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10 Ways to Optimize Your Performance Max Campaigns for Real Results

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10 Ways to Optimize Your Performance Max Campaigns for Real Results

Google Ads’ Performance Max campaigns have generated a fair bit of noise among advertisers since their inception in 2021—from full enthusiasm to staunch opposition and everything in between.

The reality is, if Performance Max is right for your business, it can be a super effective campaign type if you know how to fully leverage it.

Image source

Which is what we’re going to cover in this post. Continue reading to find out:

  • What they are and how they work
  • The pros and cons of Performance Max
  • 10 ways to optimize them to get the highest returns.

What are Performance Max campaigns?

Google’s Performance Max campaigns, also known as PMax, were rolled out in all Google Ads accounts in 2021, making them a fairly new addition. This cross-channel, fully automated Google Ads campaign type allows you to show ads across all of Google’s ad networks in a single campaign, including Search, Display, YouTube, Discover, Maps, and Gmail.

The way these campaigns work is, you first specify your goal. Then, similar to building out a responsive display ad, you provide your assets like images, videos, logos, headlines, descriptions, and more. You can review ad previews to get an idea of how your ads will look. Once you set the campaign live, Google will generate ads across the applicable channels whenever eligible, using machine learning to serve the right ad at the right time with the right bid, to optimize for your goal.

Pros & cons of Performance Max campaigns

Like any campaign type, Performance Max comes with its pros and cons.

PMax pros

  • Full automation means Google does the work for you, but you’re able to steer that automation and performance with the assets and Audience Signals you provide.
  • You can reach new audiences across all of Google’s channels.
  • As goal-based campaigns, they are ideal for ecommerce and lead generation businesses.

PMax cons

  • You need to have full-funnel conversion tracking set up—both because it’s a requirement based on the way the campaign type works, and also in order to assess and optimize your performance.
  • While it can take work off your plate, automation comes with its own pros and cons. You will lack control over many campaign elements that you are normally able to carefully manage with standard Google Ads campaigns, including where ads are shown, creative combinations, keywords, and search queries.
  • PMax campaigns don’t provide insights into remarketed versus new customers or brand versus non-brand, within a campaign.
  • Performance Max campaigns require a wealth of creatives and assets to perform strongly, so you will need plenty to upload in order to get the most out of this campaign type.

10 ways to optimize your Performance Max campaigns

Although automated, there are still a number of ways to optimize your Performance Max campaigns for maximum success. Let’s take a look.

1. Commit to your campaigns

Being fully automated, PMax campaigns require sufficient amounts of data and machine learning to be effective. Be prepared to budget at least $50-100 per day for at least a month. In fact, Google recommends at least 6 weeks to allow the machine learning algorithm to ramp up and have sufficient data to compare performance.

2. Add as many assets as you can

The more assets you add, the better, because it will increase the chances of an ad being eligible to serve across all types of inventory. Note that if you’re using a Merchant Center feed, you don’t need to upload any product images. Instead, go with lifestyle or brand creatives that will complement product feed images.

If you only want to run Google Shopping campaigns, don’t add any assets at all and simply use your feed. This way, your campaign will deliver Shopping ads along with Display and YouTube ads but the latter will both be in Shopping format.

how to optimize performance max campaigns - shopping ads on youtube

3. Know the watchouts & workarounds

We’ve shared a full post on Performance Max dos, don’ts, watchouts, and workarounds, but some of them are worth repeating:

  • Bidding: For bidding strategy, you are limited to either Maximize conversions or Maximize conversion value, which makes sense given Performance Max campaigns are conversion focused.
  • Location settings: Like any other campaign, PMax location settings default to “Presence or interest.” If you only want to reach people in that location, switch to presence only.
  • Audience signals: With PMax campaigns, you don’t choose an exact audience to target. Rather, you provide “Audience Signals” which Google uses as a starting point. It’s similar to optimized targeting.
  • URL expansion: PMax also turns URL expansion on by default. Similar to Dynamic Ads, this feature allows Google Ads to send users to landing pages other than your final URL. If this goes against what you want to achieve, turn this feature off. Or, leave it on but use URL exclusions.

how to optimize performance max campaigns - final url expansion

4. Use the customer acquisition feature

Unique to Performance Max campaigns, this feature allows you to choose whether you want to serve the campaign to new and existing customers, or just new users.

