Analyticsshutterstock_93194713 (2)

The Untold Truths Of Bid Testing

Add Your Comments

 

For any sort of online business, particularly online retail businesses, PPC is a way of life. Unfortunately, resource constraints often result in some program elements not getting the attention they need, which ultimately limits the growth of sales and revenues. Looking at the competitive online advertising market and the tactics behind a successful paid-search program, the first and most consistent piece of the program to get cut is the practice of bid testing.

We’ve spoken many times about the importance of implementing full bid testing operations to build the most successful PPC programs, but, for most, the perceived costs of such an endeavor prevent them from ever beginning bid testing. Even worse, certain businesses who want to at least marginally address bid testing will use an easily-implemented methodology that costs them more money than they think a more robust operation would.

Why You Should – Discovering Value

Let’s address the elephant in the room upfront: bid testing, contrary to popular belief, need not cost an arm, leg and business in order to be run properly. While the concept of constantly placing and adjusting bids up and down sounds inherently costly, a well-maintained bid testing operation will actually recoup all click costs while also giving you valuable information. In other words, bid testing is about investment. In fact, a properly executed bid testing program will generate more revenue, more clicks or more efficiency and, overall, more return or savings over the course of a year than the incremental money spent on the program itself.

Secondly, bid testing is not a black hole for marketing dollars if you use a pragmatic methodology that doesn’t rely on current position or current bids as a starting point. Bid testing done right will make position and bid largely irrelevant as it can measure present value-per-click, making it easier to maximize profit or conversions depending on your business’s own objectives.

Finally, bid testing provides the opportunity to open up the PPC arm of your marketing organization to the broader business. A structured bid-testing program can detect changes in consumer behavior and in the broader marketplace, making a profound impact on driving an organization towards what it needs at a given time, whether it’s saving money, increasing awareness or generating sales.

What to Be Mindful of in Moving Forward

All the above benefits of bid testing are highly dependent on creating a full-fledged, ongoing bid-testing program. Time and time again, companies have dabbled in bid testing, performing it sporadically or systematically a few times per year. This haphazard approach to bid testing leaves no opportunity for true insights that actually inform successful PPC marketing. In fact, testing just a few times per year ultimately costs your organization more money than not doing it at all since you will be essentially placing arbitrary bids based on data that is not sufficient to be of any real value.

Additionally, not monitoring and testing on an ongoing basis often results in paid-search marketers playing catch-up due to changes in consumer behavior and their competition moving ahead faster to address overall changes in the industry. This knee-jerk adjustment creates a huge discrepancy between what may be most valuable to the business’s objectives and what they are actually paying – again, costing more money.

This means that in truly doing bid testing, you should dedicate resources to measuring your keywords on an on-going basis and tracking your keyword data on a constant basis. As we often say, things people measure tend to naturally become better over time, and bid testing fits perfectly into that role to make your PPC operations that much better.

Image: Analytics from Shutterstock

About the Author

Robert Cooley, PhD, is chief technology officer for OptiMine Software. He is known for his groundbreaking work in web mining, with over 15 years of experience managing projects and analyzing data, with a focus on ecommerce, CRM, and unstructured text. OptiMine develops technology that dramatically improves online advertising performance and solves complex pricing problems.

Add Your Comments

  • (will not be published)