If you haven’t yet looked at Netflix as an outlet for your advertising budgets, you soon will.

Even if you haven’t, that the video-on-demand streaming platform is venturing ever deeper into ads as a revenue source won’t be news. If you have an individual or household subscription, you may well have been alerted to a change in your service, with Netflix switching you from your current, ad-free plan to a cheaper tier that will include commercial breaks.

As a marketer, that should have screamed opportunity, or at the very least it will have got you asking questions.

Netflix answered many of those at Upfront 2024, the company’s second presentation to current and potential advertisers. The event left us with little doubt about how far they’ve come and how much further they intend to go.

End-to-End is the New Black for Netflix

The company already creates the content and owns the infrastructure on which it appears. Next up is the ad tech and sales side. This will allow it to provide a bespoke offering to those in our business, including ad commissioning, formatting, and targeting, all under one roof.

Netflix is already a player. In the next year (or two, or less) they intend to become a serious one.

Netflix’s Numbers are Impressive

A reported 40 million subscribers are now on the ad-supported plan. In those markets where the tier has already been rolled out, 40% of new sign-ups are plumping for the ad-added option.

Apparently over 50% of advertised-to viewers watch more than 20 hours per month. That’s a handy little figure for those holding the purse strings to have in their pockets.

Netflix Going after Google?

Perhaps not yet. Or at least not directly

The media giant has committed to competing for a greater share of your brand’s marketing budget. At this, however, stage its sights seem set on legacy media, rather than the Mountain View behemoth.

The supplementary Upfront material mentions “linear TV” several times, pointing out how favorably its own audiences compare.

Netflix viewers are supposedly twice as likely to respond to advertising, have a higher attention span, and have a higher household income than those taking their TV via the traditional format.

And in the near-to-medium term Google is going to be more of an ally than an opponent. This was their announcement:

What that means is from this summer you will be able to purchase Netflix inventory via Google’s Display & Video 360 programmatic platforms. Other buying options will include The Trade Desk and Magnite, all of whom join Netflix’s primary programmatic partner, Microsoft.

Bigger Things on the Horizon

Less loudly trumpeted by Google is that Netflix does not intend to outsource its advertising tech for long. It will be launching its own platform by the end of next year.

“Bringing our ad tech in-house will allow us to power the ads plan with the same level of excellence that’s made Netflix the leader in streaming technology today,” said Amy Reinhard, Netflix President of Advertising.

“We’re being incredibly strategic about how we present ads,” she continued, “because we want our members to have a phenomenal experience. We conduct deep consumer research to make sure we stay ahead of the competition, bringing opportunities that are better for members and better for brands.”

Netflix might not be part of your plans, but you’re very much part of their theirs.

If you’re like the majority of Google Ads advertisers, you’re running Performance Max campaigns. You’re also likely wasting a ton of money on it. Google makes it challenging to exclude branded keywords from Performance Max, while claiming the brand terms that do show up in these campaigns are incremental.

At our PPC agency, Taikun, where we manage tens of millions in Google ad spend per year, we have not seen this proposition supported by evidence. In fact we have found time and again that keeping branded terms live in PMax gives Google a license to waste your money.

Is Brand Search Incremental?

Before diving into the specifics of how including brand in PMax wastes money, it is important to discuss whether brand spend ever drives incremental revenue

Geo lift tests we have conducted on brand spend, within both shopping and search, with a number of brands, have found in each case that ad spend was found to be completely non incremental. That is, it generated no additional (net) revenue. This is supported by other companies which have seen similar results. 

Despite the lack of incrementality, there are situations where spending on brand makes sense. For example: To deter competitors or retail partners from bidding on your terms; product or service segmentation that meaningfully benefits from better control of landing pages; and when brand terms overlap with nonbrand searches.

Whether any of the above apply or not, it’s important to remember that when running brand there’s no guarantee it will drive incremental sales. If you have the volume to run a geo lift test, it’s recommended.

Understanding how the sausage is made

Regardless of whether running brand on search or shopping is incremental for your business, there’s one way to ensure it will negatively impact your incremental volume: running it in PMax. 

