With three months behind us since Google introduced major changes to Google Grants, the philanthropic arm of AdWords, the long-term effects on account performance are now becoming apparent. Sadly, they’re not to nonprofits’ benefit.
First, some background: Google Grants is part of the Google for Nonprofits program, which allows registered 501(c)(3) organizations to take advantage of a handful of Google products at reduced rates or no cost. While the Grants program provides nonprofits with in-kind pay-per-click (PPC) advertising through AdWords, it comes with a few limitations.
Before Google’s changes to Grants, nonprofits could run keyword-targeted text ads on Google.com, limited to a maximum cost-per-click (CPC) bid of $1 and a max daily budget of $330, or $10,000 per month. Google also provided organizations that consistently met the $10,000 per month spend an opportunity to apply for GrantsPro, which raised advertisers’ max daily spend to $1,330, or $40,000 per month. As of this writing, Google still honors existing GrantsPro accounts, but is no longer accepting new applications for the program.
On January 28th, 2013, Google changed Grants in two major ways. First, the maximum keyword bid was doubled to $2, which created quite a bit of excitement among Grants advertisers. Second, in order to “balance the interests of businesses who pay to advertise on Google search,” as Google said in an email to Grant account owners and admins, the PPC auction format was altered so Grants ads will always appear below paying advertisers’ ads. This second change caused widespread concern that Grants advertisers would lose the ability to appear in coveted top ad positions, particularly for competitive keywords.
Based on the trends we have seen in clients’ Google Grants accounts here at 90octane, the fears many marketers and nonprofits had about the changes seem to have been well founded. In general, we have seen clicks increase in cost, while average ad position has declined. Also concerning is that as average CPCs have risen, the number of clicks advertisers are able to receive before hitting the daily maximum spend cap has been cut nearly in half. Overall, Google Grants advertisers are now able to get about half the clicks for the same cost, with a lower average ad position, than they were prior to January 28th.
Below are two charts illustrating the effect the program changes had on two clients’ Grants accounts in terms of click levels and average CPC. These clients were selected for analysis because they have both consistently met the maximum daily and monthly spend, but have different targeting settings and keywords. In both cases, we see a huge change in performance almost immediately after January 28th.
For Client A, average CPCs ticked up slightly but remained fairly flat for approximately a month following the change, due to a strategy of very slight increases in CPC bids at first. Their click performance, however, became extremely volatile after being mostly flat for months prior. By early March, when most of Client A’s keyword bids were raised to $2 to better compete with other Grants advertisers, we saw average CPCs nearly double, from less than $0.80 before January 28th to about $1.40 by the end of April. Clicks started to level off, ranging between about 1,000 to 1,200 per day in March and April, but down from around 1,800 clicks per day in January. Overall, Client A experienced about a 73% increase in average CPC and 41% drop in clicks from January to April.
Client B’s account tells a similar story. Before the Google Grants program change, average CPCs hovered under $0.80 while click levels varied, hitting between around 800 and 1,800 clicks per day. Unlike Client A, Client B raised their keyword bids to $2 almost immediately, with apparent affects starting in early February. Like Client A, Client B’s average CPCs nearly doubled, hovering between $1.40 and $1.60 over the past three months. No longer as volatile, their click levels dropped overall, hitting a maximum of between 800 and 1,000 per day. Since the change, it is no longer possible for client B to reach 1,600 to 1,800 clicks per day as it had in January. For Client B, this represents a 105% increase in average CPC and 37% drop in clicks from January to April.
However, clicks and cost are only a part of the story; Google Grants advertisers have also seen a decline in average ad position. Using Clients A and B as an example here once again, we can see that Client A’s average ad position declined from 3.48 in January to 4.08 in April. Client B also saw declines, though much less drastic, dropping from 2.69 in January to 2.91 in April.
Unfortunately for these clients and many other Google Grants advertisers, it looks like the changes to the program are here to stay. While some Grants advertisers may now be able to appear for keywords previously out of reach with the $1 cap, the detrimental effects on clicks, cost and ad position likely outweigh that benefit.
The question, then, is what can be done to optimize Google Grants account performance with these new challenges in mind? Stay tuned – we’ll tackle that topic in part two of this blog series.