Automated Bid Management: The Debate Continues…
Posted on July 11, 2009
Filed Under bid management | Leave a Comment
After a long hiatus, this week I thought it was about time that I came up with another blog post. Whilst scratching around for ideas, I noticed the perennial debate about automated bid management had sprung up again over on Search Engine Land.
Guest columnist Nic Abramovic posted a rant about automated bidding tools. The article is fairly uninformed and in places insulting, but I suppose he’s entitled to his opinion. Clearly he’s had a bad experience at some point with automated bidding tools.
I don’t know if Nic was taking aim at any tool in particular, but I feel the need to counter a few of his points, at least from an Efficient Frontier perspective. He does bang on about rules-based systems, which are widely acknowledged to be inefficient. However, he doesn’t attack them because of their inefficiency, but rather on perceived short-comings that could affect any system:
“Most rules-based bidding can only accept a limited amount of data (no matter what search marketing agencies may sell you on) – for example: 7 day, 30 day and lifetime “snapshots” of how your keywords are progressing.”
Historical data is essential, and the more the better. Recency techniques allow EF to use it all, while reacting to changes in the keyword market and conversion rates.
“[Agency leaders require] a PhD from a school such as Stanford and anyone who actually knows what they are doing is working at Google and not at a search marketing agency (sorry, a PhD from a state school does not necessarily qualify as “World Class”).”
Fortunately EF’s founder Anil Kamath does have a PhD from Stanford (on top of his MSc). As one of the comments points out, there are many excellent universities, both private and state funded, such as Michigan. That’s good news for EF’s Sid Shah, who got his PhD from there.
“Another area to watch would be when you have different cost-per-acquisitions for different products, campaigns or keywords. If you are selling various products, you might have specific margins and be able to spend up to X amount, depending on the product purchased. Rules-based systems wouldn’t be able to handle this because they are based on CPA targets.”
CPA targets are just one way of running a search campaign. Chasing ROI, margin or net profit means you have to understand that all conversions aren’t equal. Multi-metric optimisation is a basic and we’ve done that at EF since day one.
Fortunately, I wasn’t the only one who found the article odd. Frank Watson at Search Engine Watch also wrote a rebuttal that led to a debate about editorial control with SEL’s founder Danny Sullivan.
Ironically, of course, bid management is not appropriate for everyone. It’s a pity that Nic didn’t provide a more balanced view. It would have made his opinions more credible.
Thankfully, we can always rely on RKG’s George Michie to provide a balanced and sensible discussion. George is one of the best writers when it comes to PPC and I read his blog avidly. The most recent post is the first in a series and I look forward to reading the rest when they are published.
My last point on this topic, for now, is that there is an unwritten assumption in Nic’s article that people can do bid management better than machines. People have their flaws, no matter how experienced and skillful they are. Let people use all their marketing nous and imagination to build great campaigns that sell compelling products and services. But let the algorithms decide the right bids. As ever, PPC management is not black and white, it’s about the combination of human and computer intelligence to find the optimal solution.
Back in June
Posted on May 7, 2009
Filed Under general | 1 Comment
I’ve not managed a post since March, and this one will be the only one in May. I’m afraid other things have kept very busy, including exciting changes at Efficient Frontier.
But the main thing that’s kept me busy is something else. I’ll let this man hint at what that is:
IAB Engage for Search
Posted on March 18, 2009
Filed Under trade shows | Leave a Comment
I spoke yesterday at the IAB Engage for Search event at the CBI conference centre in Centre Point. It was a very enjoyable morning and there’s a great write up on the IAB site. There’s also some good photos on Flickr.
On a personal note I can say the lunch afterwards was excellent. At these kind of conferences lunch is usually dull, but the apple crumble with custard was lovely!
SEO Ad in the Metro
Posted on March 18, 2009
Filed Under general | 1 Comment
Spotted by an EFer in this morning’s London Metro.
I wonder what the ROI on the ad is?
Weekend Reading: Links from w/c 9th March
Posted on March 15, 2009
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Here’s some weekend reading from links that I’ve collected in the last week:
- Three Peer-Reviewed Takes On Armstrong and AOL – John Battelle’s Searchblog – No one doubted AOL needed new leadership, here's some anonymous opinion on whether Tim Armstrong is the right man, and whether AOL can be saved at all.
- New projections show lower internet ad spend | Blog | Econsultancy – In case you've accidentally been happy recently, this should get you back to a more normal state of misery.
- adCenter Analytics Beta To Close – adCenter Analytics Blog – Shutting down services is all the rage amongst the search engines. Now it's Microsoft's turn – farewell to their analytics product.
- YouTube music video row heats up – BBC News – Will Feargal Sharkey be so hard to beat? He takes on Youtube over PRS payments.
- Google gives up on Google Checkout | Blog | Econsultancy – Another Google product fades into obscurity. Although it's not being axed, Checkout's fee are being increased and brought into line with Paypal. Not the best strategy for taking market share.
Does Google Ever Give A Quality Score of 8 For UK Campaigns?
