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Bid Management Has a Long Way to Go

9/7/2008 by 4 Comments

I have written about Bid Management many times, and am a big fan of what it can do to help scale a PPC campaign. However, a bad bid management system can trap or limit your campaign.

Portfolio based bid management is a must. Basically, what this is, is a method for dealing with individual keywords that do not present enough data to determine their ROI on an individual basis. The classic cases are long tail keywords, such as one that has a single click, but it resulted in a conversion, or another keyword that has 10 clicks but no conversions.

Making sweeping bid price decisions based on such a small amount of data is fundamentally foolhardy. Smart bid management tools will aggregate data in larger groups. One way to do this is to take all the keywords in an ad group, and then treat them as one statistical entity and calculate their bids based on their performance as a group. If that does not work, the next step is to look at the campaign level.

But this is just the beginning of the issues you face. Here are some others:

  1. You may have keywords that you bid on for branding purposes, so ROI be damned, you are going to bid aggressively on them anyway.
  2. Other keywords may exist that you want to measure on an ROI basis, unless they fall below a certain position, in which case, you are willing to sacrifice ROI.
  3. Some bid management tools don’t allow you to manage to ROAS (or ROI), but force you to work to a CPA goal. Go for all the accuracy you can my friend, and ROAS/ROI is a far superior approach to CPA.
  4. Attribution is another huge problem. If you have multiple clicks made by a user to the site, which visit do you allocate the revenue to? First? Last? Allocated across all clicks? If you figure this out, what do you do when display ads and email campaigns deliver some of the clicks prior to a transaction. This is a problem that analytics and bid management vendors are just beginning to cope with.
  5. I have searched high and low for a bid management application that uses trial and error testing to determine when the ROI goal is being met. I have yet to find one. But if you can’t get this, you really don;t have the control you need when setting ROAS.

This industry is in its infancy, and the needs of sophisticated PPC marketers are met best by some of the better bid management applications out there, such as Marin Software, and Efficient Frontier. But, boy to we have a long way to go.

For web marketers, the key is to pick the tool that most closely meets their biggest needs. Making this determination is far from an easy task. What is needed is an analysis of the marketers online business, the dynamics of its marketplace, and an assessment of which tools best meets its needs.

Filed Under: Bid Management, PPC

Latest Interview: Kevin Lee

3/30/2008 by Leave a Comment

Recently I have the chance to speak with Kevin Lee, Co-Founder & Executive Chairman of Did-It. We spoke about the SEM industry in the past year, the future of it, as well as the types of tools to use to get the best results for your campaigns. Please feel free to comment on the interview below.

Filed Under: Bid Management, PPC, Search Engine Marketing

Microsoft Blocking Ads Targeted at Hispanics?

2/21/2008 by 3 Comments

I received an interesting tip from the folks at QuieroLatino.com, a Latin dating site. According to this post on their site Microsoft AdCenter won’t accept Spanish ads or ads that go to pages with Spanish on them.

To clarify this a bit further, the issue appears to be with running these types of campaigns in the US itself. Here is the gist of Microsoft’s communication with the site owners:

The reason for the disapproval is because of the use of a foreign language on the landing page. You are using the English US distribution channel and targeting the US and so you must use only the English language on the landing page.

Here’s the kicker:

Also, note that the words tu media naranja in the ad will need to be changed to English.

The site owner also reports that campaigns with Google and Yahoo went ahead with no problem. It seems to me that this is an oversight on Microsoft’s part. It looks like they are trying to ensure a higher degree of relevance for the US audience, but simply missed the mark on this one.

The US Census bureau reports that there were more than 44 million Hispanics in the US as of 2006. That’s more than 10% of the US population. As I covered in a recent post on Search Engine Watch about Hispanic Search Marketing, marketing in a culturally sensitive way to specific ethnic groups is really a market requirement these days.

I will ask Microsoft for a comment on this. Unless I misunderstand what’s going on here, I have to imagine that they will fix this.

Filed Under: Microsoft, PPC

Integrating Display and PPC Advertising

11/21/2007 by Leave a Comment

This week I went in a new direction in the By The Numbers Column on Search Engine Watch. The column is called How to Integrate Display and PPC Advertising. I worked with Dustin Engel of Range Online Media on this one. It looks at how you can operate your display advertising and PPC campaigns in cycles to optimize your total return.

Filed Under: PPC, Search Engine Marketing

A Look at Bid Management Look Back

11/14/2007 by 1 Comment

This week’s By The Numbers column on Search Engine Watch takes a look at Bid Management Look Back. With the help of Marin Software, I take a look at the issues and the solutions. Check the article out, as it provides a look under the covers of why modern day bid management is hard to do.

Filed Under: Bid Management, PPC, Search Engine Marketing

You Gotta Have Bid Management

3/14/2007 by 5 Comments

While I usually focus on organic web marketing or web analytics issues in this blog, today I want to talk about bid management. I could be wrong, but I have this sense that it is greatly underutilized in the market.

A little over a year ago we sold off a set of sites that we had been operating for a few years. The sites had a very strong organic traffic flow, but we also did a substantial amount of PPC on these sites – about $50K per month. Them there’s real dollars!

We began our PPC, like many people do, by flinging keywords into Google AdWords and Yahoo! Search Marketing. We were building a nice traffic volume from this activity, but when we analyzed our results we found that we were only breaking even. Given that we were investing 20 hours per week into the effort, this did not seem like smart business!

But we made a strategic decision and implemented a bid management solution. We actually used a product that is no longer available, Overture’s Search Optimizer. The tool provided us with automated tracking of our accounts, including the calculation of keyword by keyword return on ad spend.

