
Episode Description
Although AI and automation are significantly reshaping the PPC landscape, we cannot understate the importance of human oversight in making strategic decisions and ensuring AI-driven campaigns align with business goals.
In this PPC Town Hall, our CEO, Frederick Vallaeys sits down with Josh Baines, Director of Customer Success at Adthena, to discuss the real impact of AI on search, bidding, and competitive strategy and what it means for advertisers.
In this episode you’ll learn more about:
- The real role of first-party data in PPC
- Using competitive intelligence to outsmart your rivals
- Why automated bidding isn’t a one-size-fits-all approach
- The shift from keyword to AI-driven search
Episode Takeaways
PPC is continuously evolving, changing from manual control and leaning in favor of automation. Success largely depends on how well you understand your target audience, campaign goals, and the quality of your input data.
Fred and Josh talk in detail about how advertisers can adapt and thrive amidst these new changes and future-proof their PPC strategy.
1. The real role of first-party data in PPC
When dealing with Google’s automated bidding and PMax campaigns, it is essential to make sure that you feed these algorithms the highest quality data possible to maximize performance.
“When it comes to the control we have over these more automated campaign types, I think the input is still going to have a significant impact on the output. So are we setting ourselves up in the way to provide these models with the highest quality data possible to maximize the output that that they will give you the inputs that I mention are things like first-party data” shared Josh.
He also stresses the importance of having a fully mapped-out conversion funnel along with accurate attribution between different kinds of data and campaigns to make sure you’re providing AI with the best combination of assets for better results.
2. How to use competitive intelligence to outsmart your rivals
When going up against competitors, it becomes important to track multiple types of conversions such as form submissions, newsletter sign-ups, purchases, etc. in order to measure the value of different campaigns. Tracking micro-conversions like the ones mentioned above gives you a full picture of success beyond just purchases and you avoid optimizing for the wrong goals.
“Say I want to go ahead and conquer a certain competitor. In those instances I would say it’s beneficial to have as many conversion actions broken out in the account to be able to accurately attribute the value that those types of campaigns are driving” says Josh.
It also helps you refine your audience segments by evaluating which ones react best to your conquesting ads, allowing you to tailor messaging and landing pages based on conversion behavior.
3. Why automated bidding isn’t a one-size-fits-all solution
Although automated bidding is the new norm, it may still not be the best approach for some campaigns. For one thing, like we said earlier, the key to maximizing performance for automated bidding strategies is to have as much high-quality data as possible. Advertisers who deal with campaigns that do not have significant data may find that their system is not able to deliver the best results.
In such scenarios it is beneficial to:
- Combine automation with some amount of manual control to optimize performance for smaller accounts or niche campaigns
- Set realistic ROAS or CPA targets based on the current data
- Adjust your bidding strategy to the campaign goal rather than blindly applying automation
- Continuously monitor search term reports and audience data to get the best results
4. How the shift from keywords to AI-driven search changes PPC
The keyword is no longer what it used to be. This is partly due to AI-driven experiences like Google’s AI overviews which dominate the top of the search results page. Another reason is the rise of AI-powered chat interfaces which allows for more complex search interactions rather than just keyword phrases.
“The keyword is no longer what it used to be. It’s no longer about ‘running shoes’ or ‘Nike running shoes’ as the thing that gets you to find something. Partly that’s because the search results page now has the AI Overview, which is really pushing a lot of the other stuff towards the bottom. But it’s also because how people communicate through a chatbot is no longer just a couple of words—it’s an entire conversation” says Fred.
“The landing page as we know it is dead… by the time someone comes to the landing page, it’s just to do the transaction. AI is going to do the transaction for you—it will check inventory, have your credit card details, and complete the purchase” notes Josh.
Considering how AI is shifting search behavior, future search engines will function more like digital assistants, storing a user’s interactions within its memory and retrieving relevant information without the need for a direct search. Search will become more intent-driven.
“It’s no longer about the keyword defining what you need—it’s about the keyword triggering the thing in my digital memory.”
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Episode Transcript
Frederick Vallaeys: Hello and welcome to another episode of PPC Town Hall. My name is Fred Vallaeys. I’m your host. I’m also CEO and Co-Founder at Optmyzr, a PPC management software.
Today we have Josh Baines on the show. He is at Adthena where they do competitive insights on the search results pages. And what’s interesting in talking to Josh is that there’s some first party data that you can get from the search results pages that can really help inform your strategy. New types of first party data you may not traditionally think about.
