UNPACKING THE BLACK BOX: GOOGLE AND FACEBOOK’S MOVE TOWARD AUTOMATION – podcast transcript

Jessica Kingman
Hello, everyone, and welcome to The Richards Group Digital Trends podcast. I’m your host and Digital Strategy group head, Jessica Kingman, and in every episode I’ll be diving into one of our 10 Digital Trends for 2020. Today, I am talking with SEM planner, Conor MacDowell, and paid social planner, Ann Peter, about their trend, Unpacking the Black Box: Google and Facebook’s Move Toward Automation. Hi, Ann. Hi, Connor.

Conor MacDowell 
Hello.

Ann Peter
Hi.

Jessica Kingman
So, just talk to me at a really high level. Tell me about your trend of unpacking the black box and why advertisers, clients, brands should care in the next year.

Conor MacDowell
Sure, well, for Google specifically, it’s been a trend happening over the past few years. That started off with their bid strategies, going to more of an automated model. Lately, as of this year especially, we’ve seen a lot of their ad platforms shift to that where we’re actually as an agency losing visibility into where ads are showing, how the bidding occurs. And we’re noticing this happening more and more. So it’s obviously a trend where we’re trying to identify why this is happening, where this is happening, and how can we best utilize these spots to still drive efficient media. But at the same time, where are we willing to take these risks and with which clients and really just strategizing around all that. From a Google perspective, that’s where we’re coming from, and I know social is seeing a lot of the same trends.

Ann Peter
So, on a high level, I think both platforms are trending toward automating their platforms. With two things in mind. One is to simplify. I think part of what makes these platforms more accessible now than ever is that it is way easier to answer questions of where should my ad be shown? How much money should I spend? We get that question quite a bit at the agency. So second implication is to not just make it more accessible and to simplify, but the ideal is that it becomes more efficient. I know it’s kind of a buzzword that we use in the industry. But how can we get the best results possible under the least amount of budget? So long term? Yes, we’re hoping this leads to different types of efficiency within both platforms. But then the drawback is we are definitely getting less visibility within Facebook and Google how they’re spending and why.

Jessica Kingman
Let’s take a second, and break down Google and Facebook because they are really kind of what we call a host of different companies. Right? So, Connor, what really encompasses Google when we talk about that? And same question for you, Ann, what encompasses Facebook when we say that?

Conor MacDowell
So, when I speak of Google properties, it’s not just the Google search results page and YouTube – it’s really their entire portfolio of offerings, whether it be the Google Display Network, whether it be the Google Play Store, Google Maps, and really everything that those encompass. So there’s billions of impressions within those, and that’s kind of what we’re talking about when we discuss Google.

Jessica Kingman
And YouTube as well. Right?

Conor MacDowell
Yes.

Jessica Kingman
Ann, what about you when we talk about Facebook?

Ann Peter
So, I think it’s a misnomer when we say Facebook because I include the laundry list of places outside of just what we think as the feed within Facebook. So if you decide to purchase media within Facebook, that includes kind of the big three: Facebook, Instagram, Audience Network. Audience Network is tied to Facebook, but based on third-party apps that they have purchased media from. So I would say it’s about equivalent of where you’d see display ads. Not exactly banner ads, but pretty similar and how those ads are being placed and kind of shared among other parties. A lot of times the recommendations that we get internally through our reps is that we should always use what we call mixed placement. So all that means is that you’re serving ads in multiple placements outside of just the feed. So that might include Instagram stories, that might include the right-hand side of the Facebook app, that might include the feed, that might include what they call marketplace. There’s a laundry list of places that you can technically purchase media through beyond just the feed, which is the most common way that we typically advertise within paid social.

Jessica Kingman
Yeah. And I also want to just level-set of why Google and Facebook are really the two that we’re focused on, like, what is the importance of those two, especially when we think about media plans for our clients?