In addition, all of our bids in Overture were now automatically adjusted for us to meet our Return on Ad Spend (ROAS) goals. Very quickly we found that the time we were spending on PPC got cut by more than half, to less than 10 hours per week.

Better still, within 90 days of implementing the bid management system, our profit margin grew from 0% to 30%. So I became a convert. If you manage campaigns that are complex and hard to manage, you gotta have automated bid management.

Filed Under: Bid Management, PPC, Search Engine Marketing

Building Multi-Million $ Web Sites from Scratch (Part 2 of …)

10/17/2006 by Leave a Comment

Using PPC to Enhance your Organic Traffic Strategy

This is the second in a series of stories about building multi-million dollar web sites using a White Hat SEO approach. Today, we are going to focus on the concept of using PPC campaigns to help your launch succeed. As the thrust of this series is to develop sites whose value is based on organic traffic, this article is not specifically about PPC development and management, but on how PPC can help you improve your organic strategy.

Of course, PPC can provide a short term revenue stream, and well managed campaign can net you some cash as well. There are a lot of people out there who are really good at this, and know how to manage massive PPC campaigns.

How PPC helps Organic Site Development

But even if your focus is organic traffic, you can still use PPC as tool in your bag of tricks. It can help you with several types of problems:

  1. Early stage site design (which will be featured in another article in this series) is tricky business, involving the matching up the content you are able to generate with a site hierarchy (driven by keyword research), and a web site template design (to expose the target keywords). We believe that you need to put your initial site design out there, after doing your keyword and content research, and then test it, and evolve. The fastest way to test it, while you are waiting for organic traffic to build, is to use PPC to bring in some immediate traffic. Use this traffic to tweak your site hierarchy and page templates in the early stages, while it’s still relatively easy to change.
  2. In addition, if your site is in a new field for you, you probably have little advance data on how to optimize the conversion rates of your pages. PPC can be used to tune your pages to optimize your results. You will need to have good web analytic tools in place to get the most out of this. Be careful though – tuning your pages for conversion rates can lead you to develop pages that do not play well during reviews of your site by people that are considering linking to you. You need to strike a balance between high quality content and revenue. PPC tests can help you figure out how to do that.
  3. If you are like most webmasters, you have limited content development resources, and you need to prioritize them. Using PPC, you can figure out where visitors most readily convert into revenue, and focus your content development efforts in related areas.

Paying for it

Of course, PPC tests do take money. If you are pursuing a highly competitive market as is the theme of this article series, you need to make money in the process. To do this, you need to use good web analytics and bid management tools.

Good bid management tools, such as Keyword Max and Search Optimizer are worth their weight in gold (OK – since software does not weigh anything, assume I mean the weight of the computer they are running on). We have taken campaigns that were running break even, installed one of these tools, and been at a 30% margin (with no material change in the monthly spend) within 3 months.

This provides some good cash flow, while you are collecting data to drive your organic site development. If you are really good at PPC, you can make some pretty good money at this part of the business.

However, we still view the bigger win as being the build up of organic site traffic and revenue. The margin is much higher. In addition, if you plan to sell your site to the highest bidder some day, they will pay for organically generated revenue, not for the PPC based revenue.

Next up

  1. Site Hierarchy and Keyword Selection
  2. More on Building Content
  3. How to get links
  4. How to monitor results, and what to do about it

Already Published Articles in the Series

  1. Building Multi-Million $ Web Sites from Scratch Part 1 of …)

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Filed Under: PPC, Search Engine Marketing, SEO

New Site Promotion: PPC or SEO First?

9/1/2006 by Leave a Comment

SEO or SEM First?Whenever we start up with a new client, one of the first questions that often comes up is whether or not we should focus on Search Engine Marketing (SEM) or Search Engine Optimization first. Lisa Barone discusses this point in her recent post about What Comes First: PPC or SEO?.

As part of her post, she reviews a Wilson Web article written by iPlenus Solutions’ Director of Web Design Paul Schmidt. Paul advocates the notion of always starting out with PPC.

Lisa correctly observes that there are many reasons for laying down the foundation of your SEO strategy in advance too. For example, you would not want to build a site for PPC purposes up front, and then find out that it does not meet the needs of your SEO strategy from a structural point of view. Part of her post outlines the need to do keyword research as a part of developing the site hierarchy, and that this research needs to be done before you build your site.

We completely agree. It’s important to understand that if you put a site together without understanding your SEO considerations up front, that you will almost inevitably end up having to redo your site. This is expensive and time consuming. It can also be harmful to your search engine rankings while the search engines adapt to your site changes.

Another hidden cost is that if you launch a PPC focused site first, you might not take into account basic architectural and code design decisions that need to be made correctly. This happened with one site I know, and resulted in a site that is fundamentally uncrawlable. Substantial work now needs to be done to salvage their site and the long term prospects for their business have been damaged. Always do your initial SEO plan (and the related keyword research) before you build your site.

Another factor to consider is that SEO has a much longer lead time. Search engines don’t index your page overnight, and developing good rankings take time. While instant revenue (and customer data) from PPC may be attractive, you may also want to make sure that you get the “clock ticking” on getting your site to rank for key terms, by getting it up and running as quickly as possible. Given the importance of organic search engine rankings to branding this may be a higher priority for some businesses than PPC revenue.

Note that there are some real benefits to getting involved in PPC early. As outlined by Paul, early PPC does provide real value in seeing what messages users respond to, what causes them to buy, and, of course, potential profit. The messaging and conversion data can affect what you do with your site design too. But we see this as a second order effect which you can apply to the 2nd pass of your site architecture.

Filed Under: PPC, Search Engine Marketing, SEO
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