• by David Rodnitzky , Op-Ed Contributor, October 6, 2014

Keywords – the historical currency of SEM – are dying. Google is slowly eliminating keywords in favor of product feeds, spidered results, and audience-driven advertising.

This news likely does not sit well with many of you, who have labored tirelessly to build massive keyword libraries. Keywords, however, will soon outlive their usefulness to Google, and SEMs will have to adopt to this future reality.

I’ll break this article into two parts: first, examples of how Google is killing keywords; and second, why the company is doing this.

Here are four examples of Google’s de-emphasis on keywords:

1.     PLAs (Google Shopping): PLAs are driven by product feeds, not keywords. And while there is some keyword manipulation that can be applied to PLAs (for example, negative keywords), PLAs are feed-based, not keyword-based. Google has increased their prominence over the last few months at the expense of keywords. And top retailers are now reporting that they are spending more on PLAs than text ads.

2.     Dynamic Search Ads (DSA): Google has introduced a keywordless tool called DSA. With DSA, Google spiders your site and finds the right queries for your products – no keywords required.

3.     Reduced access to query data: Google has slowly started to provide less query data to marketers. Initially this change only impacted SEOs, and then restrictions on data were applied to third-party SEM tool providers. It would not surprise me if the search query report in the AdWords UI disappears soon as well.

4.     Removal of keyword granularity features: AdWords recently opted in all exact and phrase match keywords to include “close match variants.” Google has also taken away device, operating system, and carrier bidding from search, and bundled tablets and desktop into one category via Enhanced Campaigns. Advertisers are also automatically opted in to both “physical location” and “location intent” for geo-intent keywords.

So at this point you may be asking yourself, if keywords have driven hundreds of billions of dollars of revenue and profit for Google, why are they taking steps to kill the golden goose? The cynics among you may think the answer is simple: GREED! While I do agree that there are strong financial reasons to eliminate keywords, I also think the real reason here is much more nuanced. Here’s my guess on what Google is thinking:

1.     Greed. The cynics are partly right. Reducing keyword granularity (or keywords in general) enables Google to corral more advertisers into fewer auctions. That results in more competition and higher CPCs per click. And Google has such a lock on search traffic that it really doesn’t matter if this decreases the relevancy of advertising results – consumers aren’t going to go anywhere else for their searches (apologies to Bing and Yahoo . . .).

2.     A genuine desire to do better. I’ve had a few chances to talk to the “higher-ups” in the AdWords product organization. What’s clear from talking to them is that – like pretty much everyone at Google – they are obsessed with inventing new and better ways to do things. As such, I think that they see keywords as an inferior way to connect users and advertisers and are actively trying to develop ad units that are better for everyone involved. PLAs are example of such a unit – consumers seem to like them (based on CTRs), and advertisers typically get higher ROAS than text ads, with less work to boot.

3.     The rise of audiences. Lastly, I think Google recognizes that the future of online advertising will be more about “audiences” than “intent.” In other words, as advertisers are able to collect and use more and more information about consumers (via first-party, second-party, and third-party data), the currency of any advertising online will be more about understanding “who” you are serving an ad to than “what” they are doing online. Facebook has seen a dramatic rise in advertising revenue, simply because it’s able to target specific user sets better than anyone else online. If audiences are rapidly becoming the preferred currency of online marketers, Google has to make AdWords conform to this new paradigm.

The good news, from an SEM job-security perspective, is that none of these changes eliminate the need for smart people making smart decisions on AdWords. There will always be plenty for SEMs to do to optimize search campaigns. For those of you, however, who pride yourself on having the biggest keyword list possible, it appears that – at least from Google’s perspective – size no longer matters! :)