The New Year is just around the corner, and with it will come a number of new realities for marketers. In 2024, we expect to see plenty of interesting factors that will shape how companies manage and deploy their SEM budgets: elections and economic anxiety, increased competition, and changes in Google Ads technology will all play a big role in how efficiently and effectively brands spend and scale their SEM programs.
As we all prep for a new year, these are ADM’s top SEM predictions for 2024:
Macro Trends May Make It Harder to Remain Efficient
Most companies are thinking about growth in 2024: scaling spend, revenue, customer acquisition, and all the other nice things. But it seems likely that macro trends in the economy will heavily weigh into budgets as the year progresses. Messaging around the economy is discordant: there is widespread anxiety, but also strong indicators. Black Friday sales jumped more than 7% this year compared to last—with a record $9.8 billion of that coming from eCommerce.
Budgets for 2024 need to account for increased competition plus incremental scale and growth. As spending increases across Google Ads and once-new tools like Performance Max achieve universal adoption, brands will need to invest more than ever in a strong SEM team that can maintain the efficiency and health of their SEM program. They will also need to move quickly to learn and deploy the next wave of updated tools and techniques while they still represent a competitive advantage.
Economics and Competition Will Make Discounts More Important
Despite strong economic indicators, many consumers do report anxiety about the state and future of the economy—and as previously mentioned, early findings from this year’s Black Friday season strongly indicate that shoppers may be becoming more hesitant. Combine that with growing competition and brands may end up looking for any differentiator they can find. Expanded Black Friday sales, Amazon’s Prime Days, and other retailer-specific sale periods will force brands to compete on price, at least to some degree.
If you’re looking to grow your SEM eCommerce revenue in 2024, an appealing discount strategy will likely be necessary. That means not just running discounts, but ensuring that your Google Ads campaigns make them a central focus by including them across relevant assets, like sitelink expansions and image ad overlays. It may also be wise, if the discounts are driving success, to take a long look at sales and offer-focused keyword campaigns (we described how to do this in our Black Friday tips blog).
Google’s Push Towards Automation Will Continue to Redefine SEM
It’s no secret that automation has been a massive trend in digital marketing for the past few years. Google’s Performance Max campaigns and recently-released Demand Gen campaigns are slated to replace Dynamic Search Ads and Discovery campaigns (respectively). While the new campaigns are highly-effective, they don’t offer the same level of advertiser control as what they’re replacing. As Google continues to push towards automation, it redefines what levers advertisers can pull to dictate their clients’ success.
This leads us to a question about keywords: Could 2024 bring the beginning of the end for Phrase Match keywords? We’ve already seen Modified Broad Match go away—a slow march to just Exact and Broad seems inevitable. Broad really leans into Google’s AI by matching millions of queries to a single keyword and assessing which query will reach that campaign’s goals the best. Broad match apparently gets ‘smarter’ over time and works best with smart bidding strategies. In ADM’s experience, when Broad and Phrase match are paired in the same ad group, Broad will cannibalize the Phrase match traffic, and it wouldn’t surprise us to see some indication about the future of Phrase Match in 2024.
Audience Segments Will Be Essential to Your Funnel
Another way Google Ads has been evolving is the creation of campaign types that are designed to round out the full advertising funnel. With the emergence of Performance Max, Demand Gen, and whatever other automated campaign type that will come next, we believe that understanding and utilizing Audience Segments will become essential for advertiser success.
While Google has essentially eliminated the need for audience targeting in Search campaigns that utilize automated bidding strategies, these newer campaign types also rely on AI to make targeting decisions—but are giving advertisers different ways to provide them targeting guidance. This is because these new campaign types are trying to serve different ads and experiences to different users across various stages of the marketing funnel. Knowing how to segment your audiences and take advantage of features like Performance Max’s new Search Themes will go a long way for advertisers.
Attribution Modeling Will Be a Major Focus
Attribution has been getting more difficult for some time now, and in 2024 it may get even harder in light of third-party cookies going away. This directly correlates to spend, because advertisers who cannot prove that their efforts are driving revenue will struggle to get buy-in. That means attribution modeling will be more important than ever in the year to come.
We recommend advertisers take the time to learn about different attribution models and be willing to compare their campaigns’ performance across different models for a fuller understanding of what is truly driving performance. Those who can most closely align their campaign performance with their bottom lines are the ones whose budgets will be able to scale effectively in 2024.
ADM’s Director of Data and Analytics, Isaac Uloko, offers this advice: “The number one thing to do is to find a way to start collecting first-party data. The more data you have, the richer you are.”
Gearing Up For a New Year
Looking ahead to 2024, macro trends will shape ad spending. Fluctuating economy, luxury brand challenges, and SEM competition demand careful budget considerations. Automation raises questions, but adapting to evolving attribution modeling is crucial. Offering appealing discounts is key for ecommerce growth. It’s vital that advertisers stay informed and adaptable for success in digital marketing. For help with your digital marketing plan in 2024 and beyond, don’t hesitate to reach out to the ADM team for advice or an audit.