I am asked often, as pay-per-click “professional”, why do I not use bid management software. Arguing against PPC automation is often futile in the search marketing community. We are often bombarded with software vendors that seem to dominate the conversation. Our voice, from an in-house perspective, is often shunned.
First, let me clear up one misconception on why I do not use bid management software: Job Security.
The concern of losing my job has nothing to do with not using pay-per-click automation software. I have plenty of day-to-day tasks that keep me busy, along with pay-per-click. From search engine optimization to social media, and various projects in between, there is not a lack of work in the online marketing world. Plus, anyone that has used a pay-per-click bid management software, knows that it’s not a “set it and forget it” program. It requires maintenance and reporting as well. Bid automation does not replace people. Hopefully, we all agree on that.
I have listed below my major reasons for saying no to pay-per-click automation. It is important to note, I am assuming a company has a quality pay-per-click manager on staff. If not, that is where the investment should be, not in software.
Last Click Theory
By the nature of analytics, it is often only the last click that gets credit for the sale. However, the research process starts many keywords and many weeks before. Setting up automated rules based on conversion does not take into account the early keywords.
Also, pay-per-click automation tools do not take into account non-PPC efforts. It’s often display ads, offline campaigns, or press releases that strike the interest of a consumer. Keywords are needed to support those efforts. Those initial keywords may not see the conversion, but they most definitely played a major role in the revenue.
Timing delays and seasonal demand
Often bid rules are based on timing. For example, if keywords perform poorly over a 30 day period, then spend on those keywords are adjusted accordingly. In a vacuum, that makes sense. But if you are a seasonal company, those 30 days are a lifetime. Things change in 30 days.
That 30-days is just one example, but it is not uncommon for timing delays in performance not to match up with seasonal issues. Human interaction is still needed to prevent these rules from executing. In fact, are the rules even needed at all?
In general, pay-per-click automation is reactive. It reacts to data and makes adjustments. Marketers need to be proactive, especially seasonal marketers.
Quality Score
Automated bid management software takes quality score into account at a minimal degree. Their solution to getting better rankings is to bid higher. Search engines are no longer this simple. Pay-per-click marketing includes quality keywords, relevant ads, great copy, and landing page relevancy. These influences are not measured in many bid management tools. Quality score plays a stronger role now than ever.
People are cheaper and smarter
The cost of a pay-per-click automation program is normally a large flat fee or a percentage of spend. Either way it is often a substantial part of a companies marketing investment.
If managing pay-per-click turns out to be extensive work for a PPC Manager, then it makes more sense to invest that money into an analyst to help with that work. A PPC Analyst can be trained on landing page creation, keyword research, seasonal issues, and various non-PPC efforts that will affect campaigns. In other words, that analyst can be trained to be proactive.
So, although it is easy to be persuaded by an industry full of software vendors selling automation, stand strong. Pay-per-click is too sensitive to be handled by automation.
Tags: Bid Management, in-house, Pay Per Click, PPC
February 6th, 2010 at 8:33 pm
Hello John,
Until I actually got my hands dirty in bid management software, I felt the exact same way. I thought that any software solution, no matter how fantastic, would fail and hurt my accounts. Once I actually used the software, understood the internal mechanisms, etc., I changed my tune. Probably the single biggest factor for me? The fact that bid management software doesn’t remove the need for human intervention. You still have to vigilant with reporting, understanding why the software makes the bid changes it does, etc.
Have you actively managed accounts with any of the current top-of-the-line bid management solutions (i.e. Kenshoo, Click Equations, Aquisio, among others)? I’d be curious if you have and what results you were able to achieve!
February 7th, 2010 at 11:26 pm
John,
Thanks for reading.
I have actively used PPC automation software. The one I have used the most and more familiar with is Omniture Search Center. I found I spent more time making adjustments and rules. That time was eventually better spent managing the account myself.
I also discovered that when the demand became too big for me and required too much time, I hired help. Getting a PPC Analyst to help proved to be more cost effective. Plus, I was able to mold and train the analyst to understand our goals and needs.
But all that being said, you never know where things will go. I am willing to change me tune and keep trying until I find one that really fits my needs.
Thanks again for visiting.
-John Ellis
February 16th, 2010 at 7:53 pm
This is an interesting article. My feeling is, do SEO work first, then do paid search. SEO will pay off more if done right. I disagree a bit on the cost issue. Websites like http://www.betterbid.com offer a much more affordable solution for small size businesses that should make financial sense.
February 20th, 2010 at 12:12 am
The most secure way that will give you the most peace of mind is to create your own management software with PHP/MySQL, or JAVA if you know how.
March 5th, 2010 at 1:02 pm
I agree, most bid management programs are way too complex and costly. And they do not need to rely on conversion based rules to be effective - I love your paragraph that slams the “Last Click Theory”. I use a simple bid program that maintains a target position. Let’s face it… after optimizing your account & landing pages, the bid amount is the only variable that you have control over that can affect the position of your ad. Bidding to position is very effective. I have found that the top 3 spots all have very good CTR’s, so I target the #2 spot. This maximizes the CTR by keeping me in the sweet spot. It minimizes the expense because I’m not wasting money being #1. I simply don’t have the time or patience to update my bids every week for hundreds of keywords. Now the program does it for me daily. I still monitor and tweek things, but this program saves me tons of time, and it’s much more accurate than me doing it manually. You don’t need to be a genius to use the adwords api, and it was kind of fun developing my own program.