The State of

Paid Search
How marketers are managing
their programs
Table
Of
Contents

03 So who took the

survey? 15 Performance vs.
importance

05 Which search
engines are
marketers using?
16 Head to head

09 Shopping
campaigns and
smart bidding
17 Overall satisfaction

10 Performance
18 Summing things up

13 Feature importance
19 Conclusion
Introduction

Search advertising remains a crucial, tried-and-true tactic

for marketers. According to eMarketer, Google alone will
command 38 percent of the digital ad market this year —
significantly more than any other platform.

Companies of all shapes and sizes, from a wide array of

industries, turn to paid search. Some advertise clothes
or soft drinks, while some promote video games or cable
subscriptions. Some boast massive budgets, while some
are smaller spenders. Running a paid search program is
almost taken for granted.

One might imagine that the tools marketers use day in

and day out to manage those programs are taken for
granted as well. But the truth is, search marketers are
thinking harder than ever about these decisions.

Practitioners now have a broad choice of platforms to

drive efficiency, scale and performance. Some use the
“native” tools offered directly by search engines, such
as Google Ads Manager. But a growing number are
turning to third-party solutions that work across multiple
search engines to aid with sophisticated forecasting,
cross-publisher management capabilities, targeting,
measurement, reporting and more.

How do search marketers perceive the value of these

tools and platforms? We surveyed practitioners,
predominantly from the United States, about their paid
search programs. What we surfaced was a complex
snapshot of an industry that thinks critically about the
merits of using third-party tools. But a deep look into the
numbers revealed some clear trends.

Read on to learn more.

2
So who We surveyed agency figures and practitioners who work
directly for advertisers — and there was a near-even split
between the two.

took the Worked for agencies

53%

survey? Worked for advertisers 47%

A healthy mix of job

As for seniority, a solid 68 percent of respondents sat at
titles and companies the direct practitioner level — that is to say, analysts or
managers. But there were some higher-ups as well: 30
percent were at the director level or higher. And when you
look at those two groups, there’s a predictable difference
when it comes to actual decision-making authority.

Direct practioner level 68%

Director or higher level 30%

85 percent of director-level-or-higher respondents said they

have decision-making authority when it comes to selecting
software and tools. For lower-level respondents — analysts
and managers — the percentage was still a majority, but a
much smaller one: 58 percent.

Have decision-making authority

Director-level-or-higher
85%
Analysts and managers 58%

We also saw a distinct split when it came to agencies versus

direct advertisers: 53 percent of agency respondents said
they have decision-making authority, whereas 81 percent of
direct advertisers said the same.

Have decision-making authority

Director-level-or-higher 53%

Analysts and managers 81%

3
Industry breakdown
Automotive
Retail, finance and technology were the three biggest survey Finance
segments, accounting for a combined 41 percent of the Gaming
sample. But a wide array of other industries participated,
Healthcare
including automotive, gaming, healthcare and others.
Retail
So far, we can firmly arrive at a broad takeaway: Paid search Technology
is a widely used tool, and that width spans practitioners
Telecommunications
ranging across numerous industries and budgets. This is the
lay of the land upon which we’ll be viewing the rest of our Travel
results. Other

48%
Budgetary patterns
Smaller advertisers were a bit more likely to take the survey.
A 48 percent plurality had monthly search budgets of
$100,000 or less. But we can see some deeper trends when
we look more closely at the numbers.

Those using third-party campaign

management platforms
There’s a key group of practitioners that we will
be examining closely throughout this report, and
60% Advertisers spending
that are significantly more likely to flex budgetary more than $100,000
muscle: Those using third-party campaign per month
management platforms. 60 percent of such
advertisers (including those who use those tools
in combination with the native tools offered by
search engines) are spending more than $100,000
per month. 40 percent of the respondents who 40% Native tool users
spending more than
only use native tools said the same. There was
$100,000 per month
no appreciable difference between agency
practitioners and direct advertisers in this regard.

4
Which search
engines are
marketers using?
And how are they performing?

93% Google

Engines
This won’t exactly come as a shock: 93 percent of
respondents are running their programs on Google.

After that, the results get a bit more surprising. Microsoft

Advertising (formerly known as Bing Ads) is much more
than an also-ran. In fact, a majority of respondents — 53
percent — are actively advertising on the platform.