So Josh works on a lot of accounts and we’re going to hear from him how he thinks about automation and bid management in this ever more automated world. What should you rely on automated bidding for ? When do you think about different ways of attributing the results? When do you maybe still go back to more manual ways of doing things?
And we’re also going to have a conversation about how the search results pages are changing, how consumer behavior is changing, and what that may all mean to the future of how you do digital marketing. So with that, let’s get rolling with this episode of PPC Town Hall.
Alright. Welcome to the studio, Josh. It’s great to have you on PPC Town Hall. So tell us a little bit about who you are and what you do.
Josh Baines: Thank you very much, Fred. Yeah, great to be here. Quick introduction to myself. So my name is Joshua Baines. I’m the team lead of Customer Success for Adthena, based out in Austin, Texas. Not originally from Texas. I’m not sure if the accent gave it away.
I work with Adthena, which is a competitive intelligence solution for search. Been here for about four years now—two years in the States, and my responsibility is really to make sure that our enterprise level customers get all the support they need to ensure that they get value out of all of the great data that Adthena has to offer.
So as mentioned originally based in the UK, bobbed around a few agencies and actually started my career fresh out of high school at Google on their apprenticeship program in central St. Giles. So I pretty much spent all of my life in the digital/Google/search space. And yeah happy to be with you today.
Frederick Vallaeys: Yeah, great to have you. So having done this basically your entire career and having started at the mothership over at Google, like what are sort of the big trends that you’re seeing right now? And I imagine there’s some generative AI and some AI, but like, what are these changes and how do you perceive them?
Josh Baines: Yeah, it’s interesting. So, I mean, if I cast my mind back to even before then, sort of just as I was starting my career, I felt that I was really hitting a crest of the wave in terms of all things automation. When I first started learning the ropes at Google, smart bidding was all the rage at that point.
It was relatively new to the market and I think was sort of the first foray into mass scale and mass produced automation. And so ever since then, it’s really been my interest area and my key focus. And one of the reasons why I’ve wanted to stay in industry for so long is just keeping a pulse on how automation in particular is adapting and evolving in our landscape.
I think if we fast forward and where that leaves us today, it’s obviously come a long way. I think 8 to 10 years doesn’t necessarily sound like a huge amount of time across other industries in search and in digital. In general it’s almost a lifetime.
So I think that the main things that are top of mind from outside at the moment is really the near full scale migration towards these more automated solutions that the likes of Amazon, Google, Microsoft are producing. Whether that be through, as you mentioned, changing to the way in which information is served, through things like gen AI, or whether that’s just how you manage and run your campaigns. I’m sure we’ll get onto things like performance max in a little bit as well.
But those are some of the real, kind of key topics and hot topics that both myself and my customer base are talking about at the moment.
Frederick Valleys: And so, I think one of the big questions within this automation and bid management is how do you leverage the best of these capabilities that exist while still remaining in charge and having some visibility into what’s happening?
And especially I think on PMax, that kind of applies, right? Because you basically say, hey, Google, here’s a budget deployed against any of these seven channels that are out there. But you probably have some preference or you may have some information about what has worked historically and so how do you retain that control?
Josh Baines: Yeah, it’s a great question. I think Performance Max and the way in which it runs is almost at odds with I think almost the personality type of digital marketers. I think one of the great things obviously about the industry we’re in is the impact of inputs on outputs is very very easy to measure.
It caters to testing. It caters to tweaking and optimizing and measuring the outputs very easily. And I think a little bit of that to a certain degree has been lost with the rise of things like Performance Max. You know, it does become a little bit more of a black box, at least compared to other more traditional formats, within you know, the likes of Google etc.
So I think a couple of key points are—number one, the controls that you do have over these more automated campaign types, I think the input is still going to have a significant impact on that output. So are we setting ourselves up in a way to provide these models with the highest quality data possible to maximize the output that they will give you?
And the inputs that I mentioned are things like first party data. You know, do we have our conversion funnel fully mapped out? Do we have watertight data and attribution between different campaigns and different channels? Are we continuing to sort of test different asset combinations and making sure that we’re providing the AI with the best combination of assets?
So I think number one is ensuring that the inputs that you’re giving it are most optimal. And then number two, which we might speak about a little bit later on, is then what type of visibility can we actually get when it comes to these more automated, potentially more black box type solutions like a Performance Max?
Frederick Valleys: Yeah, so let’s talk about those inputs a little bit more. So you said first party data and that’s a topic and a theme that comes up pretty often these days now The position that you’re in at Adthena I think you guys think about maybe first party data and the data that you should use to leverage your campaigns a little bit differently from some others. So one example that comes to mind for me is what’s the interplay between SEO and PPC?
