Should You Automate Your PPC Bid Management?

11 comments

Technology has enabled the automation of the many manually-performed and laborious tasks including pay-per-click management. And through technology, the science of performance becomes more precise. This is exceptional for pay-per-click marketing where measurable and controllable performance metrics like cost per click, cost per action and conversion rate drive campaign success. By automating your paid search activities, you can comfortably leave your campaigns run and allow the technology to produce satisfactory results for you, right?

Wrong! PPC Marketing is as much (if not more) an art as it is a science. Marketing intuition on word choice for ads, keyword selection, target segmentation and landing page conversion are essential to the art of developing and optimizing a successful paid search campaign.

Unfortunately, many businesses use automation to guiltlessly take a “setup and walk away” approach with their PPC campaigns. And like the outcomes realized prior to automation, this approach produces less effective and even poor results. It’s the art of managing a campaign, earned through experience, awareness and trail & error that build significant results.

For example, the brilliant science behind the algorithms driving Google’s search engine is calibrated to generate relevant keyword-driven results. The purpose is for the search engine’s “science” to help the average user find what they are looking for. We like to think that the science would always produce relevant results yet it is not the case. A skilled searcher, understanding the “art” of entering an effective search query and applying intuitive keyword usage (or just testing a bunch of keyword phrases), is guaranteed to retrieve better and more relevant results from Google.

So while pay-per-click automation provides a level of assistance with budgeting and bid management (especially with large keyword volumes and multiple search engine campaigns), the applied art of PPC marketing is what ultimately delivers superior ROI.

As technology becomes more “human” (e.g. artificial intelligence – checkout what Jeff Hawkins, founder of Palm is working on as showcased in Wired Magazine) then maybe PPC marketing will not require human intervention at all. But for today and the near future, the art of PPC marketing is a critical component to achieving high performance.

Have any questions? Do you disagree? Let me know!

About the Author

Kevin Gold is Director of Internet Marketing at iNET Interactive, a social media company operating prominent online communities for technology professionals and technology enthusiasts. Kevin is a frequent contributing author to multiple publications including Search Marketing Standard, Practical eCommerce, DIRECT, Entrepreneur.com, ConversionChronicles.com, About.com, and On Target (Yahoo! Search Marketing newsletter).

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11 Comments

  1. Greg

    Kevin, I do not necessarily disagree with what you're saying - but PPC bid management is not that fantastic as you make it out to be. Bid management software only used to REALLY work on old Overture platform, however, now that it's out of the picture - I just don't see how bid management will help PPC marketers effectively/efficiently manage the campaigns (unless, of course, you're running campaigns on 3rd tier engines). With search engines stressing relevancy/quality of landing page/ad more & more - bid management is pretty much useless. Thanks, Greg

  2. Greg, I don't think Kevin is saying that PPC bid management software is great. In fact, I think he's saying the exact opposite. Advertisers cannot just "setup it up and walk away”

    So while pay-per-click automation provides a level of assistance with budgeting and bid management (especially with large keyword volumes and multiple search engine campaigns), the applied art of PPC marketing is what ultimately delivers superior ROI.
    Again, Kevin is making the point that automation, although sounds appealing in theory, does little to deliver good ROI without professional supervision. Many SEM companies use big management software. What they don't do (hopefully). is automate the whole process completely.

  3. I think Greg read Kevin's first paragraph and not the second :) That first paragraph was all that was displayed on the homepage, so I can see how he may have missed the meat. For my two cents, I do mostly organic SEO and a little PPC. To try and be more efficient I gave a short try for KeywordMax's bid management. Honestly, it took so long to setup that I believe I lost any efficiency gains, and decided that for most of the smaller PPC campaigns I manage its quicker to do it all myself manually and have greater control. For very large campaigns, you should be able to justify the cost of a decent amount of human time to run those campaigns in many cases.

  4. Samuel

    Kevin, What Bid Management solutions on the market did you try out? Would you say that some are better than others? Samuel

  5. Hi Samuel, First let me explain that there is a case for using PPC bid management but in proper balance with PPC expertise and ongoing "hands-on" attention. Technology cannot replace the hands-on effort necessary to optimize a campaign. To answer your first question, I have tested the majority of stand-alone PPC bid management solutions including BidMaximizer and KeywordMax referenced by Jon above. Many of them run off of a similar platform and lack the ability to handle the complexity of pay-per-click marketing. The complexity specifically relating to managing by cost per action per keyword or keyword theme within the many variables including budget allocation, matching options and so on. At this point, I prefer (and therefore my company performs) PPC management manually by relying on campaign tracking, reports and hands-on attention to detail. This may present a scalability issue in the future because talented PPC specialists are in short supply (hence why many companies have to relay on technology) but for now it works best for our clients. In terms of your question "Would you say that some are better than others?" I wouldn't because the more sophisticated ones are more expensive and the cost/benefit just doesn't justify it - at least not yet. PPC bid management is a big market with interest among private investors but whether or not a strong solution will be available for small businesses is difficult to predict.

  6. I would love to hear what Efficient Frontier has to say about this. They base their entire business plan on a Hedge Fund algorithm. Its a very impressive presentation, but feels like it relies a little too heavily on the technology. As a SEM I would like to think that technology is there to enhance my skills not replace them.

  7. Today, technology can replace an assembly line worker or a train conductor but it is still a long way from replacing a marketing professional.

  8. Aaron Wolski

    Ahh but technoloy + a marketing professional = God Status in the eyes of my clients. Those not willing to use IA based software solutions like that of those offered from WSS, WebTrends (Clickshift) or Omniture are, in my opinion, missing the boat. It is true that technology cannot replace experience but when you already have the experience, technology can free you up to A) manage more and bigger budgets; and B) perform better. I will continue to employ both experience and technology. Aaron

  9. Totally agree with Aaron... use technology to automate the things that machines can do (e.g. analysis, number crunching of data), but employ humans to do the stuff that really needs "people power," such as determining tolerance for tradeoffs between ROI and volume, coming up with keyword groupings for maximum relevance of an ad group, ad text creation, landing page design, etc... it's definitely a balancing act.

  10. I completely agree with Kevin. I used automated bid management at the beginning of the year when my company got it through a package deal with a source I wont name. It really got me excited at first because I started to see my sales numbers in dollars skyrocket. But I was brought back down to earth when I started seeing my Cost Per Click numbers. I scrapped it about 3 months later and although my sales in dollars went down, my CPC numbers were almost cut in half and my ROI was a whole lot better. I truly believe it pays off more if you take a couple hours out of the week to check PPC campaigns yourself and not rely on fancy software to do it for you.

  11. Assuming good PPC Bid Management software is a labor saving tool when used by an experienced hands-on manager, and not a replacement for that manager, is there a general ad buy threshold where it starts making sense to go through the effort of researching, implementing, and learning such a tool? Particularly when it comes to AdWords. -T