PMax gives you access to Google’s entire ad inventory. It promises to use machine learning to maximize your overall performance across Google’s entire ecosystem. This sounds great in theory. In reality, PMax is a way for Google to sell remnant inventory that you would not intentionally target because of its low quality. That poor performance can be hidden with spend against extremely high intent and high performing brand volume.

For example, if 10% of your spend goes to brand at a 20x ROAS and the other 90% goes to everything else at a 0.5x ROAS, your blend is a 2.45x. Performance looks good on the blend, but in reality you’re incinerating 90% of your ad budget.

This is not a theoretical example. We have seen this play out with varying degrees of severity in every PMax campaign we’ve looked at where brand was combined with nonbrand:

You need to force PMax to work for its conversions. To do that you need to strip brand out completely.

How to Tell if Brand PMax is Wasting Your Budget

You can take a look at your own PMax campaigns and quickly determine if you’re wasting money on brand. If your PMax is performing at a better rate than other nonbrand volume in your account or your meta prospecting, you’re probably running a lot of brand. Likewise, if your campaign is consistently performing above the target, it is a dead giveaway there’s brand in there. Finally, if CPCs are lower than the rest of the account, brand is a likely culprit. 

You can also do a rough calculation of how much brand is generating witin the campaign. The insights report of PMax provides data on the search categories that are driving conversions. Add up all the conversions that are credited to search categories with brand terms and compare that to the overall campaign conversion volume. This will give you a rough idea of the percentage of conversions in the campaign being driven by brand. 

If it’s more than 30% of the overall conversions, you’re absolutely burning money and you should pull it out of PMax. 

Structuring Brand Outside PMax

Removing brand from PMax is annoying but not overly onerous. The first step is requesting Google adds a negative keyword list to your PMax campaign. Here is the form that includes a template to send in the name of your brand terms or dedicated PMax negative keyword list. This allows you to add negative keywords to your PMax campaign.

Note: The brand exclusions structure doesn’t do as good a job of excluding brand terms as a negative keyword list. 

Next, you need to set up a brand search campaign on either target impression share, or a manual bidding strategy. Smart bidding is a bad fit for brand search for the same reason we exclude it from PMax: it allows Google to waste money.

The goal with your brand search campaign should be to maximize the delta in real dollars between your spend and revenue generated.

If you’re managing an ecommerce brand, there’s one more campaign that needs to be set up (if you don’t already have one): A branded shopping campaign. A standard shopping campaign with a ROAS target that’s double your nonbrand target will ensure you’re capturing branded shopping inventory as well.

Adjust this target as necessary. Almost no nonbrand will make it into this campaign because PMax takes precedence over standard shopping.

With brand out of PMax, you’ll see volume on that campaign decline substantially as well as performance. Your overall account performance should increase substantially as well.

A Final Note on Google

The advertiser relationship with Google is currently broken. The Google antitrust trial has exposed what many of us in the PPC community have known for years: Google is squeezing advertisers to juice their own profits.

Whenever Google makes changes or encourages advertisers to do things, remember the relationship and ask yourself: “How would this benefit Google?”

Similar to last year, Google Marketing Live provided a torrent of AI-fueled advances for advertisers. In all, nine presenters announced 30 products and features over the 90-minute keynote event.

In the upcoming days and weeks, we’ll examine each of these new products and features in-depth and share what marketers and advertising experts think of them as they roll out.

But for now, here’s a quick recap of the most important announcements from Google Marketing Live 2024.

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8 biggest takeaways from Google Marketing Live 2024

The GML keynote was a fast and furious hour and a half. Here are the biggest announcements from the event.

1. Automatic ad placements in AI overviews

Just last week at Google I/O, Google announced the wider release of AI overviews in search results (formerly known as SGE or search generative experience). Now, Google is testing automatically placed Search, PMax, and Shopping ads in AI Overview boxes.

The ads will show up in a block labeled “Sponsored” to separate them from the organic and AI-derived content.

These ads will show up automatically when they match the intent of both the query and the AI Overview; advertisers don’t need to take any action to target those placements.

2. AI-powered, personalized recommendations and advice

In another experiment, Google is using AI to speed along shoppers’ decision-making process for large or complicated purchases by offering personalized product recommendations.

