Archive for ‘Bid Optimization’

Think You’ll Lose Money by Bidding for the Top Spot? You May be Surprised.

By October 13th, 2014

You put a lot of time and effort into your Paid Search advertising. You leverage Marin’s bidding algorithm to efficiently and effectively automate your bidding process based on individual ROI/CPA goals.

Your competition probably follows a similar process. So how is it that your competitor keeps showing in the first spot, even when you try to loosen the reins on your ROI/CPA targets? You enviously theorize about their amazing site conversion rates or a giant SEM budget that permits them to outbid anyone just for the sake of being number one.

In all likelihood, their reasoning is probably more scientific than you think; it’s just a different science than you are used to.

Let’s consider two competing advertisers with identical site conversion rates and AOV, both selling and bidding on the term “Acme Widgets.” Advertiser 1 is on an ROI-based model and will value that click based on what they expect to make from any orders that occurred that day. Advertiser 2 knows that on average, when a customer makes a purchase of Acme Widgets, the value extends much further. They get looped into the CRM system, email, SMS, and direct mail cycles, and tend to stay with them for about 3 years, placing several orders per year throughout that time.

Who do you think will be willing to pay more for that bid, and will constantly win the auction for that top position?
The majority of digital advertisers’ budgets fall into two categories:

  • Fixed – Get the most revenue/leads you can out of $X
  • ROI/CPA-based – Acquire as many customers as you can, but only up to a fixed ROI or CPA

When asked what the main goal of their digital marketing program is, however, a common response from the executive team is “grow the business” and/or “acquire new customers.” Deep down inside, they know that there is value that extends beyond that initial purchase, but can’t wrap their heads around the short-term cost vs. the long-term gain.

This creates a challenge for marketers who try to manage to a fixed ROI. When they optimize for growth and new customers, the CPA rises. When they optimize for ROI, the growth stops. This results in targets that are constantly moving back and forth.
To truly compete and acquire new customers in the digital landscape requires a mindset that values the entire customer lifecycle and stresses growth and profit over all else.

A Challenging Paradigm Shift

It seems obvious, but most advertisers are not thinking like this. The truth is that it is difficult to change models that have been in place for a long time and require sign-off from several stakeholders.

Understanding the lifetime value of a customer will significantly shift how you view digital media investment and should become an element of your measurement and optimization. You can streamline this process by leveraging Marin’s Custom Column feature to bring LTV calculations into your dashboards or bidding logic. If you aren’t sure how to get started, an excellent 4-part series recently wrapped up with a wealth of information on building LTV models.

Next, once you find a CPA that works better to maximize your customer growth and profits, don’t hold all digital marketing channels to that same CPA. Tactics work very differently, but work well together to help your reach your overall growth goals.

Finally, give it time – You already know that it takes a long time for a customer’s value to build within its lifecycle, so give your new model time to grow, too. You can still monitor daily or weekly like you’re used to, but don’t panic when efficiency suffers initially, because it will. Test often, but adopt a monthly or even quarterly mindset when it comes to significant trimming and optimizations. Without growth there would be nothing to trim at all.

About the Author

Dane Manning is a Paid Media Manager at Rosetta, a full-service customer engagement agency. He joined Rosetta in 2008, and has successfully led the digital marketing strategy (paid search, online display, paid social) for his clients across the B2B, Retail, and Financial Services verticals. Dane graduated from Cleveland State University with a BBA in Marketing.

How to Bid Your Way to a Successful Facebook Campaign

By August 6th, 2013

Bidding can be one of the most challenging aspects of Facebook advertising. However, by making good use of proper testing and tracking methods, it doesn’t have to be. Marin Software’s new white paper provides a breakdown of Facebook’s bidding models and offers advanced tactics to make your campaigns a success.

Advertisers can buy Facebook ads on a CPM, CPC, or “OCPM” model. The majority of advertisers opt for a CPC model, taking advantage of the opportunity to pay only for clicks, rather than impressions. Under this model, Facebook provides a suggested bid range. If your bids are too low, you may not achieve optimal audience reach. If your bids are too high, you’ll likely end up eating away at your ROI. As a best practice, pick a mid-point in the recommended bid range and adjust from there based on performance.

marin software facebook bidding

When it comes to bidding, automated solutions put sophisticated advertisers at a significant advantage. Third-party bidding solutions enable marketers to create custom groups of ads based on business goals, then algorithmically leverage data from other ads to calculate optimal bids that maximize performance. Automated solutions also excel for tracking purposes. The ability to weight on- and off-Facebook conversions independently enables you to use more of your budget to drive higher-value clicks.

