The Case for Automated Bidding

If you’re looking to refine bidding in your PPC campaign, understand why automated bidding provides greater reliability and flexibility than that of a manual solution.

When it comes to managing the bidding workflow in PPC, there’s an often debated question in the industry: “Which is more important: the bid management tools used or the person who does the managing?” At times the argument becomes self-serving – artisans who manage their programs manually highlight the micro-managing abilities of the human, and tool providers arguing that it’s all about the algorithms, analytic power and automation.

The Great Manual Versus Automated Debate

One of the main arguments in favor of manual bidding focuses on the control that it affords the search marketer, in contrast to the hands-off nature of automated bidding inherent with publishers like AdWords “Smart” bidding and most (but not all) 3rd party proprietary bidding algorithms.
 
In many automated bidding approaches, the search marketer sets a goal, and the bidding algorithm reviews historical performance before calculating a bid, at times with limited transparency from start to finish. This sense of surrendering control is most realized when a campaign is underperforming, and the search marketer is often at a loss for what’s amiss or how to improve it.
 
Putting that fear aside, the many benefits of a more transparent automated bidding solution deserves consideration based on its merits and popularity.
 
Efficiency
Automated bid management is a huge time saver and allows a manager to move mountains quickly. Think for a second – how long would it take you to manually change a million keyword bids? How confident would you be that each bid is optimized to maximize your return?
 
If you’re being honest with yourself, the answers to those questions should naturally steer you towards automation as the optimal solution. Automation augments the search marketer by executing repetitive tasks, serving as an ‘enabler’ for the search marketer to focus on growth opportunities or account strategy while keeping tabs on daily performance.
 
Accuracy
Automated bid management platforms produce accurate bids through regression modeling that looks backwards to predict future outcomes. With millions of dollars at stake, these algorithms are typically built with risk aversion at their core to produce low error rates. By their very nature, they make changes at a scale that’s quite literally impossible for any individual, or even team, to compete with.
 
The reality is, sophisticated marketers with a material budget use an algorithm to bid on their media today. If you aren’t, you’re putting yourself at a disadvantage.
 
Flexibility
Automated bid management platforms allow advertisers to define the goals and milestones for the algorithm to work towards. The marketer remains the operator and the brains of the operation, with the bidding algorithm working as his proxy.
 
The usefulness of this customizing ability for large online retailers is evident in the following example:
 
Say your inventory consists of 100,000 products with specific SKU numbers, product names, manufacturer names, product categories, prices, URLs, and inventory level in your backend feed – proprietary inventory management solutions can help you automate the process of updating 100,000 ad groups (1 ad group per SKU) in real-time:
 

  • Keywords: You can build your own combinations of keywords such as [product name], [product name] + [manufacturer], [product name] + [product category], and so on. Then you can decide whether you want to activate exact, phrase, modified broad, or broad match types.

 

  • Ad Copy: You can write very specific ad copy based on the number of characters in the product names. For instance – if the [product name] is less than 25 characters, then use it in the headline, and so on. You can also inject the [price] using AdWords Ad parameters so the Quality Score does not get altered.

 

  • Keyword/Ad Copy/Ad Group Statuses: All those statuses can be updated based on inventory levels, such as if [availability] = 0 then pause, or if [availability] < 5 then pause.

Clarity and Confidence in Automated Bidding

Ultimately, the search manager has the flexibility to overlay bidding rules to ensure the algorithm behavior is consistent with their risk tolerance and strategy to hit certain goals and milestones.
 
The best bidding solutions also allow you to manually override bids on specific keywords if needed. This gives PPC managers the full control of manual bidding with all the time saving, efficiency and data processing power of automated algorithms.
 
Although pros and cons exist for nearly every PPC strategy, if you aren’t using an automated bidding algorithm in today’s environment, it’s worth a second thought. It’s near certain that your competitors are employing an automated method of bidding to more efficiently and reliably structure their campaigns. If you’d like to learn more about RLC Media’s approach to bidding, click here./http://www.rlcmedia.com

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