Bid management tools (Marin, Kenshoo, Acquisio, DoubleClick For Search) tout productivity, and increased efficiency but not without a hefty cost – charging 3% – 5% of spend. So is it worth it? Here are some of the pros and cons these tools promote and a comparison of what you get for free from AdWords:

•  Cross-Publisher editing is a big feature. When you see both AdCenter and AdWords in the same place it’s much easier to manage and strategies can be spread seamlessly across the two.
  • No arguments here, obviously Adwords will never give you the ability to edit AdCenter in it’s interface.
• Doing bulk edits by downloading data into a spreadsheet, making edits, and then re-uploading is essential for increasing productivity across thousands of keywords and ads.
  • AdWords editor does this for free (but not across publishers) and it’s a pretty new feature in AdWords as well.
• Customizable dashboards allow you to make better reports faster which allow for better analysis.
  • If you’re not content with the charts in the AdWords interface, you’ll need to use spreadsheets which are slower but you can make them exactly how you want and aren’t limited to the features of the dashboard tool.
• Flexible auto bidding algorithms allow advertisers to manage millions of keywords and ads effectively. Bidding algorithms look at all the possible signals available to decide what to bid so you can reach a desired CPA or ROAS which would be too difficult for any one person to do manually.
  • AdWords Conversion Optimizer is competitive with other tools as it is the only bidding algorithm that makes bids in real time, the rest do so reactionary through the API. Also, AdWords allows adding any keyword to Conversion Optimizer regardless of account structure making it pretty flexible. What it doesn’t have (yet) is options outside using a target CPA to optimize instead of a target ROAS.
• Dynamic account expansion allows large advertisers to create campaigns, adgroups and ads much faster using their product feeds and smart software.
  • The best AdWords has is the keyword tool and the ideas from the Keyword Opportunities Tool.
• Conversion attribution allows you to give keywords different levels of credit depending on what point they were clicked on in the funnel and use those rules in your bidding strategy.
  • With AdWords you can get insight with the Multi-Channel Funnel reports and more insight if you use Google Analytics but its not easy to incorporate learnings into bids.
• Customizable alerts that allow you to get an email if a swing in traffic or drop in CPA happen to a specific campaign/keyword/adgroup
  • Automated Rules in AdWords allows you to send emails that get triggered for changes in any metric.
• Tag any element of your account to easily find and schedule anything.
  • Adwords uses Labels to the same effect and also has Automated Rules but they don’t work with Labels.

Also consider:

• When AdWords comes out with new features it usually releases them in AdWords before making them available in the API so things like Dynamic Search Ads are not available in many of these tools that rely on the API.
• Enhanced campaigns are taking a lot of the complexity away that justifies these bidding tools – consolidating duplicated and triplicated campaigns for device, time and geography.

You can see that most features are mostly marginally better than what you get for free from Google. In my opinion, a bid management tool only make sense for very large advertisers with small SEM teams. I think their value propositions will continue to run thin as Google ups its investment in AdWords editor and the AdWords interface.

The real reason why many people use these bid management tools is because it takes the responsibility of paid search away from themselves and gives it to an algorithm. A computer can look at many more signals than a person can look at, make thousands a tweaks to bids at a time and learn as it goes – who can argue with a search manager that it’s not a good decision to invest in a tool like that? Besides whatever increases to ROAS it provides it also gives you a justification and an excuse to upper management if the program goes well and if it goes wrong.

The only affiliates that really want to bid on your brand keywords are coupon sites – Slickdeals, Couponcabin, Retailmenot, etc. because discounts are incredible clickbait, and with the 30 day post-click attribution windows (which most affiliates are set up on), discount ads on brand terms work out to be very lucrative for affiliates. So brand terms are usually out of the question.

The question does come up in regards to “brand + coupon” keywords though. If customers are proactively searching for coupons it can make sense to let affiliates bid on those keywords. The cost is all incurred by them, you only pay if a sale happens and if you were to put an ad up for your site like you would for a typical brand term, customers would likely bounce because they want to find coupons, not your homepage.

Some brands don’t want a coupon page on their site because they don’t want their products associated with discounts, but If you do have a page on your site that feature coupons like this Macy’s page, not letting affiliates bid on your brand + coupon keywords so you can have all that traffic for yourself can be very effective. The problem is this: most visitors don’t believe the brand’s page will have all of the coupons that are really out there. Chances are they will click on your ad and then leave to a coupon site anyway to see if there are any more coupons out there.

I think there are three options:

Because of the 30 day attribution window in search, most of the “brand + coupon” keywords are not last touch (affiliate is) but are still taking credit, so the paid search marketer loves the coupon keywords in his account because they perform really well and pull up account performance overall. Parting with them would mean doing what is best for the company, not whats best for his channel.