Posted on March 13, 2009
Filed Under adwords | Leave a Comment
I’ve been using an internal EF tool that gives quick, top-level data on quality score for an account (e.g. 100 keywords with 10, 150 keywords with 9 etc). Something that struck me after looking at a few accounts: no keywords ever had a quality score of 8.
Weird, I thought, must be something wrong with the tool. So I downloaded some of the accounts into Adwords Editor for a closer look. Still no 8s. After a going over a good number of accounts, here’s what I found:
- Campaigns targeted to the UK and bought in GBP never have live keywords with a quality score of 8.
- The only 8s I found were paused – either at the keyword, adgroup or campaign level.
- One account that is targeted to the UK but bought in USD has 8s a plenty.
- Campaigns targeted anywhere else (continental Europe, US, you name it) have 8s.
I’ve asked a couple of friends who run campaigns to check too, and they see the same. So what’s going on here? Just a bug I suppose. But are we at any advantage or disadvantage? Are there 7s that should be 8s, or 9s that should be 8s? Let me know your thoughts!
Weekend Reading: Links from w/c 2nd March
Posted on March 7, 2009
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Here’s some weekend reading from links that I’ve collected in the last week:
- Google needs to grow up and pay a dividend – Telegraph – Apparently Google has $16bn of cash in the bank. Time to give some of that to its shareholders?
- Aaron Greenspan: Why I Sued Google (and Won) – Adsense publishers – don't let Google push you around.
- StatCounter Global Stats – Another tool to look at search engine, browser, OS etc share.
- Technology & Marketing Law Blog: Utah Trying to Regulate Keyword Advertising….Again!? Utah HB 450 – Utah's lawmakers are at it again.
Two Great Videos from Google and Microsoft
Posted on March 5, 2009
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Here’s a couple of really good videos I’ve seen from Google and Microsoft in the last day or two.
Ten Years of Google
I saw this yesterday at a conference as part of Mark Howe’s keynote presentation.
Microsoft Advertising Intro
Perhaps the best explanation (to an advertiser or agency) I’ve seen from Microsoft of what their entire advertising proposition is. Thanks to Mel Carson.
Weekend Reading: Links from w/c 23rd February
Posted on March 1, 2009
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Here’s some weekend reading from links that I’ve collected in the last week:
- Google Is Commercializing Google News. Sh*tstorm to Follow? – John Battelle’s Searchblog – Google is now showing ads on Google News. Expect trouble from the newspaper industry.
- Google Turns Off Radio Ads – Another of Google's alternative revenue streams bites the dust along with Print Ads. A sign of the times that Google is shutting these services down.
- Q1 PPC Benchmark Data: Ouch! – Gloomy figures of search retail spending from RKG.
- Antitrust Pick Varney Saw Google as Next Microsoft – Bloomberg story about Google being a monopoly that the Obama administration has its eye on.
Who Owns an Adwords Account: the Client or the Agency?
Posted on February 22, 2009
Filed Under sem agencies | 3 Comments
Quite a fuss has been generated by an article in the latest issue of Marketing Week. In it, VCCP Search claim to be the first SEM agency to allow its clients to retain intellectual property rights over their search accounts.
This is a pretty outrageous statement. Many SEMs from other agencies (including myself) say that this is rubbish; lots of agencies do this and have done for years. Earlier today Patrick Altoft wrote on Blogstorm about it, and this post is an extension of what I said there.
At Efficient Frontier we’ve always let clients retain their search engine accounts. We’ve always seen the accounts as the client’s property to begin with, and never ours. We’ve done that since the company started in 2002.
The big issue here is allowing clients to keep the same accounts if they wish to change agencies. With click-through rate and quality score history being so essential, starting a new account can cost thousands as you try to build that history back up. This can negatively affect the search engines as well as the advertisers, so it’s odd that Google don’t have a well established policy for this already. Transferring Yahoo and Microsoft accounts of course is not possible; a new one must be set up.
There are some notable players that don’t transfer accounts, or at least kick up a hell of a fuss, both SEM specialists and larger network media agencies alike. I’m not going to name names, but looking back at the last 12 months’ of EF’s new business wins would produce some very interesting reading on who’s professional about it and who’s not.
It’s also rather curious that Marketing Week described as an ‘effort to retain clients’. Seems like this kind of change makes it easier for the clients to leave!
My advice to any advertiser is that you should:
- have access to your SE accounts (not just get reports, but have logins so you can see what’s going on)
- have the right to retain the SE account should you wish to move agency
- own the billing relationship with Google (it is a little known fact that to claim Best Practice Funding, advertisers didn’t need to bill through an agency, just putting the account in the agency’s MCC was enough. Many SEM agencies’ revenue figures were grossly inflated because of this, but more about that in another post.)
Any agency worth its salt will be confident of the work that it does for a client and will have no qualms about you looking under the hood.
So this is all a bit of a mess. The article doesn’t read like much more than a press release. There’s been no attempt to canvas opinion from other agencies. But whether this is bad PR, bad journalism or both, it’s raised an important issue in the SEM space that has previously held many advertisers back.
keep looking »