Automatic Matching: An ROI Update

Like anyone trying to make a living in the SEM world that is the Googleshpere, it pays to keep up to date on how Google's AdWords system changes & evolves over time. This is especially true in the last 2 years as Google has increased the pace of change and at the same time been less explicit as to the nature of and motivations for those changes.

While the big G's recent announcements on Quality Score changes and Google Suggest have been getting most of the coverage lately, the SEM Laziness Tax Google's been working through beta since February is still relatively undiscussed and unknown.

In an effort to keep up to date on the Automatic Matching beta, I scoured pretty much every single corner of the blogosphere and uncovered a grand total of two anecdotes on ROI from advertisers who've been in the Automatic Matching beta. They are as follows:

1) A commenter on an SEO Speedwagon blog post summarizing Automatic Match gives a 3-line summary of ROI: "My conversion rate dropped from 10.5% to 9% and my cost per conversion increased by almost a dollar. I just turned this "feature" off today. It's a real money waster." Thanks EdG, whoever you are.

2) Jim Gilbert & Mike Churchill over at SEM Clubhouse give a great ROI analysis of pre- and post- Automatic Matching ROI. Summary:
a) Adgroup spend increased 600%
b) 88% of all clicks were from Automatic Match and "only 12% were from the actual phrase match keyword."
c) 4 out of 5 Automatic Match clicks came from keywords they consider to be not relevant, making the Effective CPC much worse in their case.

Because Google chooses not to make crystal clear to its advertiser base the extent of this 'beta' (# of advertisers or % of total advertisers please?), and because this appears to be an opt-out feature (clarity on that, puh-lease?), we in the SEM community need to do the legwork and get the word out so that we can make more informed decisions for ourselves and our advertiser customers. That said, I hope you benefit from this scouring of the 'Net to find out what Automatic Match means for ROI. Likewise, if you know of any other ROI anecdotes, please post them in the comments section.