Top Industry Tips:

  • If you’re using a CPC model, pick a mid-point in the recommended bid range and adjust from there based on performance.
  • Consider testing the CPM or OCPM models if you are targeting a very niche audience and are facing low competition.
  • Avoid tracking solutions that treat all conversion types equally. Instead, opt for one that can distinguish between on- and off-Facebook conversions, and weight them independently.
  • Don’t forget to account for “noise” produced by short-term campaigns when optimizing Facebook creative across an entire portfolio.
  • When starting with a new ad, analyze your portfolio to find other creative with a similar message and goal, and bid based on the performance of those previous ads. Alternatively, use an automated solution to help streamline this effort.
  • To optimize your Facebook campaigns based on a complete picture of performance, deploy an automated bid solution that can integrate multiple conversion types and conversion data from multiple sources.

marin software facebook bidding

Final Thoughts: As we wrap up our series on Facebook tips and best practices, here are a few key takeaways to keep in mind. First, don’t be afraid to experiment with new targeting options and ad formats. Second, remember that Facebook advertising is often about measuring long-term engagement rather than short-term sales. And finally, consider Facebook alongside the rest of your online and offline activity for a complete picture of ROI.

For additional best practices, download our full Facebook white paper, “The Marketers’ Guide to Driving ROI from Facebook Advertising”.

5 Easy Ways to Streamline Your Day

By July 1st, 2013

Do you find yourself wishing there were more hours in the day? Are you faced with a neverending to-do list? Then take five minutes out of your hectic day to read our latest blog post which highlights 5 ways Marin can help you streamline your day.

flavor flav - marin time savings

 

Web Query Reports

Wouldn’t it be great if you could wave a magic wand and your Excel report completed itself? Well, waving a magic wand is optional but with Marin’s Web Query reporting you can embed a link in Excel which will automatically pull in the latest data from your Marin account and update any graphs or charts you have built in Excel!

Average time saved per week – 4 hours

 

Automated Bidding

Manually calculating keyword bids, even with the help of Excel, can take hours and many marketers find themselves calculating bids once or twice a week because they simply don’t have time to do it daily. However, because the search auction is so dynamic, if bids are not being calculated daily then you’re not maximizing revenue. Other keywords you may run on a position target strategy which, again, requires bids be calculated daily in order to maximize revenue and avoid unnecessary spend. Marin caters to all bid strategies and calculates bids daily using only the most recent, most relevant data to give you the confidence to put your mind to more strategic tasks.

Average time saved per week – 10 hours

 

Keyword Expansion

Many marketers we talk to say that adding to their keyword (and negative keywords) lists is something that regularly gets dropped from their things-to-do list due to more pressing tasks like reporting and bid optimisation. However, expanding your keyword (and negative keyword) lists to ensure maximum exact match coverage can significantly reduce CPCs as you no longer have to rely on more expensive broad match terms. With reduced cost comes increased ROI, and who doesn’t want that? Marin will automatically add new keywords (and negatives) to your account based on the number of clicks and conversions they have generated (or not generated when it comes to negative keywords).

Average time saved per week – 3 hours

 

Marin Next

Marketers often struggle to identify and prioritize the most impactful activities that will provide incremental performance improvements for their online marketing programs. Marin Next is an intelligent recommendation engine that leverages Marin’s proprietary optimization methodology—based on experience with hundreds of leading brands—to uncover new revenue opportunities and help marketers address them with best practice workflows. Average time saved per week – 8 hours Saved Views You want to pause under-performing keywords, but they come in several flavours – how do you find the time to run all the data analysis required to find them all? Simple, Marin’s saved views allow you to apply the filters you want to your data and save the view; you can even share the view with other users. Then each day you just login and select your views, Marin does all the hard work for you, all you have to do is take action, which you do on the same screen. It doesn’t get much simpler than that!

Average time saved per week – 5 hours

 

Saved Views

You want to pause under-performing keywords, but they come in several flavours – how do you find the time to run all the data analysis required to find them all? Simple, Marin’s saved views allow you to apply the filters you want to your data and save the view; you can even share the view with other users. Then each day you just login and select your views, Marin does all the hard work for you, all you have to do is take action, which you do on the same screen. It doesn’t get much simpler than that!

Average time saved per week – 5 hours

 

We think that’s pretty impressive and hope you do too! Let us know what you do with the extra 30 hours a week.

Calculating Optimal Bids with Irregular Data and Conversion Latency

By May 30th, 2013

Marin Software Actionable RecommendationsIn a previous post, we explored the effects of seasonality and cyclical trends on revenue-per-click (RPC) and conversion rate. Today, we’ll take a look at how identifying and excluding irregular or outlying data, and accounting for conversion latency, are critical to calculating optimal bids and maintaining control over revenue outcomes.

Seasonality and Outlying Performance

During the holiