There are few more arcane topics in the field of Pay Per Click advertising than PPC bid management. A simple literature scan reveals so many articles on the topic, so many ‘secrets of PPC bid management revealed’ free ebooks, that you’d be forgiven for thinking that it was on par with meeting the love of your life or winning the lottery.

Well in business terms, it is. Not only are there a range of competing strategies for PPC bid management that all claim to be the ideal solution, but the very process of analysing bids is itself often viewed as a complex and daunting field of activity.

PPC bid management 101

First of all, let’s understand Pay Per Click or PPC. It’s not a single organism. For example cost per click (CPC) versus cost per thousand (CPM) always needs to be a consideration when you’re planning your strategy.

• Cost per click or pay per click is obvious - you set the maximum you’re willing to pay for a searcher to click on your advertisement.
• CPM (the m stands for ‘mille’ or thousand in roman numerals) is the price an advertiser is going to pay for 1,000 advert impressions on one page. This technique is most often used for social media advertising eg Facebook ads.
• Then there’s CPA or cost per acquisition which is where the business owner pays a set fee only when a visitor makes a purchase that is directly linked to them having clicked on a specific advertisement; this is a relatively rare version of the advertising bid process - prematurely part of AdWords Conversion Optimizer - and is rarely the core activity in a campaign.
• Finally there’s ECPC - enhanced cost per click - where Adwords itself uses an algorithm to raise your bids by up to a third if the metrics suggest the click is more likely to lead to a conversion.

So which do you choose? Well the answer is different for each business and depends on your goal.

• Increasing recognition - if this is your goal and you have a brand driven product, you’ll probably want to aim for creating lots of impressions via CPM.
• Boosting site traffic - if you’re a high volume, low spend business, you really need to create a lot of clicks. A LOT OF CLICKS! The best way to do this is to utilise CPC.
• Personal service - if your online advertising is all about the call to action to contact your organisation e.g. because your service is bespoke or personal, you’re more about leads than anything else and quality leads are more likely to come through ECPC.

Your goal, therefore determines your strategy and you might have different goals in a single campaign. You can also have different ways to measure performance - revenue is one measure, profit is another.

Establishing data patterns for PPC bid management

Knowing your goals is half the process of creating a powerful bid management strategy. The other half is establishing review periods in which to calculate your bids. This can vary depending on your campaign and even on your product range.

As an example, highly seasonal products may need a short review period such as eight hours - you don’t want to wait a week to find out how your Thanksgiving Turkey hats are selling! It’s important to be aware that setting up bids for a seasonal campaign can be aggressive and may not carry over into any other area of your campaign.

Alternatively, using a longer review period is sensible if you have a continual product offering such as a service. But remember that too long a review period can lead to overly cautious bidding. One risk of having too long a review period is that search engines and platforms both change their algorithms regularly and if that happens inside your review window you may find that you’re not bidding effectively because user activity has been changed by algorithm changes. Using a blend of review periods of differing lengths, is often best for anything other than a very straightforward small business offering a limited range of products or services.

All this adds up to a simple message. There’s an unlimited range of ways to use PPC bid management to develop your business, but you need to be clear about your goals, informed about your performance and able to alter your bid management strategy rapidly as circumstances change.

Bid management strategy - advanced techniques

There’s a clear reason that PPC is the preferred strategy for most businesses - it’s easy to understand and the metrics are straightforward. Tracking conversions gives you your return on investment ROI and this can be used as the primary Key Performance Indicator (KPI) for your campaign. Beginning with CPC, and establishing a pattern of behavior is essential before moving to any other bidding system. Once you’ve got solid conversion information over a long enough period of time, you can look at whether CPA or ECPC would be a good choice. In either case it’s essential to:

• Gather data over a long enough period to ensure you’ve ironed out any seasonalities that might be affecting your conversion rate.
• Achieve at least 15 conversions in an average 30 day period - this is the qualifying level to be eligible for CPA or ECPC.

Next you have to decide what tools and systems you’re going to use.

Bid Management Software

There’s no doubt that PPC runs on bid management software, in fact it’s almost impossible to run an online e-commerce business without it. If you have many products and many keywords it can simplify the process of maximizing return on advertising spend (ROAS). Things to look out for include.

• Low downtime - minimal maintenance windows and straightforward upgrades are essential if your software is to be stable enough to perform well for you.
• Easy interface - while the whole point of having bid management software is that it can get on with doing the donkey work of managing a PPC campaign, it’s important that the system is intuitive enough for users to be able to make changes when necessary.
• Simple reporting - your bid management system should simplify your reporting structure and give substantial information about the progress of your campaign. It doesn’t matter whether you use an agency or operate your software in-house, it’s vital that you can see quickly, easily and clearly exactly how your campaign is progressing.

Automated bidding rules

AdWords allows you to create automated rules that manage your bids. There are endless ways to establish these rules but there are three key points to note:

• A rule needs constant reassessment - what works this month may be counterproductive in a different season or when your product mix changes.
• Bid management software may supersede automated rules because it is more flexible, more powerful or operates on a non-Google algorithm that gives you more control of your PPC.
• Google is not the only game in town - automated rules work inside the Google AdWords system but for those with a strong presence on social media, for example, the time spent setting up automated rules might be better used working with a more holistic software system.

Scripting

API Scripts allow you to make automated changes in a different way to using automated rules. Utilising JavaScript for AdWords accounts you can ‘edit’ the nature of your AdWords account. Once again, there are a few considerations to take into account:

• To make really sophisticated changes to the way your AdWords account performs, you need a deep knowledge of JavaScript which isn’t always in the skillset of senior executives.
• While the benefit is that instead of setting up masses of automated rules you can write a piece of script to handle them all, it’s still an AdWords focused activity. Effective bid management software can handle this kind of approach but across more platforms than just Google.

Portfolio bidding methodology

Many organizations succeed fantastically well with portfolio bids which are a system of grouping keywords together in advertising groups (portfolios). For substantial businesses entire campaigns can be similarly grouped together. Corralling biddable items in this way means you can have one goal but create two portfolios each with a different strategy to achieve the goal. The advantage of portfolio bidding is that it requires substantially less hands-on management on a day to day basis. For new business sectors or products it can also offer a way to test bid management strategies in tandem so you don’t have to wait for two sets of data to run through, you run them in parallel and assess which works best for you.

In conclusion, PPC bid management is a complex subject but it doesn’t have to be costly or time consuming. Understanding your goals, working with suitable bid management software and being prepared to use a data-led approach to fine-tuning bids will generally result in success.