The Death of Bid Management, Revisited

The previous post (Bid Management Is Dead) probably should have titled “You’re Not Ready For Bid Management”. If you go back and read it again under that title it’s somewhat less controversial. But it probably would have garnered a lot less tweets and comments, so looking back maybe it wasn’t a bad decision. 🙂

Bidding Isn’t That Important

biddingThe phrase from the post that got the most attention, aside from the title, was ‘bidding isn’t that important‘. Many of the thoughtful comments from some of my favorite PPC’ers were defending the honor and importance of bidding. Obviously they’re correct. But ‘bidding isn’t that important’ was preceded by ‘For most paid search advertisers’ and I’ll stand behind the full sentence and even repeat it: For most paid search advertisers bidding isn’t that important. The point of the post was intended to be the one made by the cute little skiing analogy – advanced tactics aren’t necessary until after you’ve mastered, or at least made substantial progress on, the basics. Every month get to look inside dozens of new paid search accounts. From clients to prospects to folks I meet on airplanes who just want me to help them with their quality scores, I see exactly how all these accounts are configured in terms of keywords, match types, ad group organization, bids, and all the other factors. It’s rarely a pretty sight.

Is The Keyword Bid-Ready?

The vast majority of paid search accounts that I see are terribly constructed and poorly managed. They’re filled with entirely too many broad match keywords. They have way too many keywords per ad group. Their ad copy is completely uninspired, and worse shows no signs of having been well tested. Their quality scores reflect these facts. And their bids do not seem well chosen. This is who the last post was aimed at. The huge number of account managers – and sadly I don’t even think they know who they are – that need to work very hard on fundamentals before getting deeply into bidding strategies or tactics. My advice in these cases is to fix these problems in the order I just complained about them. In such massively sub-optimal accounts, bidding is not a priority. My worry, because I see it several times each week, is that these advertisers and even professional search managers hear so much about bid management as a core element of paid search that they’ve been missed the fact (not surprising because I’ve never heard it mentioned anywhere else) that there is a pre-requisite to bid management. It’s a 300-level course and you can’t take it until some other requirements are complete.

What The Pro’s Know

bidding2As several of the smart folks from RimmKaufman pointed out, paid search management is an iterative activity, and search managers can walk and chew gum at the same time. Ideally, you’ll make the best bid decisions possible at every stage of campaign development and tuning. If you’re playing the game at their level that is absolutely correct. But with respect I’d suggest that the RimmKaufman’s (and their lucky clients) and Zaharias’s and Summerhill’s and Fergie’s are all PPC PHD’s (and beyond). These folks and anyone like them obviously wisely spends considerable time and resources on bid intelligence.

What Many Others Don’t

Unfortunately, it isn’t easy for most paid search advertisers or managers to know if they or their account or keywords are bid-ready. Ironically in an industry with as much shared knowledge and free resources as any there is neither an automated account grader nor a simple and widely accepted set of rules-of-thumb to simplify self-assessment. If I had to compose a test, I’d start with these questions:

  • What percentage of your revenue is driven by Broad Match keywords?
  • How many keywords are in your average ad group?
  • What is the largest number of keywords in any ad group?
  • How many keywords attract over 25 unique search queries?
  • How many text ads were testing in each ad group before you arrived at the ones now running?
  • What percentage of your keywords, on an impression weighted basis, have quality scores below 7?

Questions like these and perhaps a half a dozen others, can give a sense of how well the basics of PPC have been implemented and executed.

The Truth About Bid Management (Part 1 of 100)

Yes bids need to get set along the way. The ‘perfect’ answer to all of the above questions is not reached easily or quickly. Yes bidding in an iterative process that ideally would be done and redone as this road to perfection is achieved. And the farther one gets the greater percentage of time and level of effort bidding deserves. My argument ‘against’ bidding is really just the suggestion that there is a threshold – a minimum level of campaign quality – before fine tuning bidding should much of a priority. I believe this both because until that time non-bidding activities have more impact, and because the data generated by an ‘under-developed’ campaign is dirty and a poor basis for any bid algorithm or strategy anyway. That last bit will be the subject of more posts in the near future. So my esteemed colleagues are right. Bid management is not dead and can in fact be quite important. But I think that the point of the previous post was completely valid. For many advertisers, depending on the state of their account and their skills, bidding is overemphasized and over-rated. Bidding is also hard to get right, easy to get wrong, and I believe many elements of it are dramatically misunderstood. Perfect fodder for future posts.

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