The Position² team was very excited when we announced the formal release of our in-house Bid Management platform late last year, and we have been seeing tremendous success in its adoption across companies. We have been developing and using it for the last four years for our existing customer base. And yes, there are still a few skeptics out there who do not realize the importance or need for automated bid management. Would you really want to use a scissor to mow your lawn?

Building A Case For Automated Bid Management

If you manage PPC campaigns with a budget of more than $50,000 per month, you will relate to the facts that we present in this graphic. There is always more competition, so you need to keep looking out for them as they affect the performance of your campaigns.

You have less time to respond: you need to be quick to take advantage of market driven changes and developments, or your competitors will. Newer technologies: search engines are constantly upgrading and modifying their systems, you need to ensure it is leveraged in the best possible way. Then there are scalability challenges associated with higher spends. More keywords, more ads, more landing pages, whew!

To top it all, everyone in your organization, including the CEO in most cases, is involved in how your search marketing is performing.

The Challenge

It is all about coverage and optimization. Coverage is about how you can reach more of your potential audience, and optimization refers to reaching them at the best possible return on investment. Let me share this example of a hypothetical book store that sells one book. The book I use in this example is ‘The Lost Symbol’ by Dan Brown, and your challenge is to reach out to all potential buyers in the most cost effective way. Two dimensions as explained below;

1. Increasing Coverage
   
   Discovery of additional keywords, so you start with a core set and keep expanding that set, hypothetically as much as you possibly can efficiently manage.
   
   What’s really important is that you need to have a fast and efficient way to discover keywords, we are dealing in the “hundred thousands of keywords” range here and you will agree that automation is the only way out.
   
   An automated system could run each keyword through a process of discovery, day in and day out without coffee breaks!
2. Increasing Returns
   
   This is the other dimension. Among the keywords that you have identified, how do you maximize your returns? As shown below, the only way is to manage each keyword individually, as each one has a unique bid-value point at which it provides the best returns. Imagine doing it manually for thousands of keywords on a daily basis.
   
   

Statistical Methods Have Evolved Too!

There were simple rules that were executed using spreadsheet based tools. This was followed by model based systems, and now complex portfolio based systems allow for more accurate bid management. So while skeptics questioned the initial inefficient methods, technology has caught up and Auto Bid Management seems to be a no brainer.



To sum it up, In a situation like this, manual bid management, and rule based systems with long campaign cycles is a sure shot recipe for diminishing returns. You need to embrace automated bid management that can provide improved performance and better returns for investments.

The Position² AutoBid Recommendation Engine



Here is a quick peek into our AutoBid Recommendation Engine. The system takes input via APIs from major search engines (it supports Google, Yahoo, Bing at this point in time). Campaign managers can configure parameters, which are primarily the target values of CPL, CPCs etc. The platform then takes over, and can make bid changes automatically or we also have provision for manual intervention. Since we provide services, we have seen this as a must have feature for nearly all our clients.

Bid Management Methodology

The engine uses complex algorithms and curve fitting programs to model the search engine bid environment and identify optimum bids. To explain it in simple words, take a look at the charts below.

Model Based Bidding:



The engine predicts expected clicks for all possible bid values, using the data collected on a minimum of 2 clicks.

If you were doing it manually, it would mean trying out all possible bid values (which is actually infinite!)

This data is then used to model a conversion rate. The model looks at how similar keywords and keywords in the same cluster have performed.

This data is used to identify the optimum CPA value for each keyword, yes each keyword. And this is done on a regular basis. If you ask why, we are operating in a dynamic environment, to get the best results you need to do it regularly.

Portfolio Based Bidding:



Extending the above, graphs are plotted for each keyword, and the optimum bids across keywords for budgets are plotted.

Does It Really Work?

We would like to share 2 case examples where we were able to improve performance significantly.

Case I – Online Books Retailer:

Like any other online books retailer, we were dealing with over 5 million titles, so it was a very complex account structure. High seasonality and event based activities, needing fast turnarounds. A significant variation in profit per unit, as prices of books had a wide range.

Here is a summary of activities across 3 key parameters: Coverage, optimization and speed.



The results are there to see – 9x increase in sales and CPA reduced by 80%



Case II – Online University:

The challenge was to get 20,000 applications for the courses in a period of 5 weeks. We were dealing with over 30 different courses and local region preferences.

Summary of activities:



Results:



Conclusion

As you can see, there’s no magic, it is a simple common sense driven approach aided by some cool technology that can help improve the performance of PPC campaigns. While there are many automated bid management systems out there, what is key is to understand whether they operate on simple rules or portfolio optimization. The performance you need will come from systems that are based on portfolio optimization.

