The Art of Bid Management
By Rob Sullivan - May 17, 2004
If you manage a paid campaign on the internet, you have probably used, or thought of using, a bid management software package. These tools are godsends for those who must keep on top of large (and sometimes expensive) paid campaigns. If you are dealing with hundreds or thousands of phrases across multiple engines, software packages are the only way to manage bids as the time it would take to do it manually would be prohibitive at best.
While bid management software is great for this type of activity, it lacks in one key area: The ability to properly gauge the human response to an ad.
Sure it can tell you how many clicks you got, and in some instances you can even find out how many conversions ultimately occurred on your site, but that is where it stops. It doesn't take into account how your potential customers will react to an ad. So, while it may be able to tell you that you should raise or lower bids, it cannot tell you why, other than you may want to do this because your competitors are raising or lowering their bids.
In order to use this software to its maximum potential you, the web advertiser, MUST have an intimate understanding of who your customer is and what they expect from your site. This is where knowledge of true marketing comes in. Because while you can outbid your competitors for key phrases, having an understanding of key marketing concepts will help you identify if you need to outbid them, first of all, and also what you need to do to help your customers convert on your site.
For example, if you do a search for "bid management", the current Overture bid is just over $2.00, while "bid management software" is much cheaper at just under $1.30.
A person searching for bid management software may actually begin their search with "bid management". They may actually be researching about what bid management is, and potentially what is involved (i.e. do they need software, or can they do it themselves). They may not necessarily be in the frame of mind needed to make a purchase. Therefore the company paying $2.00 per click for "bid management" may in fact be spending too much while the company spending $1.30 for "bid management software" is more likely to get a conversion as they should be attracting people who have already done the research and are closer to making a purchase decision.
Yet if you look at the search volumes "bid management" gets much more searches than "bid management software." Therefore one would think that it would be a better investment.
Our own research indicates that when a person is investigating a potential purchase, they tend to start searching for broad terms and then narrow and refine their search - it isn't a linear process. That is - it isn't a "search - find - review - convert" process. The process is iterative and gets more refined over time. If you think about the way you search, you will likely see that this is the case. I know I never really thought about it until we did our research, but I found that I do search the same way. Therefore the broad terms are less likely to convert than the more specific terms.
So you may be asking, "If they start searching at the broad terms but don't convert, and these tend to be the more expensive terms, is it worth bidding on them?" The answer is: It depends.
Bidding on broad terms can work as a strategy - especially in highly competitive markets when you are trying to get your name out there. So while the bid itself may be expensive, it may be worthwhile in the long run as you try to distinguish yourself from your competitors. You can use high priced, lower converting terms to help build your awareness to the customers.
So this gets back to what I said at the beginning - you truly need to know who your customers are and how they search. Then you can define your PPC campaign around that. You cannot rely solely on what bid management software says is a good or not so good phrase. While the software can help you manage your bids, you can not rely strictly on what the software recommends.
If you are trying to make your customers aware of your company in the early research stages (by bidding on expensive phrases) you need to reinforce this by bidding on the medium cost, less competitive phrases so that your name stays within their view. The more often your prospective customer sees your ads, the more it is reinforced with them that you are a worthy vendor.
If you consider this process like an upside down triangle with layers where the broadest most competitive terms are at the top layer and this is where your customer begins their searching - at the earliest stages of research. As they begin to refine their queries, and work down through the layers, they start forming a "short list" of potential vendors. In order to get your name noticed above those of your competitors and get on this short list you must appear in the search results for all of those search stages. This is where bidding on highly competitive and expensive terms comes in.
While you do risk people clicking on these links, forcing the cost of your campaign up, the cumulative benefits from building your name are not easily measurable because, ultimately, the customer who buys from your site may have been made aware of you at the "bid management" (research) stage, but purchased from the "bid management software" (decision making and purchase) stage.
So, knowing your customer is essential in managing your PPC campaign because the software would likely show you that the higher priced "bid management" phrase has a low overall conversion rate, and therefore you should drop this phrase in favor of lower cost phrases. This goes contrary to what I said above, however, as you would need this phrase to help make the customer aware of who you are in the first place.
While this discrepancy cannot be compensated for by using the software, it is an issue which you, the website owner, or manager of the paid campaign can overcome. That is, you don't necessarily want to remove high priced competitive terms just because they aren't converting. Consider the impact they are having on your overall campaign. If they aren't costing you money that's good, but if they are, consider that they may be helping to reinforce to your clients that you are a trusted vendor.
Also consider that your customers may be using those ads as a way to gauge their acceptance of you and may be adding you to their short list, even though they haven't explicitly decided that they are ready to purchase yet.
So before you decide to drop those ads, consider the above, and see if it is really worth it to cut costs in these instances just because the PPC software says to do so.
fr.: http://www.searchengineguide.com/sullivan/2004/0517.html
0 Comments:
Post a Comment
<< Home