Bid management software

A Bid Management is a software for automatic control of the commandments in search engine marketing (SEM). With a bid management tool as many search terms ( keywords ) can be managed through various paid search providers (eg Google Adwords or Yahoo Search Marketing ). The bid changes are transferred from the systems automatically to the respective channels, such as Google AdWords, via API. Here, the bid management is to help you determine for each keyword the optimal bid and adapt it continuously. In most systems, there are more or less complicated algorithms are used. For the user, calculated by the automatic Offer a time saving and usually an increase in performance.

Bid management tools provide additional functionality for ease of management of SEM campaigns. These include, for example, the areas keyword expansion, search queries analysis and display text suggestions, but also monitoring the landing page ( landing page ) or brand protection. Often bid management solutions are supplemented with campaign management tools. The customer receives a login area the possibility to perform intensive analyzes and resulting consequences directly to the campaigns and search networks to transfer, such as the dehydration of a so-called AdGroup to Google Adwords.

A trend in current systems is to extend the tools in the area of ​​tracking. Thus, more and more tools are not only the clicks that have occurred right before a measure conversions, but also the course ( Funnel ) in front, as well as other channels such as display and affiliate. Since affect the channels in terms of performance against each other sometimes strong, so better transparency arises in relation to the evaluation of the performance of the different advertising channels.

• 3.1 Rule-based bid management systems
• 3.2 Portfolio-based bid management systems
• 3.3 Evolutionary bid management systems

Benefit

The success of search engine advertising depends largely on the price at which a company wants to pay for a click on the ad in the search word or marketer needs. Therefore it is called the billing model and pay- per-click. The cost -per-click prices are determined through a bid system for each search word. The more extensive SEM campaigns (these can include hundreds of thousands of search terms ), the more difficult it becomes to optimize the commandments so that the targets are met. Targets can be the net profit, but also the cost of a purchase, dhCost - per-order (CPO), or the cost of a new customer contact, so cost-per -lead (CPL ). Help bid management tools to find on the basis of automated analysis, the statistically reliable, optimal bids.

The bid- management goals - bidding strategies

A bid management can serve different purposes, which can be specified in the system, the user:

Click maximizing, for a given budget

Here, the system tries to buy as cheaply as possible clicks. This is done by redistributing the keywords that are available through the clicks. For expensive keywords, bids are lowered and cheap keywords is trying to generate more clicks on a higher position. This strategy is suitable for those who want to take into account any difference in quality between different keywords, or can. In general, these are smaller companies and online stores who want to get traffic to their site only. The conversion behavior, so if for example a purchase is made, is ignored in this strategy.

Conversion maximization

In the Conversion maximizing not only the cost of the clicks are observed, but also the quality. This must be measured on a conversion tracking. Offered is this tracking by both the paid search providers themselves, as well as of the bid management tools. The installation of the conversion tracking code can be done by the Webmaster. The measure for evaluating the quality is with this strategy of cost-per -order (CPO). He tells us how many of the costs incurred for a conversion ( sale, download, application, etc.). Consequently, the keywords with the lowest CPO are the most attractive. The bid management tried accordingly buy as much traffic on those keywords. The optimization process takes longer here, because now in addition to the clicks and CPCs also the conversions must be considered, which are usually much smaller in number than the clicks. Thus, the system has to wait for data longer.

Profit maximization

This strategy is also based on the conversion measurement. However, the ratio used to measure the quality here is not the number of conversions, but their value. This can be transmitted in all current conversion tracking systems. Some tools also allow the comparison with the control system of the client, enabling precise contribution margin per order or conversion can be determined. For customers, this allows the most accurate form of optimization, provided he knows the customer lifetime value. Here, however, the volatility of the data is the highest, especially if the order value per keyword vary greatly. Customers with little conversion data therefore rather resort back to the conversion maximization.

Constraints

In addition to these indirect targets can be in almost all systems also direct targets pretend. These are, inter alia, request relevant position in the search network, maximum or minimum bids, compliance firstPageCPCs and AdScheduling.

Operation

Rule-based bid management systems

Rule-based systems to make decisions regarding a bid change due to rigid rules. These rules can be predefined by the manufacturer or specified by the user and extended ( see bidding strategies ). A combination of different rules with respect to the individual outcomes such as CPO, CPC, position, conversion rate, time, etc. allows for some customization to your own needs. However, the changes in the pay- per-click channels are very high. Therefore, the rules must always be checked and adjusted very often. We say therefore often of "half" bid management tools. As an object of modern systems, it is straight, independently figure out these rules and continuously improve. The problem of data scarcity is very high, for example in the Long Tail can not be applied in the absence of conversions or a non- existing historical conversion rate certain rules. Known systems with rule-based approach are among others Aquisio and DC Storm.

