Paid search, whether Google or Microsoft Ads, is a channel that powers many businesses. The ability to target individuals by the keywords they are searching, layering on geo targets, demographics, type of device, and more offers a powerful tool for the marketer.

Both Microsoft and Google Ad platforms have continued to evolve in the race to draw marketers to their platforms. In today’s post, we’re going to explore four predictions for 2023. You can use them to proactively prepare your business accordingly for the future paid search playing field.

  1. The power of first-party data will continue to grow.

There will be two kinds of marketers: Those with first-party data and those without. We saw this in 2022 as companies, such as Meta, made changes to their privacy policy. 

Marketers will not be able to rely on the massive amount of data the platforms have at their disposal. Therefore, paid search performance will be positively correlated with a company’s ability to leverage its first-party data such as website analytics. New companies trying to enter markets without first-party data will see their costs increase dramatically as they will not be able to leverage features that were previously available. Google, similar to Meta, will remove the ability to create “similar to” audiences (i.e., “Look alike” audiences in Meta). The data will be behind the scenes, although marketers will not be able to segment their audiences as they had previously.

  1. Automation, automation, and more automation.

We predict that automation will be more prevalent in Google Ads and Microsoft Ads. The platforms will continue to remove certain features in the name of automation. They will inform advertisers that AI will do it better, faster, and more efficiently. 

Marketers may have to sacrifice short-term results (efficiency of ROAS or CPL) in order to properly train the automation features of platforms. We recommend allowing a minimum of a two-week window to allow automation to learn. It is also best not to do this during peak sales times such as flash sales or holiday sales where the volume is outside of the normal range you would see during a regular day.

Note: Stay tuned for a more detailed post in March on the power of automation in paid search.

  1. Copy will be even more critical to success.

Paid search platforms can automate tasks such as bidding. But they still require human input on copy — which means the marketer who understands their customer best will ultimately win. 

Marketers need to make sure that their copy:

  • Addresses not only the customer looking for the product or service but also their mindset at the time they are looking for it;
  • Stands out from the competition in a way that attracts the right customer for your business in the short and long term;
  • Is delivered in multiple ad formats in a logical sequence that brings the customer to your business as cost-effectively as possible.

The marketers who measure the effectiveness of their copy, rotate in new copy, and leverage creativity will have a competitive advantage over those who stick to automated recommendations alone.

  1. CPCs will continue to increase, forcing all advertisers to look at attribution.

Over the long term, CPCs have only trended upward. One study demonstrated that CPL (cost per lead) increased in 91% of industries in 2022 and that this was driven by a significant increase in CPC.

It’s (almost) guaranteed that CPCs will rise in nearly every vertical in 2023. In turn, marketers will need to get even more creative to generate results. They could look into building cost-effective audience pools to retarget through display and video efforts, for instance. Leveraging PR and partner companies is another way to drive cost-effective traffic to your website via paid search. 

Planning for success on paid search

Knowing that paid search platforms are going to change allows the marketer to get ahead of the curve. Taking the time to plan the future strategy of paid search and how it fits in your marketing funnel will keep you a step ahead of the competition.

For questions on paid search and how Mindgruve can help you please fill out the contact form.