Ann Peter
So I think that tactically, they’re one of the most powerful platforms digitally that you can purchase media from. And part of that is, one, the targeting capabilities, they’re unparalleled compared to almost any other digital channel. And a lot of that, part two, is because they both leverage machine learning. So what that means is beyond just finding the exact audience at the exact right time, you can find people that are likely to take that desired action. So let’s say, for example, we get approached by a commerce brand. They want to find people that are likely to purchase, let’s say, T-shirts. So we won’t just find people that are in-market to buy T-shirts, but the platform can predict, are they likely to buy something based on the targeting and the optimizations that are available? So it definitely is a little bit more technically nuanced outside just finding the right audience. It’s also making sure that we’re including the right tactics, right objectives. And get even more complicated when we think of, are we necessarily tagging things that are happening outside of the website, of the client’s website, all those things are now possible within both platforms. So a lot of it is using not just the right audience, predictive modeling to find people that are likely to take whatever action that business is interested in.

Conor MacDowell
Yeah, and to take a step back even from that, is these are obviously the two biggest platforms. And I think even before all this, they have taken steps toward becoming the walled gardens that they are now where they’re no longer sharing data outside. So it’s you can’t see any post-impression data, you know, they’ve taken away all attribution modeling from their own platforms. So, really, they’ve become these walled gardens and now they’re even further, further, and kind of that privacy within each channel. So I think that’s another issue why we’re focusing on this is because not only are they the biggest, but we continue to see this move away from transparency on both of these monster platforms.

Jessica Kingman
Conor, I want to start with you and talking about Google Local ads. If you don’t mind, just what are Google Local ads? And why do you see brands starting to use them?

Conor MacDowell
Sure. So Google Local ads are an offering where brick-and-mortar store locations can use their Google My Business listings to essentially drive store visits. And the way Google implements this is it takes the store listing, and then it will create an ad to run across Google search, YouTube, GDN, Google Maps as well as the actual Google My Business offering as well. The issue we’re seeing in the black boxing of this product is really the fact that we lose all transparency into where these ads are showing. So what we do is when we set up the campaign, we put in the few display assets, some text creative, and a video. And then Google just optimizes based off of a variety of metrics that they, really, a variety of demographic data that they deem the user will become a visit. And we lose all transparency in that. So, as you can imagine, this somewhat causes issues, especially with as much as we know, over the past few years, the brand safety concerns we’ve seen with YouTube, we no longer get visibility into those placement reports. So losing that visibility, we’re kind of putting some trust into Google that, yeah, we’re getting the most efficient store visits possible, but at what cost? And are we willing to take kind of that risk? I hesitate to say risk, but really it is that risk to drive those efficient store visits. Because we’re trusting Google to just display our ads based off, across these five Google platforms, on what they deem is the most likely user to convert.

Jessica Kingman
So, within these local ads, are we no longer really setting that target audience? We’re kind of putting that target audience into Google’s hands?

Conor MacDowell
Yeah, I think that’s a very accurate statement, we are no longer able to define through affinity or in-market audience targeting who our audience is. Google’s using a combination of behavioral, location, and just, you know, overall demographic data on who they think is going to visit and have taken that out of the control of the media planners.

Jessica Kingman
How does that affect your day-to-day? And you know, one of, I think, the roles that we look to media planners for is to help us define what is an actionable target audience? So what does taking away that control affect? Or how does that affect your day-to-day?

Conor MacDowell
So I think it’s important to look at it in the sense of it’s a channel, it’s a tool for us to reach our KPIs efficiently. I think we look at it in this context of the overall campaign. Does this make sense in the context of this? Do we also want to drive search on top of this, even though Google Local ads has a presence in YouTube. Do we still think there’s some upper funnel awareness of value in that, and I think understanding where something like Google Local ads fits into the overall media plan to help us achieve our goals is really where we’re still showing our value. And we’re really needed still. You know, Google Local ads are not going to be for every business, if you’re running a branding campaign on an awareness, more upper funnel. Just understanding what are those channels that within Google that best operate within that? So I think, you know, overall, I think we’re always going to be, there’s always going to be that human element there. And just understanding where and when to implement these more black box solutions into our media plans.

Jessica Kingman
I want to talk to you, Ann, about Facebook’s campaign optimization and talk a little bit more about what that is.