Yahoo, which now rolls its paid search inventory into the
broader portfolio of Verizon Media, picks up 21 percent.
After those three, there’s a major drop-off:

53% Microsoft 21% Yahoo

Advertising
(Bing)

One other notable data point: Agencies were

significantly more likely to use Microsoft
Use Microsoft Search search programs than direct advertisers. The
numbers were 67 percent and 37 percent,
respectively.
Agencies 67%
“Any mature advertiser needs to be on both
Direct Advertisers 37% Google and the Bing platform, at least in the
US,” said Nirmal Nijjar, vp and head of search
activation at the full service agency Essence,
in an interview with Digiday. “Bing has a
unique audience in some cases. Why leave
that on the table?”

5
Native tools or
third-party platforms
A slim majority (53 percent) said they
use only native tools, such as Google
Ad Manager, to manage their search
53% use only native tools

campaigns. A smaller number — 18

percent — said they only use a third-
29% use both tools and platforms

party campaign management platform.

But things get more interesting when
18% use third-party campaign
management platforms
you take stock of the respondents who
use both: 29 percent, to be exact.

47% of search marketers use

a third-party platform in
All told, 47 percent use third-party
platforms, whether exclusively or in
conjunction with native tools.

some capacity

Overall, the numbers clearly demonstrate that third-party-

platforms tend to be incorporated into larger search programs
more frequently than smaller ones.

That’s not terribly surprising. For one thing, larger businesses

sometimes have more sophisticated business models and more
nuanced advertising goals.

Uses third-party Uses both third-party Uses both third-party

platforms only platforms and native tools platforms at all

21% Monthly budget 36% Monthly budget over = 57% Monthly budget over
over $100,000 $100,000 $100,000

16% Monthly budget less 21% Monthly budget less = 37% Monthly budget less
than $100,000 than $100,000 than $100,000

6
“It’s a question of how complex your business is,” said Jacob
Davis, vp of search and performance strategy at the digital
agency 360i, in an interview with Digiday. “How complex is agencies using native
your website and your buy flow and lead submission form?
54% tools only
Questions like that will normally help dictate whether or not
you need a third party solution — someone you can partner
with on adding solutions, appropriate measurements,
attribution, things like that.”

Agencies were slightly more likely to use native tools alone

(54 percent) than direct advertisers were (51 percent). 51% direct advertisers using
Agencies were also more likely to use both native tools and native tools only
third-party platforms.

Which platforms are they using?

Even when it comes to third-party tools,

52% Google Search Ads 360
Google dominates in both usage and
awareness. 52 percent of the respondents who
use third-party platforms (whether alone or
alongside native tools) cited Google’s Search
Ads 360 as their choice. Kenshoo came in
second with 16 percent, followed by Adobe
16% Kenshoo
Advertising Cloud with 13 percent. Those were
the only platforms to crack 10 percent.

At this point, you may be asking yourself why

Google Search Ads 360 is not considered a
“native tool.” Back in 2007, Google acquired
an ad-serving technology company called
DoubleClick, who had a search campaign
management platform called DART Search.
This, in turn, had been acquired from a
company called Performics, where it was
called Connect Commerce, and had actually
grown out of an affiliate marketing platform.
Performics then went on to become a digital
ad agency as part of the Publicis Groupe. With
the acquisition, Google separated the largely
13% Adobe
self-service native tools within what was then
Advertising
called Google Adwords, and the premium,
Cloud
multi-engine platform that is now known as
Google Search Ads 360.

7
We also asked the respondents who
only use native tools which of the
third-party platforms they’re familiar
with. 64 percent — almost two
thirds — said they were familiar with
Google Search Ads 360. After that, no
platform broke 50 percent. 36 percent
said they were familiar with Adobe
Advertising Cloud, followed by 28
percent for Kenshoo, 23 percent for
Marin Software, and 14 percent for
Acquisio. Every other platform came in
below 10 percent. “In my experience,
if you work on more than one client,
client number one may be a Kenshoo
client and client number two may be
an SA360 client,” said Davis. “Those
clients will have very different needs,
and those tools are specifically catered
against those needs.”
“It’s not surprising to hear that SA360
is more utilized than others,” he added.
“But a good practitioner is aware
of all the advantages of different
opportunities and routinely audits
what technologies are available.”
Now comes a pressing question:
What’s driving all these decisions?
Why do some practitioners stick to
native tools? Why do others stick to
third-party platforms? And why do
some use both? More on that soon.

