all advertisers, as we can no longer give a specific creative and bid per query. If there is a different value per click between something like [Cheap Shirts] and [Cheap Shirt], you would want to have two different bids to reflect those two values. Hypothetically, you might orient the [cheap shirts] messaging more toward large purchases, or perhaps you would use a promotion that captures some small nuance of consumer behavior. At the very least you would probably want to customize the ads to show query in the headline of the ad. When multiple queries are rolled up to the same exact match KW, we can no longer make those distinctions.
The worst-case scenario affects advertisers with a number of closely related exact match KWs with a range of different bids. If you have 2 exact KWs with respective returns of 2 and 6, you will end up with one KW with an aggregated ROAS around 4. What is going to be the correct bid for that KW? Any bid you put on that query will be incorrect for those auctions.
When the switch happens, you’ll see a number of different queries moving mainly toward the highest bid, and CPCs will inflate—this is obviously good for Google. On a macro level, I expect that auctions will become more competitive in the short term, but I do expect a new equilibrium to emerge as marketers start adjusting bids and optimizing account structure. Since exact match KWs will now aggregate multiple queries, the main question is: how do we avoid incorrect bids?
One solution and one big unknown
Here’s a tedious and imperfect solution to controlling your bids: you can still use ad group negatives to funnel queries. Of course, if you have a long, exhaustive list of exact KWs, adding these negatives will be a manual and error-prone process.
And here’s the unknown: we still don’t know how exactly Google is going to be matching query to KW. For the query “Cheap shirt,” will it be more likely to match to the KW [cheap shirt] even if [cheap shirts] has a higher CPC? The ad rank of the two KWs will compete against each other. For now, the winner is unclear.
Keep on monitoring those search query reports! If you see the distributions of your queries changing, you are probably going to have to optimize your account structure.
On the highest level, I resent any controls being taken away from us. But maybe that’s the cynical view. Maybe this will just simplfy KW lists and make management easier. We’re still waiting for proof of those terrible Enhanced Campaigns ramifications, after all.
What are your impressions of this change?