Google used the example of someone shopping for storage space.

The user would search for “short-term storage” and click on a relevant ad. They would then enter a guided shopping experience where they could answer questions and provide a photo of what they wanted to store.

Google’s AI reviews the details and suggests the right-size storage unit and related items like packing materials. The user then clicks through to a product page on the business’s website to finalize their purchase.

This ad feature is currently in the testing phase. If it’s successful, it will soon be available to other verticals.

3. AI creative asset production for PMax campaigns

Google announced more features and tools to help advertisers create PMax campaign assets faster and at scale. These new features include:

• The ability to add brand guidelines for colors, fonts, and imagery.
• Image editing is used to add and extend backgrounds, add objects, and alter image sizes to fit multiple ad placements (think of adding a plant and expanding the wall for a furniture ad).
• Auto-generation of ads from a product feed.
• Asset-level conversion metrics.

4. AI-enhanced Shopping Ads

Shopping Ads got another layer of AI treatment with several upgrades to create a more immersive shopping experience.

Virtual try-on for apparel

Google is expanding its virtual try-on (VTO) experience to apparel ads. Beginning with men’s and women’s tops, users will be able to see how individual styles look on different body types.

3D product images

Using Adidas brand sneakers as an example, Google showed off new 360-degree shoe views that can be featured in ads. Google generates the 3D images using images provided by the seller.

In-ad, short-form product videos

Advertisers can now incorporate short product videos—created by the brand or by influencers—into ads. The videos will be clickable and interactive, letting shoppers view related products and get styling suggestions.

The ads will include product details under each video.

5. New visually immersive ad formats and features

Google shared that it’s expanding its demand-gen video ad campaigns by adding new options for advertisers. These features include:

• Clickable stickers created from existing image assets.
• The ability for users to swipe left to a branded YouTube landing page.
• AI-generated animations based on static images.

6. Cohesive first-party data management

In a move to improve the quality of data used to guide AI outputs, Google announced that its Ads Data Manager platform is coming out of beta testing and is now widely available.



Ads Data Manager lets advertisers aggregate first-party data from sources like YouTube, Google Ads, HubSpot, and Shopify to make it more visible and actionable. The platform also acts as a “check engine light” to help make sure marketers are using data safely and responsibly.

7. Visual brand profiles on search

Sellers can now create a brand profile for Search, including branded imagery, product deals, videos, and more.

Brand profiles will also include reviews pulled from Product Listing Ads. It remains to be seen how much control advertisers have over which reviews are shown.

8. New profit optimization goals in PMax

Advertisers will be able to optimize ads for profit goals in Performance Max campaigns.

Google says advertisers using the new profit goals saw a 15% uplift in campaign profit compared to revenue-only goals.

What we didn’t see at Google Marketing Live 2024

There was a lot for advertisers to be excited about in this year’s GML keynote, but a couple of topics stood out by their absence.

No B2B-specific products or features

Once again, the 90-minute Google Marketing Live session focused on the rollout of products designed to help business-to-consumer brands generate more return from their Google Ads investments.

There wasn’t a single mention of a B2B company, example, or use case. For obvious reasons, we’d have loved to see some.

No (or too few) small-business case studies

By number, the vast majority of advertisers on Google are small businesses. Yet just about every example, case study, and customer story featured big brands using Google’s newest features to attract new customers.

Additionally, the majority of example use cases for the new features announced at Google Marketing Live 2024 were for travel and ecommerce–industries that typically thrive in the search ads environment. Meanwhile, the typical small business wouldn’t be able to reap the same benefits from these new features.

“Google Ads and YouTube ads for well-established brands should work. If it didn’t, it would be alarming. Show me a local business with impressive stats,” tweeted Julie Bacchini, President of Neptune Moon and Managing Director of PPCChat.



Source

Our hope is that Google will use AI to make advertising easier for smaller businesses with smaller budgets.

What it all means

We’ll dig deeper into all these announcements and new AI features in an upcoming post, but for now, the takeaway is clear: Google is investing heavily in AI across the board. We get the feeling that not all users are quite as excited about AI as Google is, and regardless, there are bound to be some hiccups, as with any new technology. But we’ll be here to help you all navigate the changes.