5. Optimize your asset groups

When building a Performance Max campaign, you’ll add all of your assets into an asset group. An asset group is a set of creatives that will be used to create an ad depending on the channel it’s being served on. It’s best practice to organise asset groups by a common theme similar to how you organise your ad groups.

Once the campaign has been built, you can go back and add additional asset groups. Structure them in a way that makes sense for your business, which could mean separating them by products or services that you offer.

how to optimize performance max campaigns - asset groups

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6. Use campaign exclusions

The next PMax optimization strategy is to use campaign exclusions to prevent wasted budget and improve the efficiency of your campaign. This includes:

  • Product exclusions. On average, 17% of products in advertising catalogs are not available for purchase, according to DataFeedWatch’s 2022 Feed Marketing Report. So these items should be the starting point for catalog exclusions.

how to optimize performance max campaigns - datafeedwatch report

It also makes sense to exclude product variations that are relevant for the same search query, products that are not profitable or low margin, and products with a low conversion rate. To achieve this, you can use Listing Groups and exclude these products by Brand, Product ID, Category, Custom Labels, and more.

In addition to improving the efficiency of your campaign, these campaign exclusions will also minimize the number of products that Google will need to put through the learning phase, essentially speeding it up.

  • Keyword exclusions. Use negative keywords to prevent wasted budget on irrelevant queries.
  • Existing customers. As mentioned earlier in this article, you can exclude existing customers so that your Performance Max campaign focuses solely on new customer acquisition. When setting up the campaign, check the box ‘Only bid for new customers.’

7. Choose the right bidding strategy

When launching a new Performance Max campaign, you have two options for bidding:

  • Maximize Conversions to get the highest number of conversions for your budget.
  • Maximize Conversion Value to get the highest value conversions. You may get fewer conversions with this bid strategy, but the idea is they are worth more.

Once your campaign has a sufficient amount of conversion data, you can experiment with either Maximize Conversions with Target CPA or Maximize Conversion Value with Target ROAS bid strategies in order to take your campaign to the next level.

target roas option in the max conversion value bidding strategy in google ads

You do have the option to use Target CPA or Target ROAS from the get-go but it is a best practice to first gather all important conversion data when launching a new campaign.

8. Use ad extensions

Google Ads extensions (now called assets) allow you to increase your ad real estate and increase its relevance and attractiveness with additional information.

There are 14 ad extensions in total—reviews, locations, call, pricing, promotion, and more—but you should always consider using the following:

  • Sitelinks: These highlight and direct users to other relevant pages. For example, you could use an about us page, highlight relevant product categories, a pricing page, and more. There are plenty of options and they have a large visual impact on your ad. According to Google, by using the recommended minimum of four site links alone, advertisers can see a 20% increase in click-through rate on average by using this one form of ad extension.
  • Callouts: Small snippets of information, each 25 characters in length, which can highlight selling features or key USPs. Try to include a minimum of 8 callouts
  • Structured snippets: These are used to highlight specific products, services or features in a listicle format. For example, a bag retailer may include a Product Structured Snippet to highlight clutch bags, handbags, tote bags, backpacks, messenger bags, and card wallets

To illustrate how powerful ad extensions can be, here is an example of a Search ad without any ad extensions running alongside it:

how to optimize performance max campaigns - ad without extensions

As a comparison, here are two other Search ads that have served in the same auction showing numerous ad extensions. The Wolf and Badger ad features sitelinks, a promotion extension, and a location extension, while the Cambridge Satchel ad features sitelinks, a location extension, a review extension, and a price extension.

how to optimize performance max campaigns - ad with extensions

9. Ensure your data feed is up to scratch

This is relevant for advertisers submitting products via a data feed, using the Merchant Centre. Ensure you include as much information as possible in your feed and that it is up to date and relevant.

Important product identifiers that need your attention are listed below. The first three help Google to understand what you are selling and the last three are equally as important from an optimization perspective:

  • Brand name
  • Manufacturer part number (MPN or SKU)
  • UPC code (aka GTIN)
  • Descriptive titles
  • Google taxonomy/categorization
  • Product type

Your data feed will be the foundation of your PMax campaign and will have the biggest impact on results over anything else.

how to optimize performance max campaigns - optimized product feed

More tips on optimizing your product feed here.

