Should You Pay For A Paid Search Bid Management Tool?

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.
  • 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.

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