So talk a little bit about that and maybe some other first party data that you think that maybe not enough people are leveraging.
Josh Baines: A hundred percent. Yeah, I think with the way in which the SERP is evolving. In particular, it seems like the days of four paid listings above the organic and three below, whilst you do still get that in some instances, it feels like we’re beyond that.
There’s a significant increase in Gemini and other paid formats, whether it’s local service ads, et cetera. So I think at Adthena in particular, we really like to consider the SERP more holistically and traditionally where paid and organic might be considered two separate entities we really do like to consider them as one.
What’s really positive in my experience is I think a lot of the enterprises that we work with, they are starting to integrate those two teams in particular more. And they are following on with that mindset of treating both of those channels as one.
From an Adthena perspective, and I will toot our horn a little bit here, there’s been a lot of product development to essentially support advertisers and how best to leverage both of those channels together in one. So, Fred, you might have heard of a product called Brand Activator, which I’ll very quickly talk about. Essentially, it’s a way of managing your paid activity by leveraging both organic insights.So, are you ranking well organically? As well as competitive insights, which is really our bread and butter.
So other areas where maybe we’re over investing with minimal competitive pressures. We’ve got a strong organic presence. If so, can we scale back that brand spend? Still occupy a lot of the real estate on the SERP, but you know, be a bit more smart in terms of how we deploy budget, free some up into maybe more incremental areas as well.
Frederick Valleys: And so when you think about SEO performance and PPC performance and SERP more holistically, I guess what you’re saying is sometimes it doesn’t make sense to spend money on PPC if you don’t have a lot of competition and you have an amazing organic listing But that is a topic that’s often debated right? Like Google will always say one plus one equals three in this scenario So you should have SEO as well as PPC, you should never just do one or the other you shouldn’t choose.
So give me a little bit more of a take on what you’ve seen from the Adthena data. Like, does it actually make sense to run both at the same time? Or like you’re saying, are there scenarios where it’s just, you’re spending money on something you would have gotten anyway? So what’s the flywheel effect? What’s the wasted money? Like, talk more about all of this.
Josh Baines: Yeah, I think firstly, a lot of it depends on number one, the type of business and the priorities of that business, which is something that we naturally want to take into account. An example I would give is maybe we’re in a very dynamic offer led industry like retail and having the immediate flexibility with creative is something that we know is a key part of hitting our performance goals. In those instances maybe having Google’s potential recommendations of both organic and paid is something that may be to the benefit of the overall digital campaign.
That being said, in our experiences what we have seen is that there are definitely efficiencies that can be found when you have the ability to add a very high frequency and a very high cadence, sort of tweak and adjust the way in which you leverage the brand on the SERP.
I guess another component to bear in mind as well is things like landing page experience. Organically, we are still directing users to the most relevant and highest converting pages for those users. And I think if that combined with the offer and creative flexibility components, if those two are both a big tick, then absolutely it’s definitely worth exploring all their efficiencies and opportunities to be found in that.
And I think one other quick point I’d make on this as well is think it’s about what is going to be the overall holistic benefit of the digital campaign and the overall marketing campaign more broadly than that.
And to the point I made earlier, on a last click model, if you’re starting to test with scaling back brand, maybe even switching brand off altogether, your last click paid search activity is obviously going to suffer, you know, we all expect to see that. But if we’ve got our measurement in place, if we understand the organic uplift and the savings from that are greater than any potential traffic or conversion lost from organic and that can be effectively reinvested, then we normally see that it nets out as a positive for our customers
Frederick Valleys: Yeah, and that makes sense. And so the hypothesis is that sometimes you can achieve cost savings this way. How would you typically go about testing this, or do you just believe in the hypothesis and just go with it. What’s the testing framework you would normally deploy?
Josh Baines: Yeah, firstly we obviously want to make sure that we have as much as watertight a testing criteria as possible, if we were to ever propose doing this. Because if we look at Brand Activator specifically, obviously the mechanism of the product is that when you need to be there you are there and when you’re not you don’t. But naturally to the point you made earlier, Fred about do we know the organic is going to pick up that slack, we need to make sure that we have the ability to measure that to a certain extent.
Now that can obviously get quite challenging as we get further down, maybe the conversion funnel from an organic perspective. But using, I don’t want to call them proxy metrics, but using softer metrics around organic positioning, organic traffic at a search term level to pages, you know, as paid goes down, does organic go up as sort of oversimplified as that sounds.