Consider using a data feed management solution to get the most out of ecommerce advertising and for Performance Max campaigns. Feed management tools simplify and automate the nitty gritty feed work, which can ultimately boost online visibility and increase conversion rate and ROAS.

According to the aforementioned Feed Marketing Report, these tools are even more beneficial for certain ecommerce sectors, like automotive, fashion, and home & garden, that deal with a higher complexity of data feed management, due to the high amount of products and variations.

10. Optimize your audience signals

If you are not seeing the desired results after running Performance Max campaigns for a sufficient amount of time, one area to review is Audience Signals.

Tighten up Audience Signals by using your actual business data and prioritize this over using Google’s interests, which include the in-market and affinity audiences.

  • Customer lists should be your number one choice, providing you have enough customer data and the permission to use data for advertising purposes. Customer lists are powerful because they use your real-life customer data to help find new customers
  • Customer intent audiences take Google’s interests to the next level using relevant keywords
  • Website visitor audiences are also a good option, particularly if you are unable to use customer lists. Consider creating an audience signal based on website visitors, or website converters

Google’s interest-based audiences are still a great option but you should try out the above if you want to elevate your Audience Signals.

performance max audience signal setup

Start optimizing your Performance Max campaigns now

Performance Max campaigns unlock new opportunities for advertisers and businesses that have perhaps previously been missed, from cross-channel promotion and getting your ads onto new channels, to finding new customers and benefitting from Google’s automation and machine learning technology.

If you are an ecommerce and lead gen business, I would highly recommend experimenting with Performance Max campaigns and using the optimizations in this post! To recap, here’s how to optimize your Performance Max campaigns in Google Ads:

  1. Commit to your campaigns
  2. Add as many assets as you can
  3. Know the watchouts & workarounds
  4. Use the customer acquisition feature
  5. Optimize your asset groups
  6. Use campaign exclusions
  7. Choose the right bidding strategy
  8. Use ad extensions
  9. Ensure your data feed is up to scratch
  10. Optimize your audience signals

About the author

Jacques van der Wilt is a leader in the feed marketing industry and an entrepreneur. He founded DataFeedWatch (acquired by Cart.com), one of the largest feed management companies in the world, which helps online merchants optimize their product listings on more than 2,000 shopping channels in over 60 countries.

Prior to that, Jacques has held leadership positions in both the U.S. and Europe. He is also a seasoned guest speaker at industry events and a mentor at Startup Bootcamp.

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Facebook vs TikTok Ads: Key Differences & How to Use Them Together

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Facebook vs TikTok Ads: Key Differences & How to Use Them Together

Facebook and TikTok are two juggernauts in the world of social media marketing.

These platforms are hugely popular with advfertisers around the globe, and that’s not surprising. Both attract colossal audiences, both offer data-driven targeting options, and both are packed with powerful marketing tools.

However, if you’re thinking about including Facebook and TikTok in your paid social plans, then you need to understand the key differences between these platforms and how to effectively use both networks together.

In that’s exactly what we’re going to cover in this post! Let’s start with a little introduction to each platform.

Table of contents

What are Facebook ads?

Let’s start with a little Facebook advertising 101. Facebook ads are image-based ads with captions that are delivered across the Facebook network.

They can be served in various placements, including Facebook Stories, Facebook Messenger, the Facebook home feed, and more. They’re also available in a wide range of different formats, and these formats are often designed to achieve specific campaign objectives.

facebook ad examples - grin

For example, while Single Image and Video ads can be great for top-funnel activity, Collection and Advantage+ ads are built to generate clicks and conversions.

One of the biggest strengths of the Facebook advertising platform is its targeting capabilities. Facebook harvests a huge amount of data from its users, which allows advertisers to leverage advanced targeting tactics that can deliver exceptional results.

You can also easily extend Facebook ad campaigns onto the Instagram platform, which is great for securing incremental reach and targeting new audiences.

instagram ads costs: instagram ad examples

More Instagram ad examples here.

What are TikTok ads?

Now time for some TikTok advertising 101. Like Facebook ads, TikTok ads are also available in a range of different formats.

However, while Facebook ads can appear in several different positions throughout the app (e.g., Reels, Stories, Messenger) the majority of TikTok ads are served in and around the main feed.