Ann Peter
Yeah. So historically advertisers controlled spend by audience segments. So, for example, if I want to adjust daily budgets for someone that was a fan of the Facebook page vs. someone that watched video views organically, I could do that. Campaign budget optimization stops that manual control, and we control now on the campaign level. So it’s going to look at your host of audiences that you have selected, and choose to funnel spend that way. And so the theory behind using CBO is depending on whatever the end goal is, whether that’s, for example, purchases online, lead gen sign-ups, traffic to the website, reach, etc. It’s going to find people that are more likely to take that action, whatever it is that you’re programming that tactic to, whatever seems most appropriate. So it answers a lot of questions that we get within media, how much should we spend, and where should we be spending. And it all prioritizes it for the sake of efficiency to make sure you’re getting the most out of your budget? Couple of drawbacks of this. When we use campaign budget  optimization, it’s only going to look at that initial goal that you set and nothing more. So let’s say, for example, the easiest one-to-one example is probably online donations or online purchases. Let’s say, for example, we have two separate audiences, target A, let’s say they have a ROAS of $2. And our second audience they might have a ROAS of $1.50. Well, we might think that check, we should definitely put more budget toward the audience that has a $2 ROI. That makes sense, if you’re more profitable, right? Not necessarily, because let’s complicate this scenario, let’s pretend that target B, the audience that had $1.50 ROAS, let’s say, for example, they saw more recurring purchases. So the longtime or the lifetime value of that target audience is actually higher than that audience that’s showing a $2 ROI. On the advertiser perspective, we might want to force more budget toward that second audience, knowing the projected lifetime value for that business will be higher. But CBO will not take into account of that distinction. It’s only going to look at that first-time purchase and say, “Oh, it’s $2 ROI; we should definitely put more budget here.” And so that’s where it sometimes can hit a roadblock. It’ll simplify it, which is great, easier for small businesses to kind of pick it up and manage day-to-day budget, but in terms of anything more complex, definitely need a media planner to kind of dictate how we should be building, how we should be spending, because there are tactical things that we can do with the media to make sure that we’re taking into account those kind of variables.

Jessica Kingman
And I’m 1,000 years old – what is ROAS?

Ann Peter
Return on ad spend.

Jessica Kingman
Thank you. And you both talk a lot about why these ad products are great for efficiency. But for a lot of our clients, you know, efficiency isn’t the only goal. So how do you kind of balance these black box ad products with other kind of goals that a client may have for their media?

Conor MacDowell
I think this is kind of the crux of this whole conversation is, this is where the media planner comes into play. And it’s never going to be the same answer twice, right? So we’re always going to have to evaluate our clients’ needs, what we have available, the tools we have available at our disposal to reach those goals. And I think, you know, it’s just a matter of having that expertise on your team and understanding where to best implement our strategies.

Jessica Kingman
You both talk a lot about the algorithms that we’re relying on for both Google and Facebook. And one of the biggest concerns that we’ve seen around algorithms and machine learning and AI recently is the inherent bias that’s built into some of these pieces of technology. Do we know if there is bias behind the algorithms that are really driving these platforms?

Ann Peter
No.

Conor MacDowell
I mean, that’s true.

Ann Peter
We are putting, again, blind faith in the system and hoping that it’s targeting the right people at the right time, to have the right intent. But a lot of it is trust. As advertisers, we have seen results in real time, and I think that’s a way to verify. But in terms of how much you control the campaign, absolutely not, not compared to traditional media.

Jessica Kingman
I kind of, as I was reading through your trend, I kind of had these, like, bigger, more existential questions about Google and Facebook, and I know you guys aren’t Larry Page and Mark Zuckerberg, but I just kind of want to, I want to chat a little bit. And to me, the lack of transparency, you know, it kind of hits you in the gut, right? A little bit of “Oh my gosh, we get all of these data points from these providers.” And now we don’t really get that much. My question is, why would Facebook and Google do this?