As a simple way to see how or whether the AutoBid engine can really improve performance, you can test it out on a single use basis. We offer an online Search Marketing Efficiency scoring interface, where you can upload your data, and let our engine analyze it to come up with a report on the ideal metrics your campaign should be giving you. A sample report snapshot is below.

In case your score is less than 6, you can get substantial improvement in performance. Go ahead, it’s free and has no strings attached.

Contributed by Vinod Nambiar, Director of Global Delivery, Position²

This article is based on a webinar that was delivered by us as part of the formal launch of the AutoBid Recommendations Engine.

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Is it true that we have to set a CPC bid limit when we’re using automatic bidding?

The above question will be answered in the following paragraphs.

With automatic bidding, the Search Engine Marketing systems (like: Adwords, Adcenter & Search Marketing) adjust the bids automatically to earn the most clicks possible within the given budget. It isn’t possible to set a specific CPC bid. However, we can set an upper limit on the CPC bids for the entire campaign. This is the CPC bid limit. Specify a bid limit and the Search Engine Marketing system will never bid over the specified limit for any single click.

If it’s important for us to control the cost of individual clicks on our ad, it’s good to specify a CPC bid limit. Say if we sell a product that costs $5.00, we may wish to set a CPC bid limit of $5.00 maximum, so we never pay more than the maximum limit for a click.

By setting a limit we have more control over our costs, but we also may restrict the ad position or the number of click the ads receive. If we choose not to set a click price limit, automatic bidding will function the same way as it normally does, choosing whatever maximum CPC bids it determines will earn the most clicks possible within the set budget.

If a lot more control is required from our end on a day-to-day basis, manual bidding for clicks will be the best advised process to go for. Nevertheless for long campaigns & low budgets, Auto bidding is very useful.

Here are 3 key points which will help us understand the working of Automatic Bidding

• When you place a bid, you enter the maximum amount you’re willing to pay for the item. The seller and other bidders don’t know your maximum bid.

• We’ll place bids using the automatic bid increment amount, which is based on the current high bid. We’ll bid only if it’s necessary to make sure that we remain the high bidder, or to meet the reserve price, up to our maximum amount.

• If another bidder places the same maximum bid or higher, we’ll place another bid. Our maximum bid is kept confidential until it is exceeded by another bidder.

Contributed by Leo V J

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The fuel that drives every PPC campaign is your keyword list. The success of any PPC campaign will depend on the keywords that you target. We need to target the right keywords and the list should be exhaustive and robust.

The Google Wonder Wheel is one such tool which helps to build your keyword list and also gives you new themes and ad group ideas. The tool is an easy way to research your niche to find keywords that are current and relevant to your PPC marketing campaign. It not only gives you an endless supply of related search terms to look at, but also allows you to study competition.

Google Wonder Wheel by definition is a graphical wheel display of relevant search terms. Clicking on one of the search terms will open a new wheel of relevant search terms and so on.

The following is a step by step guide on how to use the Google Wonder Wheel tool:

Enter your key word or phrase and perform a search. After submitting the keyword you would like to search for, click on the “show more options” link on the top left side. The results will be divided in to two screens. Among all the options, that Google offers to optimize, the Google Wonder Wheel is the option you should look out for. Remember to check the other ones as well once you are done exploring this tool.

Clicking on the Wonder Wheel link will create a sun shaped circle of terms, which are related to the original search. You can navigate your way around relevant keywords and phrases to find more results. The power of the wonder wheel is that it is such a natural way to brainstorm and very much mimics using pen and paper or a white board.

Contributed By Shweta Gaonkar

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Let’s continue our optimization process to improve PPC campaigns’ performance:

Go Vertical

Going vertical is an effective method to lower your cost per click (CPC) and to improve the overall traffic quality. The quality also tends to be better because of the increased propensity for the buyers to use vertical search engines in their purchase decision process. This gives a greater opportunity for those who are with limited budgets to more effectively spend their money online and to get higher ROI.

Keyword Research

While doing the keyword research we debate constantly on what to use with regards to long tail keywords or the head phrases and which would perform better and get more results. Head phrases are generic and broad keywords. The search volumes for these keywords are very high but cost is also quite high. Torso keywords are with 2 to 4 words keywords. The search volume for these keywords are low as compared to the head phrases, but the cost is also low. Long tail keywords are the keyword phrases which are more than 4 words. The cost and the search volume is very low.

While developing keywords for your search campaign make sure you are in the shoes of searcher. The keywords should be related to the target market and useful to the searcher while searching for your product or service.

