SEM has already surpassed television as the main marketing channel in most markets, becoming the cornerstone of most digital marketing strategies. It is now more urgent than ever to adapt SEM processes and strategies to the new era of automation. To maintain leadership, leading companies must adopt a strategic SEM approach and invest in the programmatic activation of business intelligence data. In summary, search marketing must go beyond the platform.

In January 2016, Google published Search 2.0,the principles for successfully running campaigns on Google Ads. Search 2.0 emphasized the importance of maintaining control of keywords and bids, and the use of iterations as the vehicle for continuous improvement. This methodology has been refined by the best performance agencies around the world, including Fáktica Analytics.

But SEM has changed a lot since then. Although iteration and control remain critical elements for the success of search campaigns, they are no longer enough to drive growth. Innovations and changes in the Google Ads platform have brought about possibilities for hyper-efficient automatic campaign management, meaning that we marketing specialists need to broaden our skills to make the most out of SEM. We have identified three opportunities:

1) Understand and reinforce algorithmic decision-making

2) Align SEM with the strategic needs of the company

3) Agile management

But before delving into these opportunities, let’s quickly take a look at what has changed since 2016.

The New Era of SEM

With more efficient and automated account management, it is increasingly easier to manage a “standard” search campaign. Additionally, the experience of companies has greatly increased, which has narrowed the capability gap between specialists and non-specialists. Even as investments in digital marketing continue to increase, it is no surprise that 51% of performance agencies see in-housing as a threat. This is not because agencies are getting worse (on the contrary), but because it is harder for SEM agencies to justify their added value in an increasingly automated sector.

Technology has allowed algorithms to make far superior decisions in most areas of account management, and studies show that algorithms outperform humans in many cases, although the combined effects of algorithmic optimization and intelligent human intervention are even more effective. This is a trend across all industries, but digital marketing is especially susceptible due to data reliance. The four tech giants, Facebook, Google, Apple, and Amazon, each have an advertising platform. And their biggest advantage is proprietary data, which they do not share with advertisers, and which they use to train and optimize their algorithms.

The Power of Proprietary Data

Digital marketing platforms will continue to enhance the management tools and operational maintenance of campaigns. Moreover, the access they have to data about their users gives them an exceptional ability to make real-time decisions about offers, messages, and landing pages. For example:

• Conducting A/B tests of ads is becoming less practical since different users receive different ads if we allow Google Ads’ automatic optimization.
• It is increasingly difficult to match search terms with ad contents due to the increasingly frequent use of broad matches.
• Dynamic search and shopping ads continue to grow in importance, which limits control over the ads.
• Although Google Smart Bidding still has many flaws, it has shown that it can be very effective at achieving certain goals without having a well-defined campaign structure.

It is very likely that in just 5 years, most of the management of Google Ads will be more or less automated. What will then determine the competitive advantage?
The answer again is… data.

How Can We Take Advantage of Data?

The next wave of innovation within SEM will be the integration of data and business intelligence insights directly into the platforms, providing algorithms with signals based on company-owned data. Just as Google has an advantage by heavily relying on its own signals in bids, companies can gain an edge by using their data on 1) their customers and 2) their customer journey. Although recent legislation has changed the rules for data collection (for example, GDPR), there are still plenty of opportunities for companies to gain deeper insights into who their users are. Companies with a strategy will be able to ask powerful questions like “who is likely to be a regular customer?” and “what is the incremental value of seeing a search ad?”.

However, activating this data is not an easy task, and marketing specialists need to acquire a whole new set of skills to bring their data advantage to life. It’s not only technical skills for management and data analysis that are needed. Having strategic insights and an overall vision of the organization will be essential. There are many questions that data alone cannot answer, like “which new product will be in demand next summer?” or “what should be the budget for a market expansion?”. Marketing specialists must combine their technical skills in data management with soft skills.

In the following section, we will present our vision of the role of digital marketing specialists in this new era of search marketing and the areas that will be important to remain competitive.

SEM 2020: Signals, Strategy, and Insights

In the coming years, we foresee three areas where marketing specialists need to develop solid competencies. All three will require marketing specialists to expand their responsibility in making strategic decisions, as well as their technical knowledge, primarily within data management, customer analysis, and trend tracking:

Understanding and Reinforcing Algorithmic Decision-Making

With the increase in algorithmic account management, marketing specialists must learn to use algorithms to optimize the KPIs that are aligned with the overall objective of the company. This requires a profound understanding of business objectives, but also how to use different tools offered by Google (goals, bid strategies, etc.) to achieve the objective. For this reason, the combination of strategic vision and technical skills in management and data analysis will be essential for the next generation of marketing experts.
Success criteria for working with value signaling and setting goals:

• Customer Value Segmentation: Understanding the real value of each customer (customer-based marketing), for example, building Customer Lifetime Value models to improve goal definition and budget allocation.
• Multichannel Strategy: Adopting a multichannel strategy and using customer journey data to set budgets and goals.
• Customized Signals: Using customized conversion values to enrich the signals that feed the algorithm.
• Privacy: Building a trust relationship with users based on the ethical use of their data and always thinking about their benefit.

Aligning SEM with the Strategic Needs of the Business

Since operational excellence is providing less comparative value, marketing specialists should take on greater responsibility at other levels of the decision-making process. Assuming tactical and strategic responsibility will allow marketing specialists to leverage SEM marketing to assist with business issues outside their usual scope, such as inventory management, market development, and branding. Instead of obsessing over CTR, CPA, and conversion rate, search marketing specialists should be asking: What business problems can search marketing solve?

Success Criteria for Tactical and Strategic Vision:

• Strategic Responsibility: Embrace strategic responsibility and understand the different levels of decision-making (operations vs. tactics vs. strategy).
• Organizational Synergies: Enhance interdepartmental communication and identify organizational synergies between search marketing and the rest of the business.
• Rethinking Hiring: Hire to achieve a balance between optimizers and innovators (more balanced approach in iterative improvement versus game-changing solutions).