It’s not surprising to hear that SA360 is more utilized than other
[third-party platforms]. But a good practitioner is aware of all the
advantages of different opportunities and routinely audits what
technologies are available.
— Jacob Davis
vp of search and
performance, 360i

Third-Party Tools Currently Use Familiar With

Google Search Ads 360

Kenshoo

Adobe Advertising Cloud

Other

Marin Software

[24]7 Customer Acquisition Cloud

Acquision

AdStage

QuanticMind

SearchForce

0% 20% 40% 60% 80%

8
Shopping
One interesting pattern begins to emerge when we look at
Smart Bidding for third-party tools users versus native tool
users: Fewer respondents for the former (8% vs. 18%) said

campaigns
they didn’t know, or weren’t sure if they were using this
feature.

and smart
Why might this be important? One reasonable hypothesis
is that users of third-party tools, almost by definition, have
a somewhat broader experience with paid search. That’s

bidding
especially true of those who use both native and third-
party tools. This breadth of knowledge and experience may
manifest itself in greater awareness of some of the deeper
details of paid search programs.
We also asked respondents
about their use of certain search Later on, we’ll look into how this might affect which
attributes users consider important in a management tool.
features and functionality.

Shopping campaigns
First, let’s define what we mean when we talk about
Yes No Not sure
“shopping campaigns” and “smart bidding.”

Overall
Shopping campaigns feature ads that include product
information such as image, price, and the name of the Gaming
merchant, as opposed to just text. The ads are placed Retail
`in front of users based on search for those, or related
Automotive
products.
Telecom
Smart bidding is a machine learning feature that helps
Healthcare
advertisers optimize for conversion value in automated
auctions. Travel

Finance
Overall, 52 percent of advertisers said they use shopping
campaigns. That includes 88 percent of retail advertisers Technology
and a full 100 percent of gaming advertisers. Automotive Other
and telecommunications respondents also tend to use 0% 25% 50% 75% 100%
shopping campaigns — more than 50 percent in both
cases.
Smart bidding
Smart bidding was even more widely used. Nearly three Yes No Not sure
quarters of respondents (72 percent) reported using this
functionality. Gaming once again comes out on top: As with Overall
shopping campaigns, 100 percent say they’re using it. Gaming
Retail
In fact, at least two thirds of respondents from each
industry category named in the survey said they use Automotive
smart bidding. (Only the “other” category reported a lower
Telecom
number — and even there the percentage was 59 percent.)
Healthcare
The numbers may actually be even higher than that. A Travel
number of respondents said they weren’t sure whether
their organizations were using smart bidding, as opposed Finance
to giving a flat “no.” The retail, telecom and finance Technology
industries were the least certain, with more than 10 percent
Other
of respondents from each category reporting that they
0% 25% 50% 75% 100%
weren’t sure.

9
Performance
Next up, we asked respondents
how well their search programs
were performing relative to their
61%
When we take a look at third-party platform
users vs. native tools-only users, we can
goals and expectations.
once again glean some larger patterns. 61
percent of respondents who use campaign
management platforms reported slightly or
much better performance.
Overall, a majority of respondents (53 percent) said their

46%
search programs are performing slightly or much better
than expectations. (The “much better” crowd clocked in at
15 percent ).

Some other patterns emerge when we take a closer look at

search programs by size. For instance, 64 percent of larger
The number was significantly lower — 46
programs (i.e., those spending more $100,000 per month)
percent — for native tools-only users.
reported that performance was slightly or much better
than expectations. For smaller programs, the number was
43 percent, while a slim majority of those smaller programs
(51 percent ) said their search programs did at least meet
their goals and expectations without exceeding them.

Search program performance Much better than Slightly better than

(vs goals/expectations) expectations expectations

Total

User Type

Third-party users

Native Tool users

Company Type

Agencies

Advertisers

Program Size

Larger programs

Smaller programs

0% 15% 30% 45% 60% 75%

10
Key attributes
Diving even deeper into the nitty-gritty, we asked
respondents to rate, on a five-point scale, how the specific
features of their tools are performing. We zeroed in on a set
of 13 distinct attributes. (For respondents who used third-
party campaign management platforms in any capacity, we
asked about their experience with those tools. For everyone
else, we asked about their experience with native tools.)
Of the respondents who reported an answer other than
“don’t know,” one in four gave budgeting tools the top
rating of 5. Meanwhile, integration with other systems,
optimization tools, responsiveness/speed of user interface,
and training and education received a 5 rating from one
in five respondents. Dedicated account support, audience
management and advanced analysis fared poorer; each
category received the top rating from less than 15 percent
of respondents.
For a handful of these categories, things look a bit rosier
when we take a look at respondents who rated their tools a
five or a four. Audience management and advanced analysis,
in particular, come out looking stronger.