So ensuring that we have the ability to track those softer metrics in lieu of more sophisticated organic conversion measurement is definitely a good place to start. And then overlaying that with a competitive presence, whether that be in a click share, share of impressions as to when you were offline, combining all of those together, along with some lower funnel conversion data across search holistically, and you can hopefully draw some pretty good conclusions from that.
Frederick Valleys: Right. And so now you’ve shifted into the outputs, right? So we’ve talked about the inputs being like what’s happening on the results pages. The outputs are now, what is it we’re measuring as the conversion? And like you said, maybe it’s a softer conversion we’re going after. What do you think about the amount of data that you need? And so I’m kind of assuming that you with Brand Protector or Brand Activator probably tend to work with bigger brands who by nature also have higher conversion volume.
So at what point do you still think about the micro conversion or the softer in-between conversion as a necessity? I mean, would it help someone who already has a ton of, like more than 30 conversions per month in a campaign? Talk a little bit about that.
Josh Baines: Yeah, I think with regards to the sort of specific mechanisms of Brand Activator, there’s almost two things here. I think number one is just that it’s the product, it’s the way in which that product works. The second point, which I think might be more pertinent to the examples that you gave there is, the more generalized view of finding efficiencies on the SERP within brand and what is possible within that.
I think firstly, if we are talking about customers or accounts that do have low conversion volume, for example, the sub 30 per month or whatever it was that you mentioned, and that’s naturally going to carry more risk with Google owned and operated products anyway. Whether that be any form of automated bidding or attribution models. So naturally that’s going to carry a degree of risk.
Now the way in which the Brand Activator works specifically, it does naturally lend itself towards larger, sort of enterprise level customers. But I think the overarching idea and concept and willingness to test finding efficiencies on the SERP in brand in particular, is something that companies of potentially any size could explore.
I suppose that the one consideration to have there is what is it that you can do with those funds? If we are talking about smaller companies here, maybe it is beneficial. Maybe your organic positioning isn’t as strong anyway for a smaller business. So maybe it is beneficial to sort of capture that demand and still run that branded activity.
Also potentially, because if budgets are low, maybe you’re not going to make much of a splash in the non-brand space anyway.
Frederick Valleys: Yeah. So as we talk about the number of conversions and where it’s, you know most useful to use something like Brand Activator. Like let’s shift a little bit to bidding maybe. When it comes to automated bidding are you pretty strictly all in on automated bidding or do you find scenarios where maybe you do revert back to manual and maybe because there isn’t enough conversion volume, like what’s sort of the playbook when it comes to bid management these days?
Josh Baines: More in than we were eight years ago, put it that way. I remember significant hesitations early on in my career when smart bidding really first hit the market and there was a real push from Google. I think as with any of these types of products, we can expand that beyond just these sort of digital channels. It’s almost a bit of a self fulfilling prophecy, right?
You know, you launch these tools, they require data to function. Well, the more data you put in, the better it becomes. The more people adopt it, the more data it gets and it snowballs from there. And I think that, that has had a, obviously a naturally a very positive impact on the way in which these automated bidding solutions work.
And there’s no denying that they are incredibly intelligent now in terms of the amount of signals that they can take into account and their ability to predict and optimize activity at scale. My general view would be that it is the direction of travel that we’re going, right?
It’s now almost the new norm that you set up a campaign and it will be opted in to some type of automated bidding and I would definitely recommend that. Especially as you get into larger accounts, as you get into accounts who have sizable product feeds, it’s not feasible to expect someone to manage accounts of those scale anymore. And if they were, I don’t believe that the results they would get would compare to anyone running these types of automated bidding strategies.
Frederick Valleys: And what kind of automated bidding are we talking about here? So in the case of e-commerce, I’m guessing tROAS?
Josh Baines: TROAS yeah. Any type of, sort of, maybe there’s a max conversion with a tROAS limit overlaid. But in general, that’s, that’s what I’ll be talking about. Yeah.
Frederick Valleys: Okay. So maximize conversions with a tROAS limit or a ROAS limit.
Josh Baines: Yeah, which essentially operates like a tROAS anyway, right? Assuming that you’ve got relatively uncapped budgets.
So yeah, I think I would definitely never shy away from being open to adopting these because I think you’d be somewhat naive to say that you could do it better.
I guess maybe there’s certain considerations that could be made. Potentially if there are more subjective measures, of maybe not a value but more subjective things that you’re looking to achieve with your campaigns.