Standard TikTok video ads (i.e. In-Feed ads, Top View ads, etc.) are capable of generating huge audience reach and sky-high levels of engagement, which is why they’re popular with both smaller businesses and established corporations (more on why you should advertise on TikTok here).

For brands looking to make a statement on TikTok, formats like Branded Effects and Branded Hashtag Challenges can also be incredibly impactful.

These ads are designed to drive mass user engagement and incremental reach, and many brands have achieved viral fame by utilizing these creative formats.

There’s no doubt TikTok ads can be highly effective for digital advertisers, particularly if you’re able to tap into popular trends (like Stitching) and create content that resonates with your target audience.

tiktok ad example

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Facebook ads vs TikTok ads: Head to Head

It’s time for a good old-fashioned social media showdown. We’ve done a comparison on TikTok ads vs Instagram Reels ads, now it’s time to compare Facebook and TikTok in a few key marketing areas and see how these paid social powerhouses stack up against one another.

Costs

To kick things off, let’s examine the average costs associated with TikTok ads:

  • TikTok average CPM (cost per mille): $10.00
  • TikTok average CPC (cost per click): $1.00

For comparison, below are the average costs of Facebook ads:

  • Facebook average CPM: $7.00
  • Facebook CPC (Cost Per Click) – $1.00

Both platforms are evenly matched when it comes to their average CPC, but Facebook is significantly cheaper than TikTok in terms of CPM. As a result, Facebook takes the victory in this category, enabling brands to achieve more cost-efficient reach.

However, this does come with a caveat.

It’s worth remembering that your campaign costs will be influenced by many factors, including your industry, target audience, ad formats, and bidding strategy. The above figures can be used as a helpful guide, but they’re certainly not written in stone.

facebook ads average cost per click

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Demographics

Now let’s break down the demographic profiles of the Facebook and TikTok audiences.

TikTok is known for its insane popularity among younger generations, and the data certainly backs this up. A whopping 41.7% of TikTok users fall into the 18-24 bracket – 31% are aged 25-34, while just 24.1% are aged over 35.

tiktok user distribution worldwide

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Facebook, on the other hand, attracts a broader mix of age groups. Just 22.6% of the Facebook audience falls under the 18-24 umbrella, while 31% of the user base is aged 25-34, making this the largest segment on the platform.

Older generations are also better represented on Facebook, with 41% of users over the age of 35 compared to just 24.1% on TikTok.

facebook user distribution worldwide

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So, what does this mean for marketers?

Well, if you’re interested in targeting Gen Z and younger millennial shoppers, TikTok is the place to be. The platform is massively influential among younger audiences, with data suggesting that 40% of Gen Z prefer using TikTok for searches rather than Google.

For brands less focused on younger generations, Facebook offers a more balanced user base, as well as a significantly higher reach. Facebook boasts around 2.96bn monthly active users, compared to TikTok’s 1.2bn monthly users.

Targeting

Audience targeting is fairly standardized across TikTok and Facebook, with both platforms offering basic options such as:

  • Demographic targeting
  • Interest targeting
  • Behavior targeting
  • Device targeting

privacy-first facebook ad targeting guide

 

Advertisers can also build pixel data-fuelled Custom Audiences on both TikTok and Facebook, as well as generate Lookalikes based on these segments.

However, the main difference here is that Facebook has been collecting and harnessing audience data for significantly longer than TikTok.

Facebook first introduced its ad platform way back in 2007, while TikTok ads only launched in 2020. That’s a sizable head start for Facebook, meaning the platform has access to a lot more user data and audience insights that can be used to improve campaign performance.

Although TikTok and Facebook offer near-identical targeting options, Facebook has the edge because it’s sitting on a goldmine of historical data.

Formats

TikTok and Facebook both offer a range of versatile ad formats, so let’s compare their offerings head-to-head.

Facebook allows advertisers to utilize the following ad formats:

  • Image ads
  • Video ads
  • Carousel ads
  • In-Stream Video ads
  • Stories ads
  • Collection ads
  • Messenger ads

facebook messenger ad example A Facebook Messenger ad example. (Image source)

Below are the ad formats available on TikTok:

  • In-Feed ads
  • Top View ads
  • Brand Takeover ads
  • Branded Hashtag ads
  • Branded Effects ads
  • Collection ads

tik tok ad examples

Image source

Once again, this category is remarkably close between the two platforms. Both Facebook and TikTok offer ad formats that can be used to achieve specific objectives. For example, In-Feed video ads to build brand awareness, or Collection ads to drive conversions.

