Missing the point of The Big Short
The Secret Digital Veteran takes on Google’s Performance Max
The giant robot brain that is Google seems to have gone down a YouTube rabbit-hole of videos related to finance, and ended up learning from The Big Short. The brain must not have heard the one about getting high on your own supply.
The Big Short is a great film but chopped up into bite sized chunks maybe Google’s AI missed the moral of the story. (Where are we on robot ethics now anyway? I guess Google decided nah, but luckily Nick Clegg and Facebook Meta will look after us now). Or maybe it’s noticed that ‘do no evil‘ is not such a big Google priority anymore, then took that as a signal and ran with it. Or maybe it’s applying the same principles to winning at the internet as it did to chess and checkers – you don’t have to understand why it works, just try lots of stuff and see if it results in winning. Given how popular the ‘we’re all in a simulation’ theory is in Silicon Valley, Google might be gambling on infinite re-dos – so I hope we’re in one of the realities where everything works out fine this time. But at least we’re in the reality where Google’s taking its cues from The Big Short and not, say, Jurassic Park.
But what is it that’s been inspiring Google? CDOs. Remember when sub-prime mortgages crashed the world economy leading to a decade of austerity (seemed like a big deal at the time but a global pandemic has put that into perspective). Anyway, the way that worked was you took a little bit of ‘good’ debt and mixed it with a whole load of ‘bad debt’ but marketed the whole lot as a fantastic investment. When the bad debt inevitably went bad the finance industry almost collapsed, but while it lasted the bankers made a killing.
Which is obviously completely different to Google’s new Performance Max campaigns. These are really good and help you to ‘find more converting customers across all of Google's channels like YouTube, Display, Search, Discovery, Gmail, and Maps’. Where you’ve foolishly been putting your budget into the channels that you know drive performance, Google is now coming to the rescue to shift budget into whatever it likes. This follows in the footsteps of other functionality like Smart Shopping (now with added display remarketing to inflate those last click metrics) and Local Campaigns (are ads on Maps incremental?).
Google has now released placement reports to give some visibility of how that spend is being allocated. And of course there’s always a chance that Performance Max may evolve and show incremental returns against other channels - with the proper testing strategies in place. But there’s a long way to go in terms of transparency before we can be confident that the performance being maxed isn’t just Google’s bottom line. Until then, we’ll be running our own validation to make sure we aren’t being big shorted.