Product Listing Ads are currently one of the least transparent, (no avg. position, no impression share, no keywords) yet highest converting products in AdWords. By holiday 2013 I think PLAs will be one of the highest cost sections of any ecommerce paid search account. After you have set up your Product Listing Ads campaign(s) and added an adgroup targeting All Products, it feels like you’re done but there are still a few more things that you can do to improve PLA performance.

1. Create product targets as granularly as you can. Download your Google Merchant Center feed and add attributes per sku to the the AdWords_Label column. You should categorize for type, category, price, margin, style, sku and whatever else you can think of. If you can get all the way down to one product per adgroup, even better. There are two reasons for this: 1. the more specific you can be with your product targets the more specific you can be with your promo text which is set at the adgroup level, 2. you want your cpc bid to match as closely to the value of a click from that product as possible. If you have a very general product target then it will be hard to know what your bid should be when there is a wide range of products that match that target.

2. Use negative keywords to optimize your ads. You can’t bid on keywords with PLAs but you can see the queries that triggered your ads and add them as negatives (under the Auto Targets Tab > See Search Terms > All). Negative keywords are sometimes necessary to make distinctions between product variants. For example, if you sell a small and a big version of the same product you might want to add “small” and “little” as keyword negatives for the big version (and, conversely, add “large” and “big” for the smaller version).

AdWords Remarketing for search allows you to change your bid for a keyword if the user has been to your site before. Here are some interesting tactics to utilize this new feature:

Drive Incremental Sales With High ROI
Its hard competing with broad keywords while maintaining your ROI goal, as a result these broad keywords tend to be left inactive. So, create an adgroup that only competes in auctions for broad high volume keywords if the user has been to your site before.
Implementation:

1. Create an adgroup for your high volume keywords
2. Create a remarketing list for visitors to your website
3. Add that remarketing list containing visitors to your adgroup

Bid More For Repeat Customers
If you have data that shows repeat customers on your site have an average basket size that is 20% larger than that of a new visitor you can bid more aggressively to put your ad in front of those repeat customers.
Implementation:

1. Create a remarketing list based on visitors to a purchase confirmation page
2. Add that list to a copy of an existing Adwords adgroup
3. Edit bids so that they increase bids by 20% (or whatever) versus your original adgroup

Stop Paying For Clicks From People Already Subscribed To Your Email
If you have a goal to convert users to your email marketing list then you would want to exclude current subscribers from ever seeing ads. Once they have visited a page on your site that only email subscribers can get to, you can exclude them from your search campaigns.
Implementation:

1. Create a remarketing list based on visitors to a subscription confirmation page.
2. Navigate in Adwords to an existing campaign aimed at obtaining new subscribers
3. Add your remarketing list containing visitors to your subscription confirmation page
4. Click Custom Combinations
5. Choose None of these audiences (“NOT” relationship)

Treat Different Users Differently
If your website has three different offerings to visitors you may want to message those repeat visitors with tailored ad messages.  So, customize the advertising message these visitor groups will see.
Implementation:

1. Create three remarketing lists by putting three different remarketing tags on different portions of your website
2. Make three copies of an adgroup
3. Edit adtexts for each adgroup copy to put the most appropriate message to the users
4. Add the appropriate remarketing list to each adgroup

Re-engage Comparison Shoppers
If your customers tend to compare you to your competitors back to back you could serve ads on competitor’s brand terms only after they have visited your site first. Bidding on competitor’s brand terms tends to be expensive but using remarketing for search could make it more affordable.
Implementation:

1. Create an adgroup for your competitors keywords
2. Create a remarketing list for visitors to your website
3. Add that remarketing list containing visitors to your adgroup

Using broad match as your keyword discovery tool will help you expand the keywords in your account and once you have found good performing keywords its smart to add them as phrase and exact match too. With the same keyword on broad, phrase and exact match, results can be segmented based on match type and optimization strategies can be implemented for each keyword.

With a big account its easy to lose track of keywords that are active in broad match but not exact or phrase. Vlookup is one way to do this and another is using Google Analytics.

In Google Analytics go to Advertising > Keywords and then in the upper right hand corner of the data table click the Pivot button. Then pivot by Match Type and for the pivot metrics you can choose visits and revenue to see how efficient they are.

Download the report in CSV (to add more rows than 500 look for rowCount%3D in the URL and add the amount of rows you want after the D) and sort visits descending under the broad match column and then filter the exact match column to only show 0. Now you can see the keywords that are driving revenue in broad but not in exact. Add these keywords as exact for more insight and flexibility.