The key difference here is that Facebook ads can be served in multiple environments across the app, while the TikTok platform design is more streamlined.

For example, Messenger and Stories ads appear in completely separate sections of the Facebook site, while TikTok ads are delivered in (or around) the home feed.

If you’re keen to test out a broad range of versatile ad formats, Facebook is a great option. However, if you want to maximize visibility, the simpler layout of TikTok may be more appealing.

Analytics

The ability to monitor, analyze, and optimize your paid social ad performance is crucial for success.

So which of these networks is best suited for campaign measurement?

The truth is that Facebook and TikTok are both well-equipped in the analytics department.

As marketing platforms, both Facebook and TikTok are designed to help advertisers achieve optimal results through accurate and accessible analytics. Each platform offers a built-in analytics dashboard (i.e. the Facebook Ads Manager and TikTok Ads Manager) that enables brands to monitor performance, create custom reports, and track conversions.

Beyond basic analytics, Facebook and TikTok also offer additional measurement options, such as Brand Lift studies and the ability to implement a tracking pixel on your website.

brand lift study in facebook ads

How Facebook ads brand lift studies work. (Image source)

You’ll never struggle to track and analyze your ad performance on either of these platforms, so this category is a clear draw.

How to use Facebook & TikTok ads together

TikTok and Facebook ads together are effective and profitable for businesses old and new, big and small.

Both platforms have their own unique strengths and marketing opportunities, which begs the question: How can you leverage both partners to accelerate your returns?

Let’s explore how you can combine Facebook and TikTok ads to drive optimum performance.

1. Gather & implement insights across platforms

If you want to grow your business in today’s environment, a cross-channel advertising strategy is a must. This means running ads on different channels like search and social, as well as on different platforms within these channels, like on TikTok and Facebook within social.

Running ad campaigns across multiple social media platforms enables you to collect more insights and apply more learnings. Be sure to frequently analyze your campaign reports on both TikTok and Facebook to identify these valuable cross-platform opportunities.

For instance, there may be a high-performing Facebook audience segment that you can replicate on TikTok or an effective creative asset that you can repurpose across platforms.

2. Strengthen your brand identity

I emphasized the importance of solidifying your brand identity in my Facebook trends post and this applies across platforms as well.

To do so, maintain a clear tone of voice across these platforms, use the same branding elements (colors, fonts, imagery, vibes), and regularly interact with your audience on both networks. Consistency is a great way to build trust among consumers, so use both Facebook and TikTok as a launchpad for your brand.

brand consistency across social ads

3. Expand your campaign reach

This may sound obvious, but make sure that you’re using Facebook and TikTok to effectively increase your overall reach and frequency.

Both of these networks give you access to unique audiences and specific demographics, so take full advantage of this. Experiment with different target audiences to discover new prospects, and make sure that both platforms have sufficient budget for scaling up (how to scale your Facebook ads here).

Maximize your Facebook & TikTok ad returns

TikTok and Facebook can both deliver outstanding results when used individually, but when these social media giants are combined, the sky’s the limit.

By capitalizing on the strengths of each platform and following some of these best practices, you can transform your paid social marketing into a well-oiled, conversion-driving machine.

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Account-Level Negative Keywords Now Available in Google Ads: What You Need to Know

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Account-Level Negative Keywords Now Available in Google Ads: What You Need to Know

While we’re all striving for different business and marketing goals with our PPC campaigns, we do all have one thing in common: to get the highest return on our investment. And there are a number of ways to facilitate that—one of which is through negative keywords.

And just recently, Google announced that account-level negative keywords are now available globally.

 

So what are they, what’s changing, and what does it mean? Read on to find out!

Quick refresher: What are negative keywords?

