Bidding is a cornerstone of Paid Search management and the dynamics of the ever-evolving auction marketplace auction marketplace, combined with the multitude of bidding strategies, make the search marketing professional a key element of a well spent media budget. Bid optimization is also an intricate and dynamic assignment with many considerations which increase with the size and complexity of your accounts.
I’m assuming you have conversion tracking set up through the Adwords interface and ideally some sort of Revenue data as well. The first should be considered mandatory, the second a nice-to-have. If you don’t have an Adwords goal set up, “you’re doing it wrong” and should likely start there first.
The Three Bidding Options
If we ignore neglecting your accounts entirely (not recommend), there are three basic options when bidding your keywords:
Keyword by keyword bidding in the interface:
The simplest form of bid management. The most time consuming, and often the least effective in that in very large accounts you may rarely get to the longer-tail keywords, or in very dynamic accounts, Display Network or other specialized campaigns may be neglected.
Bulk bidding in the Adwords Editor with filters:
Can be very effective for bulk bidding actions, although I prefer the interface. Note that this can actually be a good intermediary step to help determine your automated rules. More on both of those later.
Export to Excel:
- Export, perform calculations, upload in bulk to the Editor. Also more scalable, although likely more complicated than necessary since the same result can be accomplished in the Editor, although it makes segmentation of keywords more visual and pragmatic. It may also be necessary if you are tying in revenue data from a source other than Adwords.
While I don’t have an inherent bias against third-party bid automation, in my personal experience I have yet to find a solution that I felt completely comfortable with. But frankly, I don’t employ them often enough to make a strong case either way and this isn’t the primary purpose of this post.
Google’s Non-Goal Focused Automated Bidding:
Google manages the bids and attempts to acquire the most clicks for our budget. That should sound scary to anyone who grew up in the post-traditional advertising world.
Google’s Conversion Optimizer:
Used correctly, I have found Google’s conversion optimizer to be a fantastic method for managing portions of your accounts. My preference is using Conversion Optimizer after considerable pruning and granular ad group segmentation, on very high conversion volume ad groups whose search volume does not substantially fluctuate. It is also useful when there are a number of factors at play in the campaign such as multiple devices, locations, languages, etc.
Manual Bidding with Automated Rules
The subject of this post and the type of bidding that I am moving more and more towards each passing month. Let’s discuss why.
Why Manual Bidding?
There is nothing inherently wrong with automated bidding; the problem is that bidding does not exist in a vacuum. In a perfectly tailored and segmented account, you could determine a keyword’s performance, calculate its revenue per click and bid based on the desired margin.
However, there are so many reasons why a keyword is performing a certain way that until you have done ample creative testing, segmented your campaigns by any relevant dimensions such as device, network, location, etc. and scoured search query reports for ad group segmentation and negative keyword possibilities, you could be making decisions based on blended data. As Analytics savant Avinash Kaushik says, “all data in the aggregate is useless,” and that’s exactly what you’re looking at when many different factors roll up under an ‘individual’ keyword.
Even when you’ve done all the things mentioned above, you still have the problem of attribution, especially for higher funnel keywords which may not be getting the proper credit for their influence on conversions down the funnel. Finally, automated bidding often doesn’t work very well for keywords with sparse data, which will likely be 60-80% of your account.
Thus we are left with manual bidding for much of our account, even when using Conversion Optimizer for some campaigns. This is where automated rules can become your best friend, a huge time saver and an efficiency driver to garner both increased performance and more time at the beach.
When Your Account is Ready for Automation
After bidding a particular account for a while, I start to zero in on certain factors by which I make bidding decisions and somewhat standardized responses based on the data. When you begin to realize, for example, that you use a seven day date range on higher volume keywords and bid down around 10% when the CPA is $4-6, you’re ready to automate some of your efforts.
In a nutshell, automated rules are best used in place of repeated basic actions in response to a certain threshold of data.
Set Volume Thresholds
High-, medium- and low-volume keywords require different strategies to be bid properly. To define these categories a bit more, though they are loose, flexible and personal designations, a high volume keyword is one that acquires statistically significant impression, click and conversion volume on a daily to weekly basis that is representative such that the keyword can be bid entirely based on this recent data – wild seasonal fluctuations or temporary site issues notwithstanding.
Medium-volume keywords are those that acquire enough volume and conversion data to be bid on two to four weeks of recent data, and low-volume or long-tail keywords are those that require multiple months of data to accumulate effective bidding data. I’ll leave cross-ad group data aggregation, statistical models, and accounting for year-over-year seasonal changes to other posts.
