ClickEquations Blog

I disagree, Craig. nnYour post assumes that infinite (or sufficient) human resources exist to address non-bidding aspects of SEM, and you also imply that people who put bid mgmt high on the list of SEM priorities necessarily spend lots of time on it. Both of those assumptions are wrong. nnWhat’s in shortest supply in the SEM space is people (both client & agency side) who know what they’re doing. Add up all the Click Equations, Efficient Frontiers, Search Agency’s and Trada’s of the world, and you have enough capacity to, IMO, address maybe 20-40% of the SEM market. For the other 60-80%, tools to automate data-driven bidding is essential, and moreover I could just as easily argue that lack of automation in bid management prevents scarce human resources from being applied to the areas you put emphasis on. nnI’ve been out of the SEM space for over a year now, so maybe things have changed, but I doubt that. The largest paid search advertisers – the ones who’ve been able to profitably scale their spend year over year – are *very* focused on bid management, always have been and IMO always will be, for the reasons of resource scarcity I mentioned earlier.

Thanks for your thoughts Chris. Obviously my headline is a massive exageration, which is the new standard for headlines (as I’m sure you’re aware).nnI do believe – based on observances I get to make every day – that the perception that bidding is paid search management is prevalent. And I think it’s wrong. It’s a key element but when done at the expense of other activities it’s an unproductive one. nnYour point, that large accounts or advertisers need more ‘management’ than they can muster so they use automatic bidding because it is automatic, may be true. But many of the accounts and managers we encounter do have the choice of how they spend their time – and I’m being dramatic to suggest they think carefully about how they spend that time. And I’d hope that if the decision makers at the large advertisers who are happy simply bidding away on non-optimized accounts really understood the issues that they’d find a way to assign or apply some different resources to the job. In other words I’m not sure the folks to take the ‘bid only’ job are really acting in their clients best interests. If you’ve got a hammer, the world looks like a nail…nnBroadly speaking it’s a broad and complicated issue. I doubt we disagree much about the fact that most campaigns could stand a lot of improvement that isn’t better bids, that ideally you’d tune the account in various ways to get good solid data before the bid algo was set to do it’s magic, or that great bid technology is a huge advantage if properly applied. Is that right?nnIn reality it’s not an either or – accounts need good ‘management’ and good ‘bidding’. I’m sure bid-only automation is better than an account on auto-pilot, but clearly not what anyone should recommend. (Not that you are, just to make the point).nnThanks again! n

Thanks Chad for sharing your experience. You’re clearly a role model that many others would do well to emulate.

“Just like SEO, there’s no blue print for PPC”nnYou are probably correct about this, but I think one of the distinguishing features of PPC Managers vs SEO’s is how much we like to turn things into repeatable processes.nnEven though I agree with you, I am not going to stop looking for the one correct process for doing things

Kudos for stirring the pot, Craig, but I disagree with you here. nnLetu2019s take the case of a hypothetical poorly conceived ad. By ad I mean the whole nine yards: keyword, match type, copy, landing page, negatives, syndication, geo-targeting, everything.nnFor whatever reason for this ad some pieces of this puzzle are not well done, and that results in the traffic drawn in being of lower quality (and lesser value) than it aught to be.nnShould the bid management system react to the actual value of the traffic and bid only what the traffic is actually worth, or should the bid management system calculate a bid based on what the traffic should be worth if the ad was perfectly constructed? Not only is the latter impossible — how would an algorithm gauge that? — even if it could be done it would be unwise to do so in that youu2019d end up paying more than the traffic is currently worth with no guarantees that the problems with the ad will be addressed soon.nnFlushing money down the toilet as we learn is inevitable to a degree, but I’d prefer to have the bid management system spend appropriate amounts given the current quality of the ads and constantly work to improve the ads.nnNo question, smart bidding isnu2019t the only thing, but it is the surest control we have for making paid search cost-effective.

I agree. nnThe point is that the potential for conversion optimization in keyword bidding is being given more weight than its worth in the industry. nnWith the amount of variables involved, you can easily get lost in the data and spend too much time trying to figure out the best bid is; whereas optimizing in other areas, such as ad copy testing, give you definite results that you can be confident about. nnThat’s what this is mainly about right? Prioritizing based on the volume/conversion potential of testable events that you can be confident about. nnIf you could perform scientific A/B tests on different bids, you could find out what kinds of conversion/volume differences you have based on differences in max bid. However, the closest thing that does this is Google’s Campaign Experiments, because only the engine can control distribution such that an unbiased test is run – by splitting bids randomly with each impression. Outside of this, there is no way to effectively test two different bids.nnSo two things:n1. Bidding is hard to test scientifically.n2. Therefore, the efficiencies gained from bid optimization is unknown.nnCompare bid testing to the following: n-Ad copy testingn-LP testingn-search-query KW expansion (negative or non negative)nn The difference is that there is a methodology to these tests, the results are clear, and what you learn from these results can be used in the future. With bidding, you are trying to analyze a dynamic auction environment with many variables, known and unknown. Whats the result of focusing on bidding analysis? Volatility. Ambiguity. Confirmation bias. And likely a lot of wasted time.