So I don’t know, maybe you’re just solely focused on sort of protecting the brand and previously when you’ve set a target impression share strategy, CPCs have run away with things you’re less concerned about using it as a last click revenue driver, it’s there to sort of protect your name.
Maybe there’s a world in which you could get better results out of kind of testing and tweaking, raising those bids up or down. But in general, for accounts that have any significant scale and that do want to drive strong performance, which I think everyone does. Naturally, I think it’s going to lean in favor of these more automated bidding strategies.
Frederick Valleys: Alright. And so you don’t have to have just one exclusive goal. So you can have campaign level, conversion events, for example. So your brand campaign could have a goal that’s maybe not so ROAS driven, but more brand protection. So, talk a little bit about how in a typical account, how many conversion events do you have? Do you set them at the campaign level, account level, or do you even go higher at the MCC level? What sort of guidance on that?
Josh Baines: It’s a good question. Yeah, I think I’m normally just a fan of more data and more inputs is better. Now, naturally there’s, I imagine situations whereby that can go too far. And I think to the point that you made that campaigns are often going to carry slightly different, either waiting or a slightly different purpose in your overall marketing stack.
An example might be I want to go ahead and conquest a certain competitor. Maybe I’ve noticed that they’re running some above the line activity or maybe it’s a defensive play and they are actively conquesting on my brand. I don’t want to have that. I want to go up against them. And I know conquesting carries its own sort of questions which maybe we can get onto another time.
But I think in those instances, whilst it’s still I would say beneficial to have as many conversion actions broken out in the account to be able to accurately attribute the the value that those types of campaigns are driving. You might not necessarily need to optimize towards those so maybe you have all of your conversions whether it’s maybe you’re tracking 10-20 conversion actions.
You might have all of those being pulled into your Google or your Microsoft ads account. It might still be beneficial, as I said, to understand what some of these secondary campaigns are doing from that perspective. But potentially it might not be worthwhile actually opting them in and directly optimizing towards those actions if that campaign has a secondary goal like a conquesting or a protection, for example.
Frederick Valleys: And as you take a look at these competitors and maybe think about some conquesting, you’re probably going to be looking at the SERPs, look at what your competitors are doing. Maybe use Adthena to find that data. If you see your advert that your competitors are running certain types of ads, like, do you emulate, do you copy, do you take a radically different approach? Like what’s it, what’s the playbook right there once you see the trends.
Josh Baines: Yeah I would always recommend firstly having a deep understanding of your competitors. What is it that they go to market with? What are the value propositions that they deem to be worthwhile calling out to the users. And that is something that we can see at scale across Google within Adthena, for example. But also just understanding that maybe I’ve seen a TV ad, or maybe I’ve just gone on their website and I understand a bit more about what it is that this company is going to market with and what they’re priding themselves on.
And then I think it’s really up to how does your business stack up to theirs and are there any areas that you think, I say you beat them out in that. Maybe sounds a little bit aggressive, but you don’t necessarily want to directly go after them. ’m not sure how many B2B companies you’ve had experience with before Fred, but in that industry in particular, especially B2B tech, we see a lot of X versus Y, or see why our company is better than this company.
That’s a little bit aggressive, if you ask me, so I don’t think, you know, you necessarily need to get the pitchforks out and attack competition to that extent. But once you have a deep understanding of their value propositions, where you as a business stack up to them, what you can then do is almost indirectly call out the areas that you are stronger than them on and favor those in your messaging. Whether that be quality of service, speed, price, whatever it might be, just understanding where you beat the competition and then heroing that in your ads or favoring that in your assets.
That’s sort of the playbook that we’d normally recommend when it comes to speaking about messaging.
Frederick Valleys: Right. And like say that you’re competing against Amazon. So not B2B in this case, but like, you’re not going to offer better pricing or faster shipping in many scenarios. You just can’t as a smaller business, which most businesses are smaller than Amazon.So, you’re exactly right. It becomes about what is your unique value proposition. But then it also becomes interesting because like, do you then think about segmenting your campaigns to different audiences? Because you could imagine someone who may have an environmental impact. You know, maybe Amazon is too big, maybe their data centers use too much energy.
So is that the unique value proposition that you’re a greener company? Maybe it is, but that’s not going to land with every consumer, right? So then you might want to segment to say, okay, which consumers would care about this element of our business and that unique value proposition would really resonate with them. So do you ever look at that and like, and how do you like, structure-wise keep the scale reasonable? Is this even something that you do?