It is important that you take these loose buckets into account when setting bidding rules and I do not recommend creating automated rules without volume thresholds.
Factors for Bucketing Your Keywords
I have found the below to be the most common filters by which I set my automated rules.
- Date Ranges:
- Lower volume keywords require longer date ranges.
- CPA or ROI Goals:
- Your overarching goals for the account are likely what most of your rules will be based on.
- Conversion Volume:
- Keywords with low conversions (1-2 in the given date range) should receive lighter treatment when using CPA or ROI goals (ie. If you’re increasing keywords with a CPA of $3 or better, you might not increase as aggressively on a keyword with $3 spent on 1 conversion, versus a keyword with 3 conversions at $9 of spend).
- Bidding activity is often biased towards bidding down. Most keywords perform poorly during one time or another, and this will often lead to decreased bids. As such, some keywords will only be bid down until they lose most of their volume. Light automated bid increases on low impression keywords can help restore lost volume for keywords.
- Quality Score:
- You may want to take Quality Score into account when choosing keywords to bid up, especially on lower volume of clicks or impressions. Higher quality score keywords obviously have lower CPCs, as well as more likelihood of showing in top positions, showing up at all, and/or displaying various ad extensions.
Categories and Examples of Automated Bidding Rules
Let’s get into the actionable meat of this post and discuss some actual rules you could consider using.
High Volume Keywords
Date Range: Last 7 Days
Volume Thresholds: Typically greater than 10 clicks, often higher.
Performance Thresholds: If you’re target CPA is $10, you might bid keywords over ~$12
Action: Bid down 10-20%
Sister Rule: For keywords below the target CPA (say below $8 for this example), bid up 10%.
Notes: As noted above, I like to give some leeway above the allowable CPA. I don’t want to be too aggressive on a keyword that has a bad week and is within a small percentage of an allowable CPA with just one week of data. I also like to bid up or down just 10-15% for the standard rules; you can save more drastic changes for more drastic losses. Often I will also require a minimum of 1-2 conversions, and create another rule for those with 0-1 conversions that is tied to spend for that date range rather than CPA or ROI.
Mid/Low Volume Keywords
Run: Once per month
Date Range: Last 30 Days
Volume Thresholds: Some click threshold, at least over 10 clicks typically
Performance Thresholds: Similar to above
Action: Bid down or up based on performance, ~5-15%
Notes: I like to be less aggressive on this bucket as it will often be a large number of keywords and so have a noticeable effect on the account anyway.
Catch the Bleeders
Date Range: Yesterday
Volume Thresholds: Typically a cost threshold which depends on your average spend and CPA/ROI goals
Performance Thresholds: No conversions with high spend or enormously high CPA
Action: Bid down 20-50% or pause so you can review
Notes: I’ll use a rule like this, which rarely runs, to catch a runaway keyword which could cost hundreds or thousands of dollars if left unchecked, often as a result of launching a new keyword, or accidently entering a bid of $5 when you meant $0.50 (happens to the best of us from time to time!).
Mid Volume or Very Low Volume
Unfortunately, Adwords currently only allows you to run on a weekly or monthly basis, which leaves some gaps for mid-range keywords. And for very long-tail keywords, although you can bid on 60 or 90 days of data, only being able to run these on a monthly basis can create some overlapping bid changes on the same data as used previously. Therefore you may choose to take advantage of the ability to run rules only one time, on command, for these buckets and do so within a given month or every 2-3 months for certain buckets of keywords.
Be Careful of…
Rules Without Bid Caps
I highly recommend setting maximum and minimum bids for your rules based on the average range of CPCs for your account. If a bid of over $3 seems outlandish for your account, cap the bid there; you can always increase it manually if it is warranted.
First Page & Top of Page Bid Estimates
I recently inherited an account with an automated rule that raised every active keyword to the first page bid estimate every single day. Rules like this are why Google set up automated bidding rules, as can be inferred by how prominently they are advertised, in order to drive up the average revenue per click in their auction.
These bid estimates are very ballpark, rounded, and often very inaccurate in practicality. Imagine if multiple advertisers in your industry used rules like this and all your competitors responded to these bid increases; suddenly your bids are being increased in perpetuity over time. You know who wins here? Google.
You should try to ensure that your keywords are not touched by multiple rules or overlapping date ranges; with many rules, overlap will be somewhat inevitable given the limitations, but as long as it is minimal you should be fine.
I hope this helps you strategize ways that you might use automated bidding rules to both ease your burden as a search marketer and achieve better campaign performance for your business or your clients’ businesses. This is a new an evolving methodology for many search marketers. Feel free to offer more ideas for rules you’ve used in the comments below!
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