One of my favorite companies is Visa. It’s right up there with Gillette, Coca-Cola and Honda as an example of a company selling products that people want and need, day in and day out. After all, who doesn’t need a credit card? What would you think, though, if I told you that Visa was launching an opt-out feature whereby Visa’s algorithms would look across its customers’ credit card accounts to find customers with unspent credit limits? Visa would then automatically buy products and services for those customers (based on their previous buying habits) with the goal of spending the remainder of the credit?

Obviously, Visa would never do this. After all, they’re a publicly-traded company and are growing just fine. Taking such a move would be corporate suicide, as consumers would migrate in droves to MasterCard, American Express and Discover Card.

As strange as it may seem, Google – whose customer base has no similar alternative – is beta-testing a feature in AdWords that does just that. “Automatic Matching”, as it’s called, is a feature whereby Google’s AdWords system finds accounts where budgets aren’t being fully spent and then automatically matches ads in those accounts to additional “potentially relevant” queries in order to spend 100% of the budget.

If you’re getting ready to label me a Google-hater, hold off on unleashing the hounds. I think Google is a pro-consumer company whose existence has allowed more of the world’s people to do more things with information than any other entity in human history. Google has also been a boon to advertisers, introducing a marketing meritocracy that rewards advertisers for fulfilling consumer intent and punishes companies who run afoul of the searcher’s goal. Looking more broadly, Google’s application of scalable math and automation to online marketing has set the stage for a future in which all of online & offline advertising – the last major inefficient market – will become efficient, thereby driving the global economy forward and improving lives worldwide in the process. Free at last, free at last.

Homage to the ‘Plex having been made, “automatic matching”, which is currently in its second beta phase, is frankly an SEM laziness tax and smart marketers should, well, not be lazy.

Match types are different types of ad-to-query matching that advertisers can use to control how narrowly or broadly their ads are exposed to traffic. Typically, advertisers make use of multiple match types (“exact”, “phrase”, “broad” and “negative match”). “Exact match” ensures an ad shows only when the exact keyword or keyword phrase is searched for; “phrase match” shows ads for the exact phrase as well as variations of it; and “broad match” is the broadest option as the name implies, matching your ad with the exact keyword(s) as well as thematically related queries at Google’s leisure. Lastly, “negative match” is a way to specifically exclude keywords within “phrase” or “broad match”, a relevancy sculpting tool of sorts.

The right match type strategy for the ROI-focused, metrics-driven advertiser is to use “broad match” as a research tool to find new keywords to add to your campaign that you might have overlooked in your primarily “exact” and “phrase match” campaigns. Because wholly relying on “broad match” will result in tons of non-converting clicks, “broad match” should be used as a farm team of sorts, whose better players become “phrase” or “exact match” keywords and whose dogs become negative keywords, thereby sculpting “broad match” so that it works to the advertiser’s business goals and not necessarily Google’s.

Back to “automatic match”, now. Advertisers typically set higher daily or monthly AdWords budgets than they want or expect to spend, simply because setting a budget equal to what they actually *expect* to spend would result in Google throttling back on delivery of their ad as the advertiser approaches the budget limit. So what you have is a scenario where a strong double-digit percentage of Google’s customers currently have higher budgets set than what they expect to spend, and an automatic matching beta that wrong assumes the advertisers actually *want* to spend all that budget.

Were Google able to give assurances that they would try to be ROI-relevant first, and budget-conscious second, “automatic match” might have value. I’ll even go so far as to say that in some cases it might actually deliver higher volumes of transactions/leads/whatever within advertiser ROI constraints. But AdWords is a yield optimization system working on Google’s behalf, and it appears as though spending the advertiser’s budget will be the primary goal, and semantic relevancy (and by no means ROI-relevancy) secondary to that.

Keep in mind that even should you opt out of “automatic match”, you will likely still feel its effects. If the history of AdWords new feature rollouts is any indication, 30-40% of advertisers go with whatever new features Google suggests. Were 30-40% of Google’s advertisers to use “automatic match”, I’d expect the increase in coverage and competition in Google’s ad space to result in keyword inflation as bad as the rising gasoline and food costs we are now experiencing.

To do battle with the yield optimization systems we call AdWords, YSM and AdCenter, advertisers need independent SEM and analytics technology that works to improve their yield and to meet their business goals. Automatic Match will do neither, and so my suggestion to you – get serious about SEM technology and analytics, or face the SEM laziness tax later this year.

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