Conor MacDowell
Yeah, I mean, especially at a time where they’re under intense scrutiny for their YouTube placements. You know, I think that’s a great question. And I really think it is because, you know, I want to think it’s because they don’t have the tools yet to import that, and maybe in the future, we will see that, where I will be able to run a full Google Local ads campaign and get the full breakout of each channel. I don’t think in its current iteration Google Ads is able to report on that. And, you know, maybe that’s naive of me to think that it’s just a technology issue. But I think Google is also kind of trying to say, it really shouldn’t matter where they run, right? Again, it all goes back to efficiency. It’s, if this is your goal, and you want to just drive store visits, this is going to be the best way to do that. And what does it really matter if you got a million and a half impressions on the video vs. 3 million on the display unit. I think what they’re trying to say is, we have developed these new tools based off of, you know, your goals. And to Ann’s point at the beginning, is they’re really trying to simplify this to make it accessible for the common advertiser who comes in, who’s just like, essentially, a mom-and-pop shop, who are trying to start their own campaign. And they don’t want to overcomplicate it, they don’t want people to overthink that. I think that’s one takeaway. And, you know, my second point on this is that I think it’s also because Google understands that budgets are structured, they understand that we get budgets by digital video, we get search budgets, we get display budgets. And by eliminating that view, they’re essentially saying, don’t segment your budgets out like this, give us the money and we will, you know, obviously serve your ads where they’re most likely to get those visits. So it’s almost they want to take away the, you know, the budgeting or the billing or the ATBs that go behind each and every channel. And they want to lump it all in so that Google can have access to all those ad dollars.

Jessica Kingman
So we’ve been talking a lot about the black box from an advertiser and a brand standpoint. But I think the other side of that black box is the user. So I’m interested in your perspective, do you think that people or users are beginning to understand what data is going into Facebook and Google? And do you think that there are bigger privacy concerns about how these platforms are leveraging people’s data?

Ann Peter
Well, I will say, within Facebook, they are definitely under scrutiny right now. So they’ve been releasing, actually, in the past year and a half a bunch of privacy updates in the platform where, for example, as a user, you can actually opt out of what we call pixel data altogether. So whenever you go to a website, there’s a small little code that follows you around and lets you know and informs the business and by default, then, the agency that they might be working with, what they’ve done, what websites they’ve visited, did they buy something, did they add something in their cart, did they sign up for a lead form – all those things are now trackable. You can choose to opt out, but the problem is, I almost wonder if they’re taking advantage of the fact that people don’t know that you can opt out of that type of tracking. And we are definitely seeing some moves to be more GDPR-compliant within Facebook, Instagram.

Conor MacDowell
Yeah. So it’s kind of against the grain of what we’ve been saying this whole time, as while we are losing that transparency into the ad side, the common user is gaining transparency into what these companies know about them. And it is in direct response to GDPR and the California privacy laws. And Google is doing something similar, where now you can log in to your settings and see exactly how Google has you categorized; you can turn off certain categorizations, you can turn off tracking all together. And they’re also moving away from the cookie-based tracking that Ann was discussing and going to a user-based model, which means users have to be logged in. And if you think about it, going back to all those different properties that kind of make Google. Users are logged in to a variety of different platforms, whether it be YouTube, Google Maps, you know, Google searches, overall, Gmail.

Jessica Kingman
Yeah. Moving back to kind of the placements that we’ve been talking about. And you mentioned the plus side, right, the rosy kind of lenses of that Google and Facebook are putting on them. It’s like, “Hey, it’s great for, you know, small businesses, you guys don’t have to have your hands on the dials all the time. And so you can focus on higher strategy questions.” I’m a pessimist, and my question is, like, do we think that this is just a strategy from these two companies to get ad dollars spent and less-than-prime inventory?

Ann Peter
I will answer at least the Facebook side; I know Conor has thoughts. I will say the placement I am skeptic of the most is Audience Network. And main reason why is although, yes, there are brand safety measures in place. For example, we can download a full list of inventory that’s available within an Audience Network. We can’t control where it’s necessarily serving and how often; we don’t get those kind of visibility and reporting. Other issue is that, let’s say we have a huge programmatic buy, in other words, banner ads. Technically, if we bid on Audience Network at the same time, we’re now competing against our programmatic partners. So, definitely, there are some drawbacks. And isn’t that most of the times we will get recommendations to use audience networking possible, but that isn’t always best practice, at least in paid social.

