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Why bid management software can never replace human PPC management

February 18, 2009 //
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Automated bid management software is becoming more and more popular and the technology and algorithms powering it are becoming more advanced.  There are a number of providers who have built extremely powerful software solutions for automating PPC bid management and the functionality they offer is immense.  But I really do not believe they can ever fully replace human management of pay per click campaigns, here are few reasons why.

Conversion Attribution – Beyond CPA

Conversion attribution is something that I believe is at the heart of a truly integrated digital marketing programme.  The ability to allocate conversions and contribution to conversion across multiple digital channels will revolutionise the allocation of digital budgets once a truly accurate method of measurement is found.  It has been the principle of multi-channel digital campaigns for a long time, build brand awareness through display which will lead people to the search engines and conversion.  But very few, if any, tools exist which can effectively prove, more importantly, accurately report, the affect each channel has had on an individual conversion.

Automated bid management software analyses individual keywords in isolation and doesnt account for the impact a click on a non brand keyword might have on a brand keyword for example.  By managing each individual keyword at a set CPA you arent giving them the credit they may (or may not) deserve and you could be seriously limiting the volume of leads available through PPC.

Critical Mass and Sales Volume

Profitability and return on investment is great, and it is the main advantage digital channels and PPC have over our offline counterparts, but it is not everything!  Many businesses have a critical mass of leads or sales they need to keep themselves afloat, I deal with them all the time.  And whilst they buy in to the accountability and measurability of PPC if the phone stops ringing, or the leads stop coming in, this all goes out of the window as their business depends on a certain level of sales each day.  Rule based bidding is useless in this situation and you have to go after the volume.  This is especially prevalent in finite markets where a large research process isn’t undertaken.

Variable Conversion Value

Each conversion is not necessarily worth the same as another, and it is difficult to accurately provide an individual value for each PPC conversion.  In this way it would take a lot of human analysis and intervention outside of the software to manage and maintain profitability.  This often occurs when the online action is an enquiry which results in an offline sale.  One online enquiry might have a resulting sales value of £20 and another might be £2000, in this situation, how can you effectively provide a profitable CPA for these enquiries?

Offline Conversions

Offline conversions happen in every market, telephone numbers on site, visitors to a store, customer service question which result in sale.  Automated bid mangement software can never effectively account for these sales and so will managing the campaign with only half the information.

So what is the solution?

Firstly, I believe automated bid management software has a part to play in managing large and complex PPC and Adwords campaigns.  But there needs to be a large amount of human intervention and management which leads to the statement made in the title, human management can never be fully replaced by bid management software, so how is this best managed?

One option is to employ the 80/20 rule of bid management.  By allowing a software package to manage the 80% of keywords (the long tail) which generate 20% of sales you cand remove a large burden from campaigns with thousands of keywords and focus you attention on the important 20% of keywords.

Another is to use the human element to analyse the offline and supplemntary data which cannot be interpreted by the software and build complex and evolving rules for the software to follow.  I know some of the software providers are frustrated that many of their customers only us a small percentage of their tools functions and no-one really pushes the boundaries.  By using the human element to analyse the reams of offline data, plug it into the tool, or learn the most effective ways of managing things in an automated manor you can ensure that you:

1. get the most the software has to offer
2. fill in the gaps and analayse the data and factors the software is not aware of

In truth, I dont know the most effective solution.  I am sure software is going to play an increasingly important role in PPC and digital marketing but it can never replace the human touch.  So if you are planning to use one of the available tools, or your agency are going to do so, make sure you dont rely solely on technology, it will never know the full story.

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Categories PPC

How to Deliver Knockout PPC – The Movie!

February 10, 2009 //

Want to know how to deliver knockout results from your PPC campaign?  Well as luck would have it I gave a presentation in January on this very topic, and the nice people at fresh business thinking have posted a video of the “highlights” on their website.  In my defence, they chose some of the worst parts of the presentation for the “higlights” reel, but let me kno what you think anyway – delivering knockout PPC

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Categories PPC

Conflicting Messages About Search Marketing in the Recession

January 28, 2009 //
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Many people, including myself, have been speculating about the impact of the recession on search engine marketing and digital marketing in general.  Most people predict that the measurability and flexibility of digital channels, pay per click and search engine optimisation stand it in good stead as times toughen and marketers value measurability and profitability over brand exposure.  But the truth is, no-one really knows, and this is highlighted by conflicting reports which have been published in recent weeks.

A report produced by Efficient Frontier into US search spend towards the end of 2008 showed a slow down in year on year search spend, which, whilst it wasn’t directly put down to economic conditions, it could be construed in such a way.

In contrast to this the latest marketing sherpa stats show that search engine optimisation and PPC are where digital marketers saw the greatest return on investment in Q4 of 2008, thus indicating they would be the major sources of investment in 2009 also.

Nobody knows the impact of a recession on search engine marketing.  After all, it didn’t exist the last time we experienced one!  My personal opinion is that if there are any channels which are set to benefit it will be the measurable and flexible PPC and the “free” and highly profitable SEO.

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Categories Search Engine Marketing

Search Engines Feeling the Pinch

January 16, 2009 //
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Although much has been said about digital marketing and more so, search engine marketing, being recession proof and the one area of the marketing plan which is set to actually benefit from recession, recent news stories indicate that this may not be the case.  It appears that Google, Yahoo! and Microsoft, the three major players in the world of PPC, are battening down the hatches for a tough 2009 in search.

