Monday, July 20, 2009

SEM 101: PPC Bid Management, Part 2

There are times when manual bidding is enough, and other times when an automated solution is what's needed. Whether you use an automated or manual bid management system, it really takes a good balance of human and computer interaction to produce the best results.
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SEW Expert - Ron Jones
PPC Bid Management, Part 2
More SEW EXPERTS: SEM 101 SEW EXPERTS: SEM 101

By Ron Jones, Search Engine Watch, Jul 20, 2009
Columns  |  Contact Ron  |  Biography

We covered the basics of PPC bid management in part one, and briefly reviewed some of the available software tools. Thanks to those who posted additional tools in the comment section. Because there are so many tools, it's good to get opinions from those who use them.

Now let's review some differences between manual and automated systems and bidding strategies.

Manual Can Be the Right Approach

If you're spending less than $5,000 per month, then using the search engines' bid management system may be all you need. Did you know that approximately 65 percent of Google advertisers spend less than $5,000 per month?

The point is that you probably don't have enough data for an automated system to make a significant difference. Automated tools do better when there's a larger dataset to work with.

Another benefit of an automated system: it provides rapid responses to fluctuations in keyword value. Again, if your data set is small, this isn't a big issue.

Rules-Based Bidding

Rules-based bidding is the process of setting up special rules to manage the bidding process. The advantage here is that if the conditions are true, then the bids are adjusted automatically.

For example, let's say for a set of keywords you want to bid to position two if the bid is less than $3. If it's more than $3, then drop it down to position seven. In this example, the system manages the bids based on a hunch rather than actual data.

Predictive Modeling

Another way to approach bid management is through predictive modeling. In this case, you need to identify the value of the traffic you might get from your ads, and then set your bids to a fraction of the value you're willing to spend on your marketing efforts.

This requires analyzing past data you've collected, and a keen eye. You'll also need to make observations on events that might impact the variables.

For instance, let's say that historically you've enjoyed increased sales during Memorial Day weekend. You know this holiday will impact the variables. In this case, you can increase your bids by X percent during the weekend and then lower them to normal afterward.

Other General PPC Bidding Strategies

Your bid strategy needs to be different for each search engine. Each search engine has its own system that requires different approaches.

A common strategy is bidding for the top keyword or ad position. You need to be careful with this strategy, because the outcome could be very costly if not done correctly.

Searchers have a tendency to do a couple of searches and click on a couple of ads until they find what they want. A good strategy is to start with a bid position around five, analyze the results, and then gradually work it up to the desired position.

Human and Computer Balance

Whether you use an automated or manual system, it really takes a good balance of human and computer interaction to produce the best results. Always take time to analyze your results and make course corrections when necessary. Don't assume that you can just sit back and enjoy the ride if you use an automated system.

What other bid strategies have worked for you? Please add your comments below.

Join us for Search Engine Strategies San Jose, August 10-14, 2009, at the McEnery Convention Center. Spend Day 1 learning about social media and video strategies with ClickZ.

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Biography
Ron is President/CEO of Symetri Internet Marketing, which provides strategic SEM consulting and training. Ron is actively involved in the SEM community and speaks at conferences and seminars, as well as hosting regional SEM events where he provides participants SEM training and education best practices. Ron also serves on the Board of Directors for SEMPO and is also one of the authors for the SEMPO Institute Fundamentals and Advanced courses.

Article Archives by Ron Jones:
» PPC Bid Management, Part 2 - July 20, 2009
» PPC Bid Management 101 - July 13, 2009
» Blogs and Blogging 101, Part 2 - July 6, 2009
» Blogs and Blogging 101, Part 1 - June 29, 2009
» Effective PPC Ad Copy 101, Part 2 - June 22, 2009
» Effective PPC Ad Copy 101, Part 1 - June 15, 2009
» More Articles by Ron Jones


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