Performance of key features Performs extremely well Performs well

Budgeting tools

Training and education

Integration with other systems

Responsiveness/Speed of
user interface

Optimization tools

Cross-channel features

Automation of common tasks

Overall time savings

Ease of use

Multiple country/language
support

Dedicated account support

Audience management

Advanced analysis

0% 15% 30% 45% 60% 75%

11
Once again, the picture gets more Performance broken out by user type
nuanced when we take a look at
the differences between third-party Third-party platform Native tools
platform users and native tools-only
users. Third-party platform users had
a greater percentage of five ratings Budgeting tools
for almost every single attribute
— the only exception being platform Training and education
supports multiple countries and
languages. And cross-channel features Integration with other
— optimization tools, automation of systems
common tasks and advanced analysis
— each showed double-digital Responsiveness/Speed of
increases over native tools. user interface

“I think often you’ll have a five Optimization tools

temporarily but not permanently,” said
Davis when we asked for his thoughts Cross-channel features
on these survey results. “There are
moments when practitioners can say, Automation of common
‘okay, I’ve got everything completely tasks
under control.’ But the second the
market changes, the third-party Overall time savings
tools have to rapidly adopt the new
solutions.” Ease of use

“I give them credit,” he added. “It’s not Multiple country/language

easy. And we’re seeing it happen more support
often than not.”
Dedicated account
support

Audience management

Advanced analysis

0% 5% 10% 15% 20% 25% 30%

The second the market changes, the

third-party tools have to rapidly adopt
the new solutions...I give them credit.
It’s not easy, and we’re seeing it happen
more often than not. — Jacob Davis
vp of search and
performance, 360i

12
Feature
importance
So are all features
created equal?

We asked respondents to rate the Importance of key features

importance of these 13 attributes,
again on a scale of one to five. (“One” Very important Somewhat important
would indicate that the feature isn’t
at all important to search marketers, Advanced analysis
while “five” would indicate that it’s
very important.) Ease of use

More than half of the respondents Overall time savings

rated advanced analysis and ease
of use as very important. But that’s Optimization tools
not the whole story. If we widen our
lens to include either fives or fours, Integration with other
overall time savings becomes the most systems
important attribute.
Audience management

Responsiveness/Speed of
user interface

Automation of common
tasks

Cross-channel features

Budgeting tools

Dedicated account
support

Training and education

Multiple country/language
support

0% 15% 30% 45% 60% 75% 90%

13
When it comes to “very important”
responses, native tools-only users
and third-party platform users don’t
rate those top three attributes very
differently.

But a clear pattern emerges when

we take a look at other features —
particularly technical ones involving
integration with other systems.
Third-party platform users place
significantly more importance in
these features than practitioners who
only use native-tools. Importance broken out by user type
Third-party platform Native tools

Advanced analysis

Ease of use

Overall time savings

Optimization tools

Integration with other

systems

Audience management

Responsiveness/Speed of
user interface

Automation of common
tasks

Cross-channel features

Budgeting tools

Dedicated account
support

Training and education

Multiple country/language
support

0% 15% 30% 45% 60%

14
Performance
vs. importance
So how can we make sense of all this? One way is to plot
performance against importance. Even without labeling
individual points, it’s clear that users of third-party
campaign management tools scored up and to the right.
In other words, they gave generally higher scores for both
importance and performance.

Take a look:

Importance vs Performance by user type

Native tools Third-party platform

30%
% of respondents rating ‘performs extremely well’

23%

15%

8%

0%
0% 15% 30% 45% 60%

% of respondents rating ‘very important’

In these scores, we see additional data points that suggest to acquire a specialized platform may be more attuned
a sort of enthusiasm gap between third-party platform to their program’s overall performance. Moreover, those
users and those who only use native tools. In addition to practitioners likely sought out the help of a third party with
just having broader experience with search programs, as a detailed knowledge of which aspects of their programs
posited earlier, those practitioners who go the extra mile needed special attention.

15
Head to head
Up to this point, we’ve focused on
the usage of respondents’ own tools.
But later in our survey, we asked
practitioners to rate how green the
grass looked on the other side of the
fence. After excluding the respondents
who said they didn’t know one way or
another, we saw clear trends.
First of all, a significant number of
respondents didn’t want to take
sides. But overall, search marketers
tended to say that the features of
third-party platforms are as good or
somewhat better than those of native
search tools. “Availability of the latest
features in paid search advertising”
was the only feature that stood as an
exception. That’s likely because native
tools typically adapt new features
as soon as publishers roll them out,
while third parties often incorporate
the changes only after they’ve been
released.
“For something as simple as the way
we apply audiences, we might rely on
a relatively new feature that hasn’t
been rolled out and adopted widely by
the third party platforms,” explained
Essence’s Nijjar. “But from a reporting
standpoint, and with our standard
workflows, we rely heavily on third-
party platforms.”
Predictably, third-party platform users
tended to see advantages to using
those platforms, while native tools
users were more likely to express
skepticism toward third-party tools.