Yahoo!

Yahoo! announced this week that it is shutting down its content network, a move which was met with nothing more than a shrug by the search engine marketing community, but one which could signal that Yahoo! is looking to cut back on its less profitable areas.

Yahoo shuts down content match in the UK

Microsoft

Rumours are rife that Microsoft are set to announce job cuts in the next week, with some expected on the search side of the business.  This is unsurprising considering the disappointing growth of Live search and the perceived lack of focus in this area, perhaps they are set to rely on the Yahoo! workforce and are giving away something about the merger rumours!?!

Microsoft Job Cuts May Come Next Week

Google

Surprisingly it is Google that appear to be making the most cuts, with the announcement it is cutting 100 recruitment positions (1% of the company) and shutting down 3 engineering offices.  The staff on the engineering side will be given the option to relocate but you would think a large proportion of them will also end up redundant.

Google have also announced the removal of a number of their product offerings and the discontinuation of development of a number of others as they look to focus on the products that earn them direct revenues in these difficult times.  The affected Google products are:

•    Google Video
•    Google Catalogue Search
•    Google Notebook
•    Dodgeball
•    Jaiku
•    Google Mashup Editor

Google to lay off 100 recruitment staff

Google closes a number of products

So what does this say about the confidence of the three biggest suppliers of paid search advertising?  It could be seen as good business sense on their part, sorting the wheat from the chaff so to speak and focussing on profitability in tough economic times.  Moves like this however can only result in Google extending their lead in the race for search engine supremacy.  The optimist in me would like to see Yahoo! or Microsoft being aggressive in a  push steal market share in the downturn, but maybe they are both resigned to the fact the only way forward is to join forces.

2009 is set to be a tough year for us all; some will fall, while others will prosper at their expense.  At the moment it appears even the search engines are jockeying to be in the best position as it appears things are going to get worse before they get any better.

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Categories Search Engine Marketing

2008 in Digital – a Recap of the Year

December 30, 2008 //
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As 2008 comes to a close I thought I’d do a quick recap of the topics we have been talking (and blogging) about this year in the world of digital media and search engine marketing.

Mergers and Buyouts

A lot of headlines have been written this year about various potential mergers and buyouts, mostly in the world of the search engines.  Whether it is Microsoft buying Yahoo, Yahoo partnering with Google, or Yahoo merging with AOL barely a month has gone by without a new story about the battle for search engine supremacy.  And where has it got us?  Back where we started with Microsoft and Yahoo still trying to find the best way to dethrone Google.
Away from search (slightly) there was the Google Double Click deal which caused a stir, something which is still yet to show real significance.

Google Pushing Non Search Products

At the Above and Beyond event in September Google discussed everything, apart from web search.  A clear sign of intent that they are looking to diversify in 2009 and place the Google strangle hold on other markets such as mobile marketing and display advertising.  On top of this they launched Google Ad Planner which allows digital marketers to plan digital campaigns outside of search and Google Ad Creator which allows people without flash experience to build display adverts.

Quality Score

Two lots of wholesale changes to quality score in 2008.  The first in September where minimum bids were removed and dynamic quality score was introduced.  On top of this Quality Score began to be displayed on a 1-10 scale and Google began showing the estimated first page bid for all of your keywords.

This was then followed at the end of October when they began normalising click through rate based on an ads position when factoring it into quality score calculations.  Further changes were launched at the same time which affected when and why an ad appeared in the valuable “yellow box” positions at the top of the results.

Google’s Gambling U-turn

One of the biggest stories of the year outside of the merger talk was Google’s U-turn on their policy of not allowing gambling advertisers.  Amazingly, in the face of a difficult Q3, Google’s halo slipped and they decided to begin allowing legitimate gambling advertisers onto the Adwords programme.  Opening up millions of pounds of additional turnover in one swift move.

Google Trademark Bidding

As always, changes on Google, are big changes.  And with the removal of trademark protection they ruffled a few feathers and made themselves a few quid in the process.  Their argument was that quality score and min bid would take care of it, but then they removed min bid and left a lot of trademark owners with a headache and high CPCs on brand terms.  Now Google find themselves with a high profile court case on their hands!

Social Media

Once again on of the hot topics of the year in many different guises.  Whether it was Facebook getting a Facelift, Google launching and subsequently pulling lively.com, or Barack Obama using social media tools to become US President the word social, closely followed by media, network or utility have been uttered many a time in 2008.

Browser Wars 3.0

The launch of Google Chrome announces browser wars 3.0 and looks set to see this space slightly more interesting than usual in 2009.  Although it does have a lot of people questioning what information you would be giving away to Google by browsing using Google Chrome.

Best Practice Funding

As Google’s dominance grows, their charity slows!  Google announces that as of Jan 1st 2009 they will no longer be offering best practice funding to search marketing agencies that resell Google Adwords.  No big deal for direct advertisers but for agencies slow to adapt it could mean a few casualties in 2009 as the more innovative and transparent PPC agencies learn to live without handouts.

There’s my recap of the year, anything I’ve missed?

It’s been another fast paced and exciting year in the digital world we operate in and no doubt 2009 will follow suit and through up surprises and changes which give me something interesting to write about!

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Categories Digital Marketing
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