It’s smart to build out separate campaigns targeted to mobile and tablet devices exclusively, as this can lead to much higher efficiency, but the problem is keeping all of these duplicate campaigns up to date with your desktop campaigns. You may add new keywords that perform well on desktop but neglect to add them to mobile and tablet. using the VLookup function in excel you can easily discover which keywords are paused or absent from one device to the next.

1. Download all  your active keywords from your desktop campaigns (for my explanation put the keywords in column A).

2. Download all active keywords from your tablet campaigns and put them in a second tab on the desktop Excel worksheet (keywords also in column A).

3. Add a third tab on the desktop worksheet where you paste all of the keywords from the desktop account in the A column.

4. On tab three In the B column use the VLookup function so that it looks like this: =VLOOKUP(desktop_keywords!A1,tablet_keywords!A:A,1,0). What this function is saying is – take the keyword in cell A1 from the list of active keywords on desktop and then look at all the active tablet keywords in column A – if you find it, put it in this column, if not put #N/A.

5. After the function is put into place in column B, you can see the keyword that exists on desktop in column A and if there is a #N/A next to it in column B, you’ll know its not active on tablet.

6. Now you can sort by #N/A and take add all those keywords to your tablet campaigns.

An ad that is shown in the top position usually has a much higher click through rate than an ad shown on the side. If you could get your highest performing keywords in the top position more often it can pay big dividends in volume and revenue.
How do you identify those keywords that aren’t showing up in the top position as often as they could and bid them to the top spot accordingly?

1. Download a keyword report for the last 30 days with the the Segment Top vs Side.

2. Create a pivot table with the data from the report and then build the pivot table like this.

This will allow you to see each keyword’s top and side metrics on one row.

3. Copy the new filtered table over into a new worksheet so you can add new columns and filters.

4. Make a new column Percent Of Conversions Top which takes the Total Sum Conversions divided by the Sum Of Impressions for Google Search: Top.

5. Make another new column Percent Of Impressions Top which takes the Total Sum Impressions divided by the Sum Of Impressions for Google Search: Top.

6. Now if you filter your new column Percent Of Conversions Top for greater than 50% and your Percent Of Impressions Top for less than 50% you’ll see the keywords that get more than 50% of their conversions from the top position but get less than 50% of their impressions from the top position.

7. Now if you take the difference between the Sum of Avg. CPC Top and Sum of Avg. CPC Other you will get the difference in (estimated) bid increase to get more of those impressions from the side to the top.

In the below screenshot the first keyword has 82% of its conversions coming from the top but only 28% of impressions coming from the top, and the difference between the average CPC of top and side is only $.07. So with a small bid increase this keyword could improve considerably.

Paid search is subject to the law of diminishing marginal returns where the last dollar spent has a lower ROI than the first dollar spent because the most cost-effective keywords are always purchased first.

There are two constraints at work here: budget and search volume. With a limited budget you will bid on the highest returning ROI keywords first. When you have a high impression share on those keywords and more budget, you’ll start expanding into different keywords – inevitably you start bidding on keywords that have lower ROI. Revenue goes up but ROI goes down.

The challenge is to decide which is more important – more revenue or or more margin dollars. You can’t have both.

Quality Score, CTR, conversion rate, – all are a means to an end. The end for all paid search is profit. If you know what your costs of good sold is and what your cost per conversion is, then add them together minus your revenue and you can determine what your profit is. The trick is figuring out what the optimal balance is between volume and cost per conversion.

The more willing you are to have a higher cost per conversion the more volume you will do and the more profit you will make. But at some point there is a diminishing return where the extra cost per conversion is not made up with the addition conversions it brings.

Below is a graph showing where the sweet spot is – where cost per conversion allows the optimal amount of volume.

If only paid search were as easy as deciding how much volume you want along with your desired cost per conversion. Unfortunately you can’t control how many people search using your keyword and of those how many click on your ad, but you can have this model in mind and constantly tweak bids in an effort to find the sweet spot.

Download the xlsx file I used to make the graph

Retail stores have an important metric called “same store sales” which measures the percentage of change in revenue for stores that have been open for more than a year. This statistic allows you to determine what portion of new sales have come from sales growth and what portion from the opening of new stores. Although new stores are good, eventually there is a saturation point where more stores won’t be sufficient and growth will rely on growth of existing stores.

I think paid search should have a similar metric. Is the account growing because you are getting more efficient or are you just adding more keywords? New keywords are good but what money are you leaving on the table due to less than optimal use of current keywords because you’re too focused on constantly adding more? On the other hand, are you adding new keywords so infrequently that the potential for growth is limited?

Download two months of your account and do conditional formatting to highlight duplicates, then filter the keywords to see total revenue from new keywords month over month compared to same keywords.