Conor MacDowell
Do I think Google made these changes so I could go back to being more strategic? No. With that said, it does allow me to be more strategic, but I think really what they’re doing is, it’s not lower-quality inventory, I would say. What they’re actually doing is Google is monetizing more of their inventory. So you can see this on YouTube, now they offer home feed ads. So these are essentially automatic-play videos that go when you just log in to your YouTube mobile app and scroll through that home feed, you’ll see ads on there now. So this is yet another placement that they’re monetizing. So I think these are different ways for them to monetize their several different channels. But I don’t know if it’s, I would say, necessarily lesser-quality placements. I would also say that because I don’t know, again, we lose that visibility. So these all go back to the questions of, you know, what is the next iteration of this black box on both of these channels? And the answer is, really, we just don’t already know.

Jessica Kingman
Yeah, so we’ve talked a little bit about brand safety and the concerns that we may have there. My question now becomes, what is holding the systems accountable? What is keeping it in check when something runs afoul of these brand safety guidelines that we’ve put into place?

Ann Peter
At least in the context of Facebook, Instagram, there are ways that as an advertiser we can enforce brand safety control. So, for example, we did talk about the example of requesting a full inventory list before we advertise on Audience Network, but we can take it a step further, and we can blacklist certain sites that we don’t want our ads to appear on. If, for example, something happened where it appeared on a placement that we have specifically asked to not show creative on, we can technically ask to make-good and potentially partially get refunded for those placements we did not choose to bid on, but, for the most part, because we have, still, control of what placements we want ads to be shown on, that should almost never happen. If it doesn’t, that’s probably a reflection of whoever the planner is not doing a full inventory check before they set it live.

Conor MacDowell
Yeah, on the Google side, we can actually upload a blacklist at the account level, so wouldn’t be at these specific campaigns, it would be overall the account websites and YouTube channels we don’t want to run on. Again, we lose that transparency at the campaign level. So I can’t actually see if those are being implemented. Our Google reps say they are, and I take them at their word. Should I – I’m still trying to determine that, but yeah, so we are able to curate that blacklist to ensure that brand safety for our clients. But also, you know, again, this is where the media planner comes into play that we are having eyes, that we’re going through and checking, and making sure, you know, that everything is appearing, you know, going through websites, going through YouTube channels, obviously, we can’t do it the tens of thousands of times that our ads are showing, but at least to do a quality check and a gut check on our campaigns. And I think that’s really one of the keys to ensuring, you know, brand safety and everything that goes into these is operating as, as advertised, no pun intended.

Jessica Kingman
So I want to just wrap this whole thing up for you to mention that you think in, you know, the next five years, ten years that this automation will really be kind of the primary mechanism for Google and Facebook. And I think it begs the question, what then becomes the role of a paid search and a paid social planner in the next five to ten years?

Ann Peter
I think that you will still need someone to kind of dictate what those parameters should look like from a tactical standpoint, because even if day-to-day budgeting, targeting, placements, that all becomes automated, you would still need a human eye to look at it, plug it in the engine, and look at reporting, and still have an expert opinion on how to interpret those results. I think especially because they are pretty nuanced in, at least from a technical standpoint, you definitely need someone to kind of interpret those results for you in a different way to look at them.

Conor MacDowell
Yeah, I think it really just comes down to expertise. I think it’s, do these channels make sense? And where do they make sense? You know, Google has so many different offerings now that you can really take bits and pieces of each to really make everything work as optimal as possible for your clients. And I think that’s where we’re going to beat, play a bigger role. Yes, search might become more automated. Yes, YouTube might become more automated, but it’s how much and where do we pull these certain levers to put everything in optimal position for our clients?

Jessica Kingman
Awesome. Well, to read more about Ann and Conor’s trend of Unpacking the Black Box, as well as other trends we predict will make an impact in the advertising landscape in 2020, please go to trends.richards.com. Ann and Conor, thank you both very much.

Both
Thank you. Thank you.

 

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