PPCAre Bid Management Tools Dead?

Are Bid Management Tools Dead?

Are bid management tools still useful, or have they outlived their purpose?

Given the changes in the search marketing landscape, especially the move toward quality-based bidding, the question on the minds of many SEMs is “Are bid management tools dead?” During the recent Search Marketing Expo two teams of search marketers took sides in a formal debate on the topic.

The session intrigued me, because I quite recently interviewed Efficient Frontier’s Anil Kamath, and also wrote up a case study of Travel Zoo’s experiences with bid management.

Arguing that bid management is dead were Misty Locke, president of Range Online Media, and Peter Hershberg, managing partner of Reprise Media. On the “not dead” team were Robert Ashby, formerly the director of search for Expedia, and Chris Zaharias, senior VP of Efficient Frontier.

Misty Locke started by presenting the case for bid management being dead, and then Robert Ashby performed a cross examination of Misty. Next, Chris Zaharias got up and presented the case for bid management being alive and well, then Peter Hershberg cross examined Chris. Next was a rebuttal by the “Dead Team” of Misty and Peter. This was then followed by a rebuttal period for the “Not Dead Team” of Robert and Chris.

Major themes of the Dead Team were:

  1. The inability to bid for placement in a direct manner makes automated bid management much harder to do
  2. The biggest issues in your campaign now are your ads, and your landing pages. Bid management tools don’t help you with these, and they can in fact lull you into a false sense of security.
  3. Brand building keywords don’t necessarily convert that well into business. But many businesses will want to buy the keywords most closely associated with their business, regardless of direct ROI. If these keywords are “bid managed” they may well be turned off.
  4. First visit search queries (e.g. sports car) don’t result in immediate sales. If someone searches on “sports car” it’s likely that they are in research mode. They may visit your site many times before making a purchase. Bid managing these keywords is also very difficult to do, and could well result in turning these keywords off. Yet they may be a key part of the overall site profitability.

Major themes of the Not Dead Team were:

  1. There is too much complexity in managing large campaigns, and bid management can help you scale.
  2. They agree that ad copy and landing pages are incredibly important, and point out that a bid management tool does not prevent you from focusing on that.
  3. Deal with brand building keywords and “first visit search” keywords by keeping them out of the bid management tool

As the discussion matured, it did in fact come to a consensus. The panelists ultimately agreed that bid management is a useful tool, but that in today’s advertising environment you need to do much more in addition to what the bid management tool can do.

A solid strategy for your PPC campaigns will have the following elements:

  1. Use a bid management tool to manage the long tail of your campaign.
  2. Stay focused on your ad copy and your landing pages, because they can dramatically influence the cost and conversion rates of your campaigns.
  3. Take significant brand building terms and manage them separately
  4. Take significant “first visit search” keywords and manage them separately as well.

Ultimately, I view bid management as a critical tool in your PPC campaign toolkit. For many businesses, there is a large amount of money to be made in the long tail, and it’s an environment that tends to be less competitive than the major keywords. To take advantage of this opportunity can often require you to implement thousands, tens of thousands, or hundreds of thousands of keywords.

There is no practical way that this quantity of terms can be managed effectively by any non-automated means. Ultimately, you need to have help.

Eric Enge is the president of Stone Temple Consulting, an SEO consultancy outside of Boston. Eric is also co-founder of Moving Traffic Inc., the publisher of City Town Info and Custom Search Guide.

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