Portfolio-based bid management systems

Portfolio-based systems attempt by theoretical models the degree of optimization to increase by not each keyword is subject to rigid boundaries or rules, but the impact on the overall performance of the portfolio is crucial for the regulation of each keyword. Thus, individual keywords exceed certain limits, which may lead to an increase of the performance of the entire portfolio entirely if other keywords are in turn adjusted accordingly. The basis is the model of Markowitz portfolio optimization, which is very widespread, especially in the financial world, where significant influence as to the selection of shares in fund (see portfolio theory). It is natural to transfer the ideas of Markowitz in the PPC world and so to achieve a performance increase. However, this model needs to properly function a lot of information or data per keyword. In practice, these are usually not before and if they are present, they are subject to constant change. Thus, the mentioned in the article portfolio theory criticisms also apply to the Bidmanagements this genus: including: imprecise forecasts, since they relate only to historical data and some underlying assumptions are not practical. Known systems with portfolio- based approach are, inter alia, Efficient Frontier.

Evolutionary bid management systems

Here an attempt is made through continuous self - adaptation of the algorithm and the internal rules of the system to adapt to the constantly changing conditions and thus increase the performance continuously. The knowledge so gained is in a combination of portfolio- optimized and rule-based approach. There is a good selection rules and settings, and a displacement of non-functional approaches based on an evolutionary algorithm. By combining with the portfolio optimization of its benefits for a global optimization of the account to be used, but at the same time prevents excessive reliance on historical, obsolete data and rules. The decisive factor here is the constant back-testing to verify the results, as it has also established itself in the world of finance. Thus, the interplay between bid, position, CPC and clicks can be constantly adapted to changing competitive situations and clicking behavior. On this basis, the systems of this type per keyword try to map the entire bid landscape and to determine in this way the optimal bid.

Criticism

The benefits of a bid management system is often called into question. Too difficult and too complex for the task of optimizing the commandments appear. Especially against the background that in practice far have incorporated more than just the pure data in the optimization of the commandments. Rather, it is also important to anticipate what search words will be short and medium term the top performers in the account. An SEM Manager may, for example keywords already provide to the desired position before a certain event. He may at any time act as bid management systems can only react - and that's only as good as the data on which the regulations are based. If the data is low or volatile intense, then can work counterproductive a bid management depending on the quality of the algorithm even. Because where the SEM Manager conclusions can rethink the system acts strictly according to the given pattern. If an item is out of stock now, for example, then the conversion rate will plummet. The SEM Manager knows this, ideally immediately, the bid management needs so only on the basis of the data " learn ".

At issue is the use of the long tail. Here are by definition are not enough data per keyword before to make a statistically significant statement in a sufficiently short time. However, this is also the SEM manager like that. In practice, should be at an advantage here, the algorithms of the bid management systems thanks to profound calculations. However, the SEM manager can improve his results by skillfully combining necessary. However, this will cost him a lot of time in the long tail, of which the short-tail performance will suffer. It is natural to assume is against this backdrop that a well- optimized account needs both; a bid management with good algorithms and a SEM Manager, who is always in control and organized.

Trends

• Conversion tracking system

More and more, bid management providers build their own conversion tracking systems into their system. This increases the amount of data and thus the certainty with which the correct bid decisions can be made.

• OnSite tracking

Providers such as intelliAd expand their data to a private onSite tracking to be so incorporated about the bounce rate in the decision making process for keyword performance with.

• Phone Tracking

Information from the phone area, such as the number of triggered calls per keyword can be taken into account via a tethered phone tracking.

• Social Media and Display Advertising

Various providers like Efficient Frontier and Marin Software extend their systems towards advertising and social media.

• Intraday bid management (repeated Optimize a day)

That's one way to better exploit the buying behavior of users, as several times Bids can be optimized on the day. How can the advertiser get through Intraday Bid management even more profit from his campaigns. One of the driving provider seems to be Adspert.

• Bid Management with Google AdWords Scripts

In October 2012 Google released AdWords AdWords scripts. This is an integrated in Google AdWords programming environment with JavaScript, such as already exists even with Google Apps. This allows you to program your own bid management processes, without having to use this AdWords API or complex bid management systems. Google also offers custom scripts and examples, show the bid management processes exemplary. This is in the future, the existence of externalities bid management systems into question.

Bid Management with Google AdWords script also allows smaller advertisers to enter into the bid management, since it can now become much more affordable prices and without acquisition of servers or software directly and individually implemented in AdWords itself. So far, the bid management has been the domain of advertisers with large budgets because of the sometimes high fees for the systems. For these are the AdWords Scripts an alternative dar.