How do third-party campaign

management platforms compare Much worse Somewhat worse About the same

to native tools? Somewhat better Much better

100

90

80

70

60

50

40

30

20

10

%
Visibility & Optimization Time Savings Advanced analysis Innovation
Transparency Features
16
Overall
satisfaction

62% somewhat satisfied

We’ve taken a microscopic look at the
details and individual features of search
marketing tools, but what about the
birds-eye view? When you come right
down to it, how satisfied are marketers
with the tools they use, overall?
As it turns out, pretty darn satisfied. 17
percent said they were “very satisfied”
with the tools they use and 62 percent
said they were “somewhat satisfied.”
Nearly four out of five marketers are
satisfied. That’s a huge number.
Taking a closer look at key segments,
we see that agencies are more satisfied
than direct advertisers (although
more advertisers said they were “very
satisfied” with their platforms). We
also see that managers of larger search
programs are more satisfied than those
who manage smaller programs.
Finally, in keeping with the larger trends
surfaced by the survey, we see that
third-party platform users are more
satisfied than native tools-only users. 17% very satisfied
Take a look:

Overall Satisfaction
Very satisfied Somewhat satisfied

TOTAL

User Type

Third-party users

Native tool users

Company Type

Agencies

Advertisers

Program Size

Larger programs

Smaller programs

0% 15% 30% 45% 60% 75% 90%

17
Summing
things up
As ever, the paid search
industry is complex, and looks
different depending on your
vantage point.
But when we took a broad look at the state of
play, there were a number of key takeaways:
Just over half of search
marketers primarily use
the native campaign
management tools
offered directly by the
search engines.
A majority of
respondents said they
use smart bidding
where it is offered.
After Google, Kenshoo
and Adobe scored
highest across both
usage and familiarity.
These were the only
three third-party
platforms used by at
least 10 percent of
respondents.
47 percent use third- Most search marketers 88% of retail
party platforms, with hold sway over small advertisers report that
a majority of those programs, spending they are using search
actually using these $100K per month or shopping campaigns.
tools alongside native less. But most users of
tools. third-party tools are
bigger spenders.
Nearly all search About 1 out of 2 Google’s third-party
marketers run advertisers are running management offering,
campaigns on Google. programs on Microsoft, Google Search Ads
making it Google’s 360, scores high in
biggest competitor by a terms of platform
huge margin. usage, as well as
familiarity among
those not using third-
party platforms.
Most marketers said However, marketers Overall, third-
their search programs who use third-party party platform
are exceeding platforms — either users demonstrate
expectations, and exclusively or in significantly more
nearly 4 in 5 said they conjunction with the enthusiasm than native
were somewhat or native tools provided tools-only users. Third-
very satisfied with their by search engines party users rate the
tools. — almost always specific features of their
attributed a higher level platforms more highly
of performance to the — not just in terms of
individual features of performance, but also
their tools. in terms of importance.
18
Conclusion

Third-party platforms aren’t exactly new. In fact, they

started popping up in the early 2000s, soon after search
started picking up steam as an ad platform. The ability to
manage search programs in a unified way across multiple
engines — as opposed to working with each platform
individually — was a source of appeal. Moreover, paying
a third party gave advertisers a more direct feedback loop
into the development of emerging market-driven features,
and more support than the (largely) self-service tools
offered by the search engines.

Flash forward more than a decade, and these remain some

of the biggest selling points for third-party platforms. But
in recent years, the increase in complexity across digital
marketing has demanded tools to meet that complexity in
new and innovative ways..

In part, that’s because just as Google does not equal

search, search does not equal digital marketing. Crossing
channels and technologies, whether it’s paid social,
display, offline, or CRM, is a never-ending frontier of new
capabilities and new business requirements that keeps
both users and tool providers on their toes.

The wide array of platforms now available on the market

has given practitioners the chance to shop around for
partners that suit their specific needs. On top of that, many
agencies have become reliant on these platforms, ensuring
that their clients’ ad dollars are given the third-party
treatment.

But as our survey makes clear, the biggest reason may be

this: Practitioners say they work. Throughout our survey,
advertisers who invested in third-party tools were largely
satisfied with the results. While few search marketers of
any stripe are despairing over the quality of their tools, the
ones who use third-party platforms consistently report
higher satisfaction, both overall and in terms of specific
features.

As it stands, nearly half of search marketers are looking

beyond native tools in some capacity. Looking to the
future, will that become a majority? Will that enthusiasm
for a non-native solution translate to greater adoption?
We’ll have to wait and see.

19