Josh Baines: It’s an interesting way of thinking about things. In my experience, the conversations that I have with my customers, they might not necessarily go to that degree of granularity in terms of targeting specific segments. But to your scenario, yeah, if I’m a smaller retailer potentially my products compete with Amazon. Or maybe my products are sold on Amazon. But from the perspective of a user on the SERP, I’ve got an Amazon ads, I’ve got a, I don’t know, Fred’s Christmas decorations and the products might be the same, but potentially there’s incentive to go directly to our own sites.
So, we don’t necessarily, I haven’t necessarily in my experience had conversations that do go as specific as maybe targeting certain affinity segments. Oftentimes they’re kind of naturally taken into account. If we think back to the more sort of automated bidding, real-time bidding aspect of things. But that being said, it’s quite an interesting idea that you’ve left me with Fred.
Frederick Valleys: Thank you. And then, that leads into an interesting scenario where I think sort of having this broader view of what’s happening on the SERP, that becomes your first party data and informs your strategy, right?
Because if you are, say, Adidas and you sell a specific type of running shoe, well, that running shoe may be available on a number of retailers. So then determining, okay, is it better for us to sell it directly? Or do some of these retailers maybe have more of a local presence so they can actually offer same day delivery or same day pickup whereas from adidas it has to be shipped maybe that’ll take a few days.
And so kind of thinking more holistically and that again that is your first party data is understanding who is still helping us sell more of our stuff but in different ways with different value propositions and when do we want to outshine them and be ahead of them? And when is it okay if they’re ahead of us?
Josh Baines: Absolutely. Yeah. And I think the first party data component of that, that you mentioned that I think is a huge part of defining what that strategy should be, and then taking all of those inputs and then saying, right, now, can I use those inputs to inform a strategy that is most optimal for both ourselves and also for these retailers as well?
Because in more instances, well, I imagine in the vast majority of instances, as a retail company or as a manufacturer, you’re going to have relationships with those retail partners.
Some of the, I think the higher level strategic conversations that I’m having quite a lot recently, especially as we approach Black Friday, Christmas, all of that is what data points can we use to inform a more data driven approach towards the relationships we have with these partners.
On one hand iIt’s definitely beneficial to leverage just the general business framework of a Dick’s sporting goods, for example, if I’m a shoe provider. As you said earlier, they will have excellent return policies, they’ll have seamless shipping experiences. It’s going to be beneficial to leverage that company and also the size of that brand, but how much of your brand ownership and brand equity across digital do you want to give away versus how much do you want to kind of own and operate? And I think historically, a lot of that was potentially defined by the keyword itself.
Maybe you say, okay, you can focus on sale terms or brand plus shoes. As we know, we’re getting further and further away from the keyword itself being the truest indicator of intent. And that is where I think to your point earlier, audience signals are becoming far more pertinent when it comes to understanding things like that and forming that strategy that I mentioned earlier.
Frederick Valleys: That made me think about Nike. So as you think about what role your own brand plays in an ecosystem where your stuff may be sold by others, there’s many layers, right?
So there’s affiliates who are promoting that same website but they’re in a commission and there’s actually like vendors who are selling your product but through their own brand. So what happened with Nike over the last couple of quarters is they started taking a really heavy reliance on direct to consumer and they started pulling their product out of a lot of these local retailers like Locker.
So what ended up happening is, sure people started buying the product on nike.com and they didn’t have the middleman. So Nike was making more money that way. But the other thing that was happening was people would still walk into Foot Locker. People still want to go and look at like, what’s the new shoe? And then when the Nike shoe wasn’t there, guess who was? Hoka was there, On Running was there.
And now all of these brands, like even New Balance, all of these brands that used to be far behind Nike, all of a sudden have big market shares and they’re the fastest growing and they are cutting directly into Nike’s profits because Nike was too protective of its brand. And so it’s quite interesting, right?
I think that’s what you’re saying too is like look at these data points, have them available. But don’t just assume one thing is the right solution. Like once you have that data start measuring it and start steering the ship based on that because it can definitely go the wrong direction as well.
Josh Baines: Could I just say I find that such an interesting example there, because as it’s becoming increasingly more of a digital world, which is obviously a a statement that is not a surprise to anyone, I do find it, I find it very interesting that the example you gave there is almost indicative to users’ purchase behavior 20 years ago, whereby you would go into a store and browse and pick out a size and a model and go home with your new sneakers. Because whilst we are obviously progressing in one direction from a user behavior perspective, I do also think that it’s. It’s very important to still remember that side of things.
