Why asking for a long-term forecast for context is a failing strategy

Before starting a promotion, clients are often asked to make a forecast. They want to know in advance what indicators they will receive in a month, quarter, year. It would seem that asking for a forecast is correct: you can find out in advance the cost of a click, the number of attracted subscribers and the volume of sales. And it’s easier to choose an agency: whoever offers more and cheaper, we work with that.

Digital agencies are preparing media plans, but in fact, they understand that the real numbers are likely to be far from the plan.

Let’s see why the forecasts are not very informative, who is to blame for this, and how to evaluate the result of promotion in advance.

Search engines disclaim responsibility

Both Google Ads and Yandex.Direct have forecasting tools: Keyword Planner and Budget Forecast, respectively. But they always work with caveats:

  1. Cost per click and CTR depend on ad quality… For example, the more your headline and text match user requests, the more often your ads will click. While the system does not see a specific ad and its effectiveness, it gives fairly average indicators.
  2. CPC changes based on CTR… If the click-through rate rises, the cost per click goes down. CTR depends on the position of the ad and, as we wrote above, on the quality of the ad, and the position depends on the bid. The bid is affected by the efficiency of the request and the overall budget. The advertised product also affects performance. If a particular company loses to competitors in terms of quality or price, its ads will be less likely to click.
  3. The budget forecast does not always take into account seasonality… New algorithms have already begun to focus on data from previous seasons, but the problem has not yet been fully resolved. For example, two weeks before March 8, no one needs flowers, and on March 6-7 there is an explosion in demand. The search engine forecast will not show this, the agencies lay these risks according to their experience.
  4. The expense depends on the bid management strategy… The more effective an advertising campaign is, the less you have to spend on it. This is influenced by ad position, bid, total budget, request, product itself, its quality and price.
  5. Bids change when campaigns and ads change… It is worth adding key phrases or negative keywords, clarifying the targeting – and the system will recalculate the bid. If one targeting was planned in the forecast, but others were used, the whole picture will change. At the same time, it will not be possible to plan targeting for years ahead. Professional agencies are constantly experimenting and looking for ways to increase the number of applications and reduce the cost per click.
  6. Search Engines Predict Search Adsbut do not take into account impressions in YAN, where the effectiveness of the advertising campaign is at the same level, and clicks are often cheaper. Search engines talk about it openly. Here is an excerpt from Google Help:

    “Keyword Planner is a simple, free tool for creating Google Ads campaigns on the Search Network. It makes it easy to pick keywords, measure the estimated performance of wordlists, and set competitive bids and budget for ad campaigns. “

Forecasters focus on average ad quality values. They evaluate the entire ad pool in a given topic for specific queries and calculate averages. In reality, the agency works with a specific site and product: they may differ from the standard of advertising systems.

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Both Direct and Google Ads, distributing ads by position, conduct auctions. Campaigns for the same keywords compete with each other on price and ad quality.

Google says there are many factors affecting auction success. The main ones are ad quality, keyword CTR, account history, landing page quality. True, it is impossible to know what weight each indicator has in the auction. Direct uses a similar approach.

How to predict: four life hacks

In our work, we use forecasts, but immediately tell the client that we are not ready to guarantee the achievement of the indicators, and explain how we can rely on these figures. Here’s what you can do to build a more accurate plan:

  1. If you have experience in promoting in the topic, you can adjust the forecast of search engines taking into account seasonal factors and the level of competition.
  2. Request information from search engine managers, they prepare industry analytical reports. They may contain information about the total number of advertisers, the dynamics of costs and traffic volumes, the distribution of costs by devices, sites, types of advertising formats, etc.
  3. Assess market capacity, level of competition and overall campaign launch potential. To do this, it is enough to know the forecast rates, the total volume of traffic on requests. In this case, you need to understand that these are general figures.

    For example, a client turns to us who knits hats. He wants to launch contextual advertising. We have no experience in this segment, so we forecast the market capacity.

    The hat costs 700 rubles, the cost price is 300 rubles. Income – 400 rubles.

    We will make a forecast for targeted requests: in this region, 250 people are looking for such hats per month. The competition is high due to marketplaces and big brands. One click is about 150 rubles. We tell the client that contextual advertising will not suit him. The forecast is inaccurate, but it helps the client to correctly assess the situation.

  4. Launch test campaigns. This is the most reliable option for checking search engine predictions and making a more accurate plan.
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How to get an accurate forecast

To get a forecast that is as close to reality as possible, you need to run a test campaign with a small budget. This will get you real bids, real users on the site and see the conversion rate.

Another option is to launch advertising campaigns in full, and in a month and a half, return to planning for a month, six months or a year. In this case, the chances of getting real results at the exit will be high.

A media plan before launching campaigns is a good way to roughly plan your budget, but you shouldn’t expect exact matches in terms of numbers. This is always a rough forecast. While working, a professional agency is constantly looking for options on how to reduce the cost of advertising, experimenting with targeting and bringing new solutions to the client.

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