Looking for new ways to boost your search marketing efficiency during the downturn? I suggest you start by checking under the hood. Make sure that your search bidding technology is up to snuff.
Getting things right with your bid management starts with understanding where the potential for efficiency really lies within your keyword bids -- and why so many smart search marketers drop the ball on managing keyword bidding correctly.
Why keyword inefficiency happens
To really grasp how much efficiency can be lost through poor keyword bidding, you need to understand how complicated a keyword buy really is.
Think of it this way: different keywords in your campaign have different costs-per-click, traffic levels, and conversion levels, resulting in different types of conversions, each of which represents unique revenue and branding opportunities. Meanwhile, each one of these variables can change with the slightest adjustment to your ad's ranking within the paid search results. All of these factors can dramatically impact the ROI you get from every one of your search clicks.
If you think all of these keyword-buy variables make things unbearably complicated, it only gets worse. Since competing search advertisers are constantly changing their bids, the prices for the keywords you want to buy are rising and falling all the time. Sudden changes are to be expected as a result. Therefore, your low-cost, high-ROI term could suddenly become expensive, bringing your ROI down with the price change. Meanwhile, your low-ROI terms could hit bargain-level prices while you're not looking -- and if you don't see the price change, you could be losing an opportunity the moment you move your eyes away from your search marketing dashboard.
In other words, capturing all the opportunity possible for your search campaign requires you to match the right keyword, at the right bid position, with the right conversions -- all while also possessing the ability to shift your keyword bidding to adjust to market conditions, all at a moment's notice. And it requires that you repeat that performance for every keyword within your site.
Across tiny campaigns with dozens of keywords or fewer, that's a momentous task. For campaigns with hundreds, thousands, or hundreds of thousands of terms, this is simply impossible -- and so the chances for opportunity loss are basically infinite.
That, in a nutshell, is the efficiency problem that all search marketers face.
Efficiency problems, technology solutions
As with many other problems that are too physically and computationally difficult for humans to solve, there are technologies designed to solve the efficiency problems in search. And given the challenges that keyword inefficiencies create, it's no surprise that many businesses spend anywhere from hundreds to millions of dollars annually on bid management software, letting machines capture opportunities that humans can't.
Because machines are able to make quick, complex calculations on their own, they're enormously more efficient than the alternative: humans making keyword-by-keyword bidding decisions on spreadsheets and typing updates directly into search dashboards. Bidding technology lets everyone do what they do best: It lets machines do the computational grunt work of managing keyword bids, while freeing people to do the creative and analytical work involved in bidding strategy.
Unfortunately, there's plenty of opportunity that still falls through the cracks of most search bidding platforms -- simply because of the way those search platforms are built. Some search platforms bundle large groups of keywords into a single overarching category, sweeping over nuances between keywords that could be leveraged into greater ROI for each keyword buy (this method is often called "portfolio" bidding). Additionally, many automated bidding systems update keyword bids at a rate that ranges from once every few hours, to once a week. Consequently, there's simply no way for those slower systems to take advantage of the changes occurring in a real-time, auction-driven bid marketplace.
So while plenty of companies are wise enough to manage their keyword bidding through a technology, many don't realize that their bidding technologies are leaving huge amounts of opportunity left untouched and are generating real losses by causing them to bid unnecessarily for high-cost clicks.
Further complicating things, some search marketing providers refer to their bidding systems as "real time," implying that they update bids moment-by-moment, when in fact they offer real-time reporting of search performance, not real-time bidding. In other words, those systems let you watch your opportunity loss as it happens, but you are unable to actually take advantage of the opportunities the market provides.
The technology you need
The lesson here is simple. You need to be certain that you're maximizing the efficiency of your search campaigns by using an automated bidding technology that offers you all the opportunities that search market provides. Ideally, this means dealing with a platform that optimizes keywords bids, on each keyword, at every moment. More broadly, it means fully using what's available to you within your marketing budget to meet the business goals you've set. Whichever technology you choose, you must realize that the difference between the right search technology and the wrong one means the difference between leveraging -- and failing to leverage -- all the opportunities the search marketplace has to offer.
In times like these, marketers need all the opportunity they can get. To be sure that you're capturing all the opportunities you can -- even when such opportunities are scarce -- be certain that your bid technology provides real value.
Mark Simon is vice president of industry relations at Didit.