And I think, yeah, to your point, if there was such an impact on the bottom line by setting stricter rules or by pulling out of local retailers directly, I think it’s a bit of a wake up call maybe for other larger advertisers to say, okay, let’s, let’s not forget about that side of things. Whilst it is going in more of a digital direction, there’s still a sizable amount of footfall that’s out there to capture as well.
Frederick Valleys: Exactly right. For certain things, people still like to be out and about with other people, go into a store, try things on. So, and again, the answer in digital marketing is always that it depends. We don’t know what the right answer is. So ultimately it’s about testing and experimenting and being able to make quick changes depending on what you’re seeing.
Now, one of the big things that’s happening here, that we all need to get ready for, and you kind of alluded to it, but like the keyword is no longer what it used to be. Right. So it’s no longer about like, running shoes, Nike running shoes. Like that’s the thing that gets you to find something. And partly that’s because the search results page now has the AI overview, which is really pushing a lot of the other stuff towards the bottom.
But there’s also the fact that how people communicate to a chatbot is no longer just like a couple of words. It’s an entire conversation. So talk a little bit about what you see with the change in how keywords work.
Josh Baines: Yeah, it’s been coming for a while. I think anyone who’s had their ear to the ground and just seeing the direction of travel from these larger Google, Amazon, Microsoft. So I think we’ve all been sort of braced and ready for these types of changes. It’s interesting that early on it reminded me of a bit of an expected boom that maybe didn’t quite arrive. Probably five or six years ago.
I’d be interested to hear your thoughts on this actually Fred as wel. I remember that when I was working for an agency in London, voice search became a huge topic of conversation. I think it was when everyone started to get Alexa in their phone and there was a general thought amongst industry professionals that it was going to have a significant impact on advertising, in the way in which people do advertise.
And it felt like whilst it did materialize, it wasn’t the earth shattering move away from traditional ad formats that maybe we were expecting. It does feel like we’re starting to get to that now though. And I think people are starting to recognize that. I don’t know, do you, did you feel that?
Frederick Valleys: I’ll give you my opinion. So I think voice is two things, right? There’s voice interactions within Alexa, where it’s a voice input, a voice output. And I think that was always challenging because the typical consumer still wants a variety of options. And it is much quicker to consume three ads at the top of the page visually than it is to wait for Alexa to read them out one by one. Right. So that was sort of the pinpoint.
Now voice as a multi modality as one input to still seeing the things on your phone screen or your computer. Great, that’s helpful, I do voice searches all the time, but I still look at the screen, see the ads and the organic results and that’s fantastic. Now where the voice in the past was very restrictive to, on the Alexa was that you had to really program the voice narration path that someone can go through and it was very limited.
And that’s where ChatGPT and these modern voice assistants are much more flexible. You can have any conversation about anything, take it in any direction you want, and that makes it more useful. And as we’re seeing that this is not like on a device that sits at home, this is mostly still done on a device with a screen. And so now we have Search GPT where you’re going to be able to see ads at some point. And you can do the AI overviews from Google and you see ads within that, but you’re having a conversation.
And like you’re saying now it’s actually starting to have a meaningful impact because Microsoft has data that shows that the click through rate is higher if somebody is using the Co-Pilot experience.
And so what’s the reason for that? Well, the reason is that. An LLM, the chat assistant is basically a memory. It is your memory. Then it starts to understand you better than an individual set of keywords or sort of the searches that you’ve done on Google. So it can more appropriately show you, this is the thing you most likely want to get to.
And so naturally the CTR goes up. The more unexpected thing that’s been happening, that Microsoft also is talking about, is that even though people get what they want more quickly, they spend more time with the voice assistant. So they’re like, Oh, cool. Like that’s the running sneaker that I should buy but tell me more. Let’s talk more about running. Let’s talk more about this.
So they’re spending more time with these assistants. And so one prediction for the future that I’m going to throw out there is that the landing page, as we know it today is that, and I think that’s because by the time someone comes to the landing page, it is just to do the transaction as opposed to a, tell me more about this thing.
I already got everything I needed to know from the chat assistant, whether that was GPT or cloud or AI overviews from Google, it told me everything I needed to know, so I just needed to go and find a place to buy it. And by the way, that’s also going to happen soon through actions and through the AI being able to speak to your inventory system and have the person’s credit card information and just, it’s agentic AI. It’s going to do the transaction for you.