The PPC community includes advertisers of all levels, so before we dive into the announcement, let’s do a quick refresher on negative keywords. We do have a definitive guide to negative keywords which you are welcome to delve into, but we’ll cover the basics here:

When you create a Google Ads search campaign, you have to tell Google which keywords you are targeting/bidding on. These represent the queries that users type into the search bar that you want your ads to appear for. So if I’m selling box springs, I might target the keyword box spring and my ad might appear for queries like affordable box spring or box spring twin.

Conversely, negative keywords are the terms that you don’t want your ads to appear for. So if I only sell box springs, I might set mattresses as a negative keyword; or if the campaign is only for twin box springs, I’d want to add king box spring, queen box spring, etc. as negatives.

negative keyword match types in google ads

Image source

Negative keywords are important as they help your ads to appear only for the most relevant searches, which improves click-through rate and conversion rate and saves you from wasted spend.

What are account-level negative keywords?

You’ve always been able to create negative keyword lists for each of your campaigns. In account structure terms, this is called the “campaign level” and now, you can also set them at the account level. This means that if you have one term you want to set as a negative for all of your campaigns, instead of adding it to each individual negative keyword list in each campaign, you can just add it once at the account level and it will be applied across all campaigns.

What campaign types does it apply to?

When you set an account-level negative keyword, it will apply to all eligible search and shopping campaign types, which includes Search, Performance Max, Shopping, Smart Shopping, Smart, and Local campaigns (get a refresher on all Google Ads campaign types here).

In fact, negative keywords for Performance Max campaigns are account-level only, as noted by Jon Kagan in a recent #PPCChat:

Robert Brady responded saying this seems to encourage a second Google Ads account for PMax:

Julie Bacchini brought up the same idea in a separate thread, calling it “laughable” and ineffective.

A1.1:

I am not currently running any PMax campaigns in Google Ads, but their whole “we have solved brand terms” solution – letting you add account level brand negatives is laughable.

It neither addresses the issue advertisers have nor solves it.https://twitter.com/hashtag/PPCChat?src=hash&ref_src=twsrc%5Etfw”>#PPCChat

— Julie F Bacchini (@NeptuneMoon) https://twitter.com/NeptuneMoon/status/1620470621380526080?ref_src=twsrc%5Etfw”>January 31, 2023

 

How to add account-level negative keywords

To add account level negative keywords in Google Ads, go to Account Settings > Negative keywords. Click the plus button and enter them in.

account settings - account level negative keywords in google ads

For more help with managing your keyword lists in Google Ads, here are some additional resources:



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What the Big Tech Layoffs Mean for SMBs & PPC: 8 Key Takeaways

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What the Big Tech Layoffs Mean for SMBs & PPC: 8 Key Takeaways

Unless you live under a rock (I can say that because I’ve been known to camp out under a pebble or two), there’s no doubt that you’ve been hearing about one thing in the news lately:

Big Tech layoffs.

Microsoft, Google, Amazon.

It even has its own hashtag #layoffs2023.

Mass layoffs of any kind are unsettling no matter how applicable they are to you, but as a small business owner or marketer, you may have some concerns. Yes, this is “Big” Tech, but does this or will this have any implications for small businesses? Many of these companies are also ad platforms, so will this have any impact on PPC?

I’ve taken a dive into the story from this angle to provide you with some key takeaways. Read on to learn:

  • What’s happening in Big Tech?
  • Why are all these layoffs happening?
  • What does it mean for online advertising and small businesses?

What’s happening in Big Tech?

In January of 2023 we saw more layoffs in the Big Tech sector than in any month since the pandemic. To put things in perspective, there were 159,684 tech job cuts in 2022, but in January of 2023 alone, we saw 68,502. That’s more than 43% of what we saw in all of last year.

big tech layoffs 2022 vs 2023

Companies that have conducted mass layoffs in January and recent months include Google, Microsoft, Informatica Salesforce, Amazon, SAP, IBM, Spotify, Wayfair, Coinbase, and Vox Media.

As mentioned earlier, mass layoffs innately are concerning, but the reason why this situation is of particular interest is that not only is it unexpected, but it’s also being called one of the worst contractions in the industry’s history.

And it’s also a little peculiar when you look at it in relation to the labor market. As The Atlantic writer Derek Thompson points out:

  • During the 2010s, the labor market was weak but the tech sector was growing.
  • During the pandemic, the economy had a “flash freeze depression” while tech took off.
  • Today, the labor market is strong but tech is “bleeding.”

