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Performance Max could cause Black Friday upheaval

Google's announcement that it would be replacing Smart Shopping with Performance Max later this year could catch many local brands on the back foot if they haven't properly factored the changeover into their Black Friday planning.

Performance Max was introduced late last year to replace Smart Shopping and Local campaigns and will soon be the only campaign type. Google has opted for a phased approach with local advertisers already able to upgrade to the new tool.

However, if no action is taken by Q3, legacy campaigns will automatically be upgraded, beginning in September this year, with completion of upgrades scheduled for the end of the year. And it’s this timing that could catch brands off guard.

“The intent behind Performance Max is to boost online leads and conversions with automated optimisation of budgets and bids across all Google’s platforms. It is designed to enable the discovery of new audience segments, helping brands reach untapped markets, and the added power of advanced machine learning will also help advertisers operate in a less cookie-dependent environment,” explains Solomon Moyo, operational team Lead at Incubeta.

Google believes that Performance Max will help advertisers both large and small realise better results, saying they have seen solid revenue growth from brands adopting the new product.

“Learning how Performance Max works as soon as possible is the best advice we can give to local brands right now. We know this change is inevitable so use this time to get to know how it is achieving its set targets, how it is interacting with targeted audiences, and see if it's matching your business needs. Any kind of machine learning-based system takes time to learn from past campaigns, and this must factor into your planning for the rest of the year. We have been running Performance Max alongside Smart Shopping, gathering information to help us optimise outcomes. The key to success must lie in adopting a test and learn approach,” Moyo advises.

The black box technology will initially look to boost revenue at all costs, and this may need to be tempered with some reality checking – which also takes time.

“Our work in more than 17 countries and across many verticals means we are able to apply a solid breadth of insight to our local campaigns which helps us calibrate the best results. But even so, we are urging our clients to take action immediately” explains Julien Fievez, operational team lead at Incubeta.

The warning becomes all the more urgent when looking at the cutoff dates for campaign migration.

“If you leave it to the last, or just wait for Google to migrate you to Performance Max at the end of September, you will have a little over a month to get to grips with the new environment before you enter the chaos that is Black Friday. You may very well see strong growth in new users and a big jump in demand, but this benefit will also come with the challenge of dealing with added pressure on managing stock,” Moyo says.

Fievez goes on to warn that it is precisely this sort of uncertainty that needs to be worked out without the added seasonal pressures around Black Friday, Cyber Monday and the festive season.

“CMOs need to manage PMax carefully. Because it works across more platforms and it is designed to find more users for you, it will need more budget to keep its results optimal. If you limit it, you are defeating the purpose. While Smart Shopping uses historical data from items in your shopping feed, PMax has a greater reliance on campaign learnings at this stage,” he explains.

This learning phase could create short-term hiccups and Moyo says CMOs will need to alert suppliers that they may not meet merchandising agreements during the initial learning phase.

“There are clear wins to be had with Performance Max, but you must be very careful as to how and when you switch over. Machines need to be trained, and you don’t want that learning phase to be smack bang in the middle of your busiest trading period,” Moyo advises.

Read more: Google, inCubeta

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