Quality Score

Google and Yahoo use quality score to increase the quality of ads to improve the user experience. If the advertiser provides the consumer with the best experience possible, then the quality score for the advertiser should be good.  If the quality score is poor, you should check the keywords, ads and landing page and re-cluster the ad groups to improve your quality score.

CPL than CPC / Suggestion: CPL over CPC

The ultimate objective of your search campaign is to lower the cost per conversion. So bid high or bid aggressively on converting keywords and bid low for the other keywords in the campaign. Even when you bid high, you get conversions within your target cost per conversion.

Happy Optimization!

Contributed by Rajasekar Ragavan

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Quality Score is based on the relevance to users search query and user experience in your website or landing page. As per Google bid price policy, the higher your quality score is, the lower you pay for your clicks and the higher you can get in position in PPC ads.

Below are the ways to improve the quality score

• Increase your click-through rates. Always try testing your ads to improve click through rates. Always keep the ad settings to rotate while you are testing ads. This will allow the search engines not to show well-performing ad over the other, but instead they will rotate ads 50/50. As a result you will know the better performing ad which increases click-through rate, which means a higher quality score.

• One way to achieve a higher click-though rate is to have fewer keywords in each ad group. This will allow your text ad to display the actual keyword in your ad group, which results to be more relevant to the target user. This will help you to increase your click through rates.  It’s never late to organize your ad groups to improve your quality score. It’s okay to only have 5 or 10 keywords in each ad group. Adwords Editor will help us in this process to cluster the keywords easily and faster.

• Delete or pause non-performing keywords and ads. By doing this, your quality score improves as your account have only high CTR keywords and ads, all your non-performing ads & keywords are not active.

• Always check your keywords. As quality score depends on how well your keywords relate to your ads, and how your keywords and ads relate to your landing pages. Always try to use your keyword on your landing page.

• Landing page load times do matter. As quality score was implemented to have a great user experience.  Having a slow landing page load time can influence your quality scores. It’s very important to load your landing page within 3 seconds in all browsers, personal computers and Mac systems.

All your keywords in Google will have a quality score associated to them. If you have a quality score fewer than 7 then it’s time to change or test your ads to improve your quality score.  Always try to change keywords in to a different ad group or try changing ad messaging.

These changes will take time to get effect in your account. Might take couple of weeks to build history & improve the quality score.

Contributed By Ajesh B

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Pay per click advertising offers Internet marketers a fast way to drive targeted traffic to your websites. The problem of course is that a lot of website owners lack marketing experience and fail to “set up everything right”. The result is that they end up losing rather than making money with PPC advertising.

A lot of variables have to be considered and if you get any one of them wrong your whole campaign will suffer. Variables include keyword choice, how you phrase your PPC ads, the web copy and design of the landing page, price and profit margin on the product/service being sold.  At the end, none of this can help the fact that anybody can click on PPC ads. People not interested in what is being offered can also click your ad. The reason for this is that PPC ads target keywords but not the demographics of the ad readers. At least, that was the case until Facebook set up its PPC advertising service and included demographic targeting as part of the package. Social networking sites are all over the internet today. It’s being used for much more than simply meeting new friends.

With demographic targeting, Facebook has effectively removed one of the causes of failure of pay per click advertising campaigns. A common complaint from many website owners is that their advertising is not reaching the right audience.  Facebook PPC ads are perfect for targeted audiences. With demographic targeting, Facebook PPC clients will be able to set up ads which would appear on the Facebook pages of people who are tightly defined as part of their target market. Advertisers can select from a number of variables such as age, gender, marital status, geographical location, hobbies and interests. When ads are as well targeted, copy writing becomes a much easier process. You have a much better chance of generating targeted clicks to their sales pages.

Some items you would need to keep in mind to create your Facebook ads

1. Decide on whether you want to advertise your own webpage or something on Facebook, like a Page, Application, Group or Event.
2. You can upload images of your product along with your facebook ads. Image will be resized to fit in 110px wide by 80px high box.
3. Create concise text messaging which speaks directly to the target audience you want to reach. Your facebook ad headline can have up to 25 characters in length and the main body can have upto 135 characters

The expectation is that Facebook is going to be adding enhancements to their PPC advertising service pretty rapidly in the near future. When you have over 200 million ‘members’ it can be incredibly powerful to slice that group into more and more targeted segments so advertisers will have success without breaking the bank. Should be interesting to watch.

Contributed by Shweta Gaonkar

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As we know MSN keyword report does not provide us the keywords that are actually used by the user. Here is a way to track these keywords in MSN:

We need to use a dynamic variable ”Query String” to track these keywords, Query String automatically populates the actual search query to the given tracking parameter.

