Can You Bid on Ads Without Bid Management?

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SAN JOSE — The Web e-conomy is heating up. There now are plenty of
people, just as there were during the Internet bubble of the ’90s, who’d like
to help you spend your company’s money buying online advertising to make your
business grow, Grow, GROW! But do you need them more than they need you?

Signs of economic exuberance practically hit me over the head here at the
Search Engine Strategies Conference (SES). The August 2-5 show brought together
buyers and sellers of advertising in venues such as Google, Yahoo! and MSN.
While big PC exhibitions such as Comdex and CeBit America are announcing their
hibernations, attendance at SES is booming. (SES is
sponsored by Jupiter Events, a subsidiary of Jupitermedia, the publisher
of this Web site.)

More than 1,000 people — a 50% increase over last year’s event —
paid hundreds of dollars each to attend SES in San Jose this month.
Some workshop ballrooms were packed with hundreds of rapt listeners.
Each attendee came seeking a No. 1 ranking for their company in both the “editorial”
search-engine listings, which are free, and the separate category of
pay-per-click (PPC) text ads, for which advertisers must bid.

How many do you think will succeed?

Gentlemen, Start Your Engines

To be sure, practically any search you do at Google and elsewhere shows that
someone does show up in high positions in both the editorial
and the PPC listings. So, heck, it might as well be you.

Three bid-management services stood out at SES as metaphorical brain surgeons
who’ve figured out how to help your company make the cut. These specialists
can’t do much about your editorial listings — that’s the domain of a
distinct field called “search-engine optimization” — but instead are
primarily intended to maximize the results from your online ad spending:

•
Atlas OnePoint
is notable for its self-serve approach to buying search-engine advertising.
“People come to our site, put in their credit card, and they can start using
our services immediately,” says the company’s president, Dave Carlson.

If your company is already running text ads in Google, Overture, or other
PPC programs, OnePoint’s computers suck your existing bids into a unified,
Web-based interface. You then confirm your bids (or establish your bids for
the first time) in a module called BidManager, track the return on your
investment in ProfitBuilder, and finally let the software start jacking
your bids up or down by itself via CampaignOptimizer.

The optimizer needs to “watch” the performance of your ads at varying bid
levels for 30 days, Carlson explains. After that, you can let the program
follow its own bidding strategy. “The first month, you need to look at it
every day,” Carlson says, “the next month, every week, and then you can
go into it less often — but you still need to look at it.”

As a self-serve program, OnePoint can be the least expensive of the three
big-management services. Bidding on 50 search terms in up to 10 search
engines can cost as little as $79.95 per month. (CampaignOptimizer is a
separate service at additional cost.) OnePoint, however, scales up to meet
the needs of clients who literally spend more than a million dollars each
month on PPC advertising, according to Carlson.

• Did-it.com
handles your search-engine advertising using the opposite of the self-serve
approach. Did-it is more like a traditional ad agency, charging its clients
a retainer of $1,000 a month plus 15% of the client’s online ad budget.

In return, Did-it’s clients are assigned a live account representative who
scrutinizes each business and proposes a tailored advertising strategy.

Did-it pioneered the principle of moving a company’s advertising bids up and
down at different times of the 24-hour day. It’s often true, Did-it found, that
Web surfers order fewer products online between, say, midnight and 6 a.m. Lower
bids may make more sense during those hours to avoid generating a lot of
ad click-throughs that may never result in a sale.

This principle is now known as “dayparting.” It’s become a feature of several
other bid-management services in addition to Did-it’s. To differentiate itself,
Did-it is now launching new tools, according to president Kevin Lee. One of
these is a “geo-concatenator,” which automatically generates popular locations
and related terms to advertise on, such as “Las Vegas hotels,” “Miami hotels,”
and so forth.

Did-it has clients who advertise as little as $5,000 per month,
although most have a much higher budget, Lee says. His company also
offers a lower cost-per-click rate, rather than a flat 15%, to ad
agencies and search-engine optimization firms that support several
online advertisers.

• Inceptor
is a more recent entrant to the bid-management field that also uses an
ad-agency model. Rather than charge a retainer plus a percentage of “ad spend,”
Inceptor uses a formula based on the extensiveness of each client’s bidding
needs, says Michael Sack, the company’s EVP and CTO. This translates into a
monthly fee as low as $2,000, although most clients budget far more, Sack says.

Inceptor’s computerized bidding methods are based on Wall Street
portfolio-management strategies. The search terms your company bids on are
organized into “portfolios” that can be configured globally, without having
to tweak each individual bid. Inceptor adjusts your bids on each term based on
your goals. These may be increasing your revenue, lowering your cost per new
customer, or maximizing the return on your advertising dollar.

Use a Hired Gun or Do It Yourself?

Choosing one of the above services is a matter of setting your company’s
priorities. A small firm that needs to advertise only a single product
might well find that a do-it-yourself approach, such as OnePoint’s, is
perfectly adequate. If your company sells several different products or
services, however, the complexity of today’s search-engine advertising
quickly rules out a purely manual approach to bid management and demands
automation.

Danny Sullivan, the editor of SearchEngineWatch.com and moderator of SES, cautions
newbies that “it’s more important that you’re using a conversion tracking
tool than a bid-management service.” Tools such as
Conversion Ruler
allow you to determine down to the penny how much visitors to your site
are spending, what percentage of them request a free estimate, or whatever
it is that you consider a “conversion.”

“Once I know how much I’m willing to pay [to acquire a new customer], I can
take the whole gamut of terms and bid 60 cents or whatever on all of them,”
Sullivan says. Bidding on PPC advertising without knowing whether you can make
a profit from the visitors you attract is flying blind.

Conclusion

PPC advertising is already an important form of marketing for hundreds of
thousands of businesses worldwide. If your company sells something on the
Web, you’re leaving money on the table if you’re not maximizing your
traffic in some way, ranging from the simplest labor-intensive methods to
the most sophisticated, automated technology.