So for that reason, I think the landing page is that I also think the keyword as we know it because it’s no longer about that keyword defines what you need. I was in New York a couple of weeks ago and I walked down the street and I saw this amazing sofa in a display window and I looked at it with my Ray Ban glasses on and I was like, hey, I want to know more about the sofa. Then a couple of weeks later I go and do a “search”, but I’m not searching for a specific brand or a specific sofa.
So I’m like, hey, do you remember that sofa I saw in New York? It’s like, boom, in the memory, it knows which one that was and it presents it to me.
But the keyword that I used to get there is completely different from what it was today, right? So it’s no longer about that keyword, fully defining the thing. It’s about that keyword, triggering the thing in my memory, in my digital memory of what I want and it serves it up on a platter and you get high CTR and high conversion rates.
So I think we’re going to see some really major shifts, really interesting ones, but yeah, we need to think about digital marketing very differently because it’s also fundamentally the first time in 25 years that the search experience has changed for the better.Truly anyone you ask, I mean, aside from the hallucinations which are being solved, like it is just a better experience to talk to a chat agent than to go through 10 links on Google.
Josh Baines: I wouldn’t disagree with that. I think there’s naturally a hesitancy for change in all walks of life. And whenever I keep a pulse on significant updates from Google sites, more so towards a traditional, let’s say Google ads manager perspective. I feel that there’s often a natural hesitation or dislike because the changes are coming top down. But that’s just the way that it goes, right?
Its the nature of the beast and the nature of benefiting from platforms that can connect you with billions of people is that they are going to dictate the future of product development.
So I do think there’s kind of a natural, not hesitation, but I think there are some concerns about, or maybe just uncertainties about the direction of travel from which things are going.
But to your point that you made, Fred, I am in agreement with you that I think things are definitely getting better and they’re getting smarter and people are potentially just a little bit too set in their fear of new formats, of a new way of of searching and accessing information. Whereas, you know, five, ten years down the down the line I think we’re going to be in an even better position than we are now.
Frederick Valleys: Yeah exactly! Listen, if you join this industry thinking you would learn one thing and do it for the next 30 years, time to move on and find something else. But it’s also interesting. I was talking to someone and they basically made the point that the number of jobs that have been lost to AI where truly the human has been replaced fully by the gen AI numbers in the hundreds and maybe certain people have not been hired because of it.
Like, we often see the Gen AI is very smart, but it still benefits from human inputs. And like what you talked about, right? What are the right inputs? What are the right outputs? How do you strategize based on all of this? And the Gen AI helps you do these things faster and maybe explore different paths than you would have considered on your own, but there’s still a human in the loop.
So I’m also quite hopeful that we’re going to be able to do so much more. But we need to keep an eye on what is happening, how consumers are behaving. And consumers, ultimately, they want less friction and they want better prices. That’s really the things they care about. And whichever platform is providing that, that’s the way that the industry is going to go.
Josh Baines: So what I’m hearing from you, Fred, is AI isn’t coming for my job, at least not yet.
Frederick Valleys: What’s coming for your job are people who use the AI better than you do.
Josh Baines: Absolutely. Absolutely.
Frederick Valleys: Well, Josh, it’s been a fun conversation. Any final points that you want to leave the audience with?
Josh Baines: Just firstly thank you very much for having me on today Fred. I think we had a very interesting, a few different conversation points there. I think we maybe didn’t fully go down some rabbit holes but I think we certainly dug a few layers deep into that. So yeah, as I said, just thank you very much for the time.
Frederick Valleys: And how do people connect with you, connect with Adthena? Tell us a bit more about that.
Josh Baines: Absolutely. So Adthena, as I think I mentioned at the start. So we’re a competitive intelligence solution. We’re really here to try and uncover a lot of the mystery about some of the things that we spoke about today amongst other things as well.
So, you can obviously find out a lot more about our products and our services on www.adthena.com. And then you can find me on LinkedIn if you want to connect, I’d be happy to speak with anyone as well.
Frederick Vallayes: Yeah. I will put all those links in the show notes. Everyone, thanks for watching. If you’ve enjoyed this episode and you want to be notified when the next one comes out, please hit the subscribe button.
If you’re listening to this on a podcast, we do appreciate the reviews, especially the five star ones. If there’s something you want us to change, you can find me on LinkedIn at Silicon Vallaeys, also on X and Optmyzr is a PPC management software suite. So, if you are interested in that, we do have a two-week free trial. Give that a go. And with that, thanks very much, Josh, for being here. Thanks everyone for watching and we’ll see you for the next one.