So what’s going on here?

Why are all these layoffs happening?

There are multiple factors at play, which Derek’s article does a great job covering. Here’s the rundown:

The expected tech “acceleration” from the pandemic turned out to really just be a “bubble.”

Tech companies, consumers, and investors alike all subscribed to the notion that the surge in remote work, ecommerce, and other online platforms during the pandemic put us on the fast track to the 2030s. But this has not been the case. We never made it there; we’re still just on our way and we’re settling back into the same speed of travel as in 2019. As a result, all of that expansion and investing now is in excess. Hence the contraction.

Inflation caused an advertising slump

Keep in mind that many of these tech companies—Google, Meta, Amazon, etc.— are also advertising platforms. And with inflation reaching its highest levels in 40 years in 2022, many businesses pulled back on advertising as this is often one of the first areas to see cuts during a shaky economy—not to mention the fact that advertising costs increased along with everything else.

Companies are preparing and adjusting

For some companies, the layoffs are happening also as a proactive measure. While inflation appears to be on the mend (it has dropped from 9% to 6.5%), economists, and therefore businesses and consumers are still wary of a recession. If these companies want to maintain profitability and to send the right message to shareholders, they need to prepare for businesses and consumers to continue cutting back on spend even in the new year—which means cutting back on spending themselves.

Of course there are spinoff theories and schools of thought, but these are the core reasons you’ll find woven throughout any coverage on the matter.

What does it mean for small businesses and PPC?

Alright, so now that you have a grasp on what’s happening and why, let’s talk about what this means for small businesses and PPC according to news articles, last week’s PPC chat discussion, and the very PPC experts who contribute to our blog! Here are some key takeaways that feel particularly pertinent:

1. Big tech is not at risk

“Revenue decline” doesn’t necessarily mean that any of these businesses are failing or on their way out. Remember, these aren’t just businesses, they are behemoths. And as Tech Reporter Bobby Allyn’s NPR article cited earlier states, while these changes are historic, they’re still small on a percentage basis.

These companies are still massively wealthy and Big Tech has been on a strong growth trajectory for the past ten years. Microsoft alone made $198 billion in revenue in 2022.

microsoft annual revenue

Image source

These measures aren’t a sign that they’re on the brink of disappearance, but rather course correction in accordance with the post-pandemic story as it unfolds, to get back on that growth trajectory.

2. This is only temporary; digital advertising will still grow

Given the above, it’s not surprising that many PPCers feel this is only temporary and aren’t concerned about there being a further economic downturn or ripple effect on small businesses or advertising in general.

Take digital marketing strategist, author, and speaker Anders Hjorth’s Tweet in #PPCChat, for example:

We also asked Brett McHale, founder of Empiric Marketing, LLC and regular WordStream contributor for his take on the matter and he shared the same sentiment:

“We have seen economic downturns and mass layoff lead to eventual booms/bubbles—what comes to mind is the 2008 economic crisis that eventually gave way to the tech boom of the 2010s. I’m not necessarily saying that is what is going to happen now, just that these economic situations tend to have a cyclical nature to them.”

It’s worth noting also that no one expressed concerns about any one platform in particular other than Twitter, for obvious reasons.

3. It could open up new opportunities

Another perspective that many PPC influencers and practitioners share is that with so many talented people out of work and with time on their hands, there is potential for new opportunities or movements to happen. Paid search manager Sarah Steman Tweeted in #PPCChat:

Mark Irvine, Director of Paid Media at Search Lab Digital and regular WordStream contributor (and former Streamer!), shared this viewpoint:

“The biggest piece to think of is that there are tens of thousands of people with top-quality talent reentering the industry who have years of experience working with large numbers of clients and varied budgets. They’re also well-versed in their former company’s tools and features and have unique insight into the industry from their past roles that many of us don’t have exposure to.”

