Covid-19 | The Unexpected Impact On Google Smart Bidding

April 3, 2020



Since the outbreak of the coronavirus and the UK’s subsequent lockdown we have seen some of the most polarising results for our clients that we can remember. Due to the overwhelming amount of data and numerical analysis that is available to us in the digital world then external factors can often be overlooked but, as we saw time and again with Brexit, the impact uncertainty can have is huge and Covid-19 represents a level of uncertainty that is above and beyond anything we have witnessed before.

It has been interesting to see how industries have been impacted in different ways by the life changes that we have all had to accept. With social gatherings cancelled and time out of the home restricted then any business that has face-to-face interactions at their core was always going to be hit hard. Contrastingly, companies that offer products that are particularly relevant during isolation have thrived to the point where replenishing stock fast enough to deal with the demand has been the biggest problem. The impact on these two was arguably fairly predictable and pre-emptive adjustments could have been made accordingly, but what has been more of a challenge is trying to predict those outside of the obvious where people’s general behaviour has had a knock on effect to their digital behaviour and then how our engines or platforms have been able to cope with this.

One of the major knock on effects that we have seen to those clients outside of the ‘obviously impacted’ segment has been when they have campaigns that are running with Google’s Smart Bidding. As an agency our uptake of Smart Bidding has been steadily growing month on month for well over a year now and the results have consistently and steadily improved. Google have been investing heavily in this offering and nearly all of the less desirable ‘quirks’ that they started with have been ironed out and replaced with the kind of refined, well-oiled, multitude of micro optimisations that we were promised when it first launched. However, last week for the first time in a long time we saw these campaigns struggle disproportionately and alarm bells began to ring.

For those who aren’t aware already, Smart Bidding works by pulling in information from a variety of different sources in order to understand the likelihood of an individual performing a desired action and then producing a bid that represents value based on this likelihood. Beyond these details the only extra requirements are a ‘learning period’ of a few weeks to allow it to familiarise itself with patterns and a volume threshold in order to provide sufficient statistical significance. It’s a tried and tested methodology that has been working well for a long time so any sudden drops were always going to be cause for alarm.

The issue here is not that Smart Bidding has broken (we are sure it would still be working fine if Covid-19 hadn’t come along), but rather that its inability to react to swift and dramatic change has been highlighted and exposed. We know that this is an area of weakness from past experience around flash sales and in this instance it seems like the change in SERP behaviour has been sufficiently sizeable to warp its “past performance” indicators and lead to a drop off in its judgment of potential customers. It’s not much comfort seeing this after events have unfolded, but it is at least a lesson to take away on some of the limitations of these often incomprehensibly complex setups and realise that the element of human judgement and reaction remains (for now at least) a fundamental part of digital advertising.

The adjustments that we made to the way that the impacted campaigns are set up has resulted in improved results fairly quickly, however we do believe that this is definitely going to be something of a balancing act over the coming weeks. The learning period was too slow to pick up this dramatic change in behaviour, but if we are looking at many more months where a Covid-19 existence becomes BAU then Smart Bidding will be back in its element as the environment will, sadly, have become the norm.

For the greater good of everyone though we hope that Smart Bidding finds itself caught out by swift change once again very soon as we return very quickly to normal life.

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