Live from #SMX East 2014 – A Deep Dive Into Bidding Strategies & Bid Modifiers

By Tad Miller | Oct 1, 2014
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A lot of people think they understand bidding, but bid modifiers are still a relatively unknown bidding option for many PPC marketers.  So this session has the potential to bring a lot of people up to speed on it.  Speakers for this session include:

  • Lauryan Feijen (@lauryanf) an Online Advertising Specialist from iProspect
  • Ian Lopuch (@ianlopuch), Vice President of Customer Acquisition from eHealth
  • Jay Stampfl (@3QDigital) the Account Director of 3Q Digital

Brad Geddes is the moderator.  The session description says that:

You pay when users click on your search ads. But not all clicks are equal when calculating ROI. In this session, you’ll learn to maximize the return on your paid search campaigns by using modifiers that automatically change bids by various dimensions, such as time of day, geography, and device type.

Bidding Pannel

Ian Lopuch, Vice President of Customer Acquisition from eHealth

Ian Lopuch is first – e-Health is about health insurance lead generation.  He has 10 lessons learned to share:

  • Traditional CPA bidding is pretty bad
    • Not very optimized and it’s a competitive marketplace.  It’s not efficient enough.
    • Doesn’t value anything.  Attach rates and lifetime values aren’t taken into account.
  • CPL (Cost Per Lead) bidding is even worse
    • Not all leads are created equal – they don’t always close.
    • Even if you sell it’s still not very good in the long run.
  • Modern CPA and CPL-based bidding with aggressive feedback loops works
    • Use feedback to do bid multipliers on bids.
    • Use granular bid strategy.
    • Bid up and down on certain geographic areas based on performance.
  • Great account structure and segmentation makes your bidding excel
    • Solid account structure matters.
    • Segment where possible on: Geography, Network, Match Type, Keyword Theme, Device
    • Incorporate differences in conversion rates and back-end performance into bidding.
  • Revenue-based bidding is the future
    • Find a way to incorporate revenue down to the keyword level.
    • Also consider future projected revenue.
  • Buy a world-class bidding platform
    • The expense of bidding this way is prohibitive.
  • Think about the entire stack: search bidding cannot be a silo
    • You might not make money on the first click.
    • AdWords is very expensive – especially on insurance.
    • Integrate with e-mail and multi-channel marketing tactics like remarketing.
    • Search isn’t a standalone application anymore.
  • No sales yet? Leverage your data layer
    • Integrate with analytics.
    • Figure out attribution.
    • Give credit to shopping activity.
  • Search clicks provide some of the best value around
    • Search clicks are incredibly valuable.
    • Last click attribution is missing half the value of search and causes you to bid low.
    • Have a great attribution strategy in place to give value to assisted conversions.
  • Avoid competing with yourself
    • Coordinate with your business development and affiliate teams.
    • Internal campaigns are always better.
    • Partner channels can compete with you too.
  • Things can go wrong
    • Bid and budget changes create risk.
    • Have safety precautions in place and do testing and have rollback plans in place.

Jay Stampfl, Account Director at 3Q Digital

Jay Stampfl is next.  His points:

  • Account structure is important.  Do Query Mapping to get it straight.  Pay attention to how your keywords are matching.
  • Auction Dynamics are a balance between scale and efficiency.  There are dynamics between CTR and CPC.
  • There are a lot of changes with PLAs showing at the top of the search results now.
  • You can use auction insights to see what competitors are doing with their bidding changes.
  • Limited budgets are bad.  Lower your CPC to get more clicks in the day.
  • The longer the wait on the conversio, the higher the value of the conversion in his experience. Revenue increases with time.
  • Use the compare function in AdWords to show you how performance changes over time and identify trends.
  • Conversion Optimizer works for Jay and 3Q.  It used to be pretty bad though. It works better on high volume keywords.
  • Use gender as a signal to bid with on the Display Network.
    • Undetermined age has lower CPCs.
  • Use AdWords bidding rules to bid.
  • Use data aggregation in bidding – not always keyword-level bidding.
  • Stay aware of the layers of your bid modifiers.  It gets hard when you start stacking them to keep track of them.  There’s no way to see how they aggregate.
  • Clean cost / benefit analysis is the core of bid strategy.
  • Identify the High / Low assisted conversions

Lauryan Feijen, Online Advertising Specialist at iProspect

How can we manage our bids?

  • Define the target
    • a ROAS target is better than a CPA target
  • Reach the target
    • Manually with the AdWords interface (takes time and effort)
    • Manually with Excel formulas
    • Use Scripts and automated rules
    • Google “Flexible Bid Strategies”
    • Using 3rd Party bidding platforms
  • Overcome Obstacles
    • Keyword is already in top position
      • Cut off bids % over the top bid estimate (Example: 20% over the top of page bid estimate).
      • Check for Quality Score issues and fix them before changing bids.
    • New bid exceeds top of page estimates
      • These aren’t always accurate.
    • New bid is less than first page bid estimate.
    • Keyword has insufficient data.
      • Not all keywords will convert.
      • How probable is it that it will convert in the future?
        • Use other data to answer this question.
        • Use a Bayesian rating system to calculate probability.

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