4. We may see more small consultancies open up

Brett also sees new opportunities arising, more small consultancies in particular:

“I can see many talented professionals in the space making the transition from big brands to independent contract work. Taking on a W2 employee is a massive risk for a company whereas a 1099 employee is a much lower risk, both financially and legally. Talented folks who have lost their jobs might source their talent to multiple companies to create several sources of income for themselves and handle their own health benefits under their own LLCs. “

Navah Hopkins, Brand Evangelist at Optmyzr, regular WordStream contributor (and also former Streamer!) Navah Hopkins expressed the same:

“On a personal note, I often questioned whether I made a mistake not going for one of the big brands. When the layoffs happened, it cemented for me and many other digital marketers like me that we can thrive without “big brand safety.” I’m excited to see the rise of consultants and taking lessons learned to verticals that didn’t have access to the amazing talent now on the market.”

5. Agencies and large resellers have the most to gain

Another outcome we may see, Mark pointed out, is an influx of new talent to agencies and resellers.  Here’s what he had to say:

“Agencies and large resellers likely have the most to gain from this shuffle. Compared to small businesses, they’re in the best position to attract this new talent that has experience working across a large portfolio of clients. Additionally, Google’s most recent announcement is that of reembracing its partners, specifically resellers to enable more advertisers to grow on their platforms.”

google's turn to resellers

Resellers mentioned in the article include Accenture, Interactive, Incubeta, Jellyfish, and Media.Monks.

6. Advertisers need to be on guard

One potential concern that many PPCers agreed on was that with revenue in greater focus, ad platforms may start pushing features and upsells more so than genuinely helping advertisers succeed. This wouldn’t be a novel concept by any means (Google Ads automation anyone?), but it will be important to be extra vigilant, especially if you’re a beginner advertiser.

PPC influencer Robert Brady expresses this concern in his Tweet:

He also followed that up with:

And I feel like reps will be even more insistent on pushing features that help the platform and not advertisers. @robert_brady

Mark shared the same viewpoint:

“I’m going to be increasingly skeptical of new products released over the next ~120 days. Layoff rounds right before an earnings call is not coincidental. Product announcements aren’t coincidental either. There’s still lots of great teams at these companies that are making great things, but following a round of layoffs, a product manager isn’t going to boldly recommend that they push back their new anticipated tool for another quarter or two because it’s not ready. Implicit or not, many teams will feel the pressure to produce “quickly now” rather than “correctly later.” I would be extra skeptical of anything announced or anticipated before big days for their investors in April or July. Looking at you, GA4.”

7. Be prepared for outages and/or gaps in support

Another concern is that we could see a degradation in customer support or more outages. In fact, Google Ads was out for three hours on January 23.

Many agree that support is already lacking so this could be a pain point. Navah notes that these brands will be under higher scrutiny:

“The brands doing the letting go will be under more scrutiny than ever before. I suspect true return on investment with any of these platforms (Google, Microsoft, Amazon), as well as less patience for substandard service will be the main themes of higher churn for their customers. Many of us noted that it was odd Google Ads went down hours after the layoffs, and instances like these might become more common, and the industry will have less patience for it.”

8. Moderation and policy enforcement could suffer as well

Mark comments on this final concern (as if ad disapprovals weren’t already a pain point):

Unfortunately, I agree that traditional “cost centers” like customer support are going to be pulled from first. Particularly given the recent successes in AI like ChatGPT, it’s increasingly tempting to push AI in these areas.

However, I’m also worried that there’s temptation to pull away from areas like moderation or policy enforcement. Google has increasingly automated its policy enforcement over the past few years, to poorer results, and I imagine this will continue.

Twitter sets a dangerous precedent in eliminating its moderation teams and I think that lowered bar makes for poor incentives for other tech giants to dedicate resources to important non-revenue generating teams.”

headlines about twitter eliminating moderator staff

While I hope that companies continue to reinvest in their values, even things ensuring advertisers only pay for quality traffic and filter out invalid traffic are troubling. When no one is watching, are these tech companies going to improve or maintain their standards, or are they going to be tempted to water down that wine and charge advertisers for more traffic to influence their bottom line?”

So what’s the verdict?

If you haven’t been quite sure about how what’s going on with all of these Big Tech layoffs, my hope is that this article has demystified some of that for you. And as far as how you should be feeling, I’d say that a little concern is good, but panic? Not necessary. The experts and veterans in the industry aren’t taking any drastic measures. The idea is, as Ashton Clarke Tweeted to “help clients keep a level head and maintain stability.”

So long as you stay on top of the storyline, keep an eye on your metrics, and make PPC decisions based on data, not automated recommendations, your account and performance will stay in good shape!



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