3rd Party Bid Management – 3 Benefits & 3 Challenges

Why should you use a 3rd party bid management platform?  At Point It, we work with several 3rd party tools such as Adobe Media Optimizer, Marin Software and Kenshoo. I’ve learned that bid management tools can not only help with the ease of managing a paid search account, but can help me answer some key questions about a client’s search marketing program.

3 Questions that Help Clients Benefit from Bid Management Platforms

1. Should I spend more in Shopping or Search?

Platforms help with bidding by making trade-offs across tens of thousands of keywords across multiple engines – Google/Bing/Gemini. They can also trade-off between paid search and other channels such as dynamic remarketing and shopping.  Rather than manually (and somewhat arbitrarily) allocating budget across engines and campaigns, the algorithm can determine where the marginal revenue is the greatest and drive spend there.  I’ve found this particularly valuable as shopping became more prevalent on the SERPs in Q4 and I’ve seen some success in Gemini.  Now that Amazon is testing shopping ads, I’m sure I’ll leverage this feature even more.

2. Is my Bing AOV really much higher/lower than my Google AOV?

Using different engine pixels can cause confusion when reporting data all-up.  Engines can recognize revenue at last click or date of conversion.  They can pull different revenue values (with/without shipping, taxes, discounts) and have different time zones.  I rely on a bid management platform to normalize attribution, key metrics and time zones across engines, so I can feel confident that the data is consistent.

3. If I had 25% more budget for paid search, how should I allocate it and how much revenue will it drive?

Most platforms can help set client expectations by forecasting performance based on different spend levels.  I use these forecasts to identify the point of diminishing returns for a client’s search marketing investment, and to help them allocate their advertising budget – either across time or across other marketing efforts.

 

3 Challenges in Using Bid Management Platforms

Bid management solutions are not a one size fits all solution.  I’ve discovered that there are some conditions that pose a challenge to algorithms, such as:

1. Hitting budget caps in engines

If a client has a granular build and small budgets, it can take algorithms longer to determine what the actual marginal revenue potential is for each keyword. There are ways around this – I’ve used shared budgets in the engines or consolidated the account into fewer optimization “buckets” in the platform as two examples.

2. Cross-matching queries

Algorithms can be less accurate in setting bids if keywords are matching across multiple ad groups and campaigns within a paid search account. I use negative keyword fencing to alleviate this, although too much negative fencing can be counter-productive.  This is an art, not a science and every account has a different level of fencing that makes sense.

3. Lots of promos

If a client’s search revenue and spend are strongly influenced by external marketing factors such as email blasts, catalog drops, or promos, the algorithm can take a while to correct itself post-event. To tackle this issue, I exclude days or change settings such as lookback windows in the platforms. I can also take advantage of these marketing efforts by adding temporary bid or budget boosts.

 

3rd party bid management platforms can definitely add value to a client’s search marketing efforts as well as their overall digital marketing strategy.  Each business is unique, and figuring out how to leverage the software given those unique characteristics can determine the ultimate success of the program.

 

More Resources

Want help pulling insights from your paid search data? Sign up to qualify for a free 15-minute Results Lab Audit with our search marketing team.  Or check our Micro-Lessons on topics from the use of dynamic ads in your paid search campaigns to the up-and-comings of Programmatic Display.

Lindsay Walker About the author

Lindsay Walker is a Senior Search Strategist for Point It, and has been managing search accounts for ten years. She has a B.S in Math/Econ from UCLA and an MBA in Marketing from USF. Lindsay lives in the Bay Area with her two teenage sons and her basset hound Bubba. When not in front of a computer, she enjoys stand-up-paddle boarding, tennis and yoga.

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