Sample URL: www.position2.com/?utm_term={Query String}

Other possibilities that we can track

There are two ways to use this data for keyword optimization:

1)     Add the relevant keywords to campaigns to get more reach

Exclude irrelevant keywords

Contributed by Sudheer D

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When you run a search marketing campaign, the questions is bound to arise at a point of time whether we should bid on our competitor brand keywords?

There is no correct answer for this question in reality. It’s legal that you can bid for a competitor brand keyword. So is it worth?  When you want to bid on your competitor brand keyword, just have these following thoughts in mind

•  What you offer is a relevant or an alternate to whatever your competitor has to offer.
•  Check the price & compare it to yours. If you have low price then you can bid for it.
•  When the competitor is targeting your brand keywords then boy don’t even think about it fight back aggressively.

Some situations you shouldn’t bid on your competitors brand keywords when,

• Your competitor price is lower than yours.
•  You are worried that your competitor will fight back by aggressive advertising on your brand keywords
•  You don’t want to take a chance.

Key points to remember when you bid for competitor brand keyword.

• Avoid keyword insertion in your ad messaging (not to use dynamic insertion).
• Don’t be disconcerted by small traffic volumes from competitors brand terms.

So, as you can see there is no definite yes or no answer to whether bidding on competitors brand keyword is a good or bad thing.  However, think about the points above and if you choose to begin bidding on competitors terms TEST the results and then analyze the data.

Contributed by Rajasekar Ragavan

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When choosing keywords for your PPC advertising campaign, it’s important to give careful thought to the use of branded/corporate keywords, or keywords that support your company’s brand name. Some advertisers believe that bidding on their own brand terms is a waste of money. The reason being that the user has decided to convert with the brand he searched for and it would make more sense if he did it by clicking on the natural listings. Brand terms almost always appear at the top of the natural listings, (but not always). So why waste valuable budget on PPC?

By not bidding on your brand, you are missing whole lot of traffic & conversions:

• A branded term always outperforms non-branded and competitive terms because the searcher is looking for the brand.
• Because the conversion rate is so high, branded terms delivered a much higher ROI than other terms, even competitive brands keywords also have good ROI, but they usually come at a higher price.
• Make sure you protect your brand by bidding on it because competitors will not miss out an opportunity to bid on your brand and steal your traffic. Bidding on branded keywords is your best line of defense against brand theft.
• Brand keywords will have very high CTR therefore brand keywords will have lower average CPC, and will result in very low CPLs.
• Bidding on your brand terms reduces the possibility of the more expensive generic ad appearing for brand + generic searches as a result of Google’s broad match algorithm. So if you not bidding on brand terms you will end up paying more as you ad will appear for generic terms.

For example – User searching for Club Mahindra resorts will see ads triggered for resorts, which will be expensive.

• Brands clearly are powerful keywords, not only for the brand owner, but also for the channel.
• In addition, repeated clicks on the ads generated by the very same search terms were more likely to come from brand terms .This happens because after a bit of searching around, viewers are more likely to return to make their purchase by using a brand term. For this reason, it’s crucial that you’re bidding on your brand name and all its variants.
• Always check for competitive advertisers on your brand terms. And make sure to bid on those competitive brand keywords.

To conclude, it’s crucial to have a wide variety of strong, relevant brand terms in your account live at all times.

Contributed by Manisha Singh

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Recently Google released their new trademark policy for the United States. This latest change has the potential to have a greater impact on PPC campaigns, which is why PPC account managers are taking notice.

This new policy allows using the trademarked terms in ad creative by resellers, affiliates, aggregators, unaffiliated informational sites, sellers components, replacement & compatible parts in US market. So there will be no more whitelists or blacklists maintained by Google’s systems – use of your trademark, as long as it seems legitimate, will be allowed freely.

Google is already facing two class-action trademark lawsuits, and as Eric Goldman on his Technology & Marketing Law Blog says, this move could open them up to more.

So how much impact will it show if global advertisers respond to this significant change in policy? What actions should you take immediately to mitigate the risk of having your trademark used incorrectly by your reseller network, affiliates and potentially competitors?

Action items:-

1) The key action you can take now is to refresh your guidelines for trademark use with your reseller network and affiliates. You cannot depend on Google to use it anymore – but you can still clarify exactly how these partners may use your trademark based on your contractual agreements with them. Setting standards such as ad content, format and even bidding rules will reduce problems in future.

2) If your trademark is being used by advertisers posing as legitimate resellers, you can still file a Digital Millennium Copyright Act (DMCA) complaint with Google.  A successful DMCA complaint will not only remove paid ads of these advertisers, it will also remove their natural search listings entirely.  You can find more information in this link: www.google.com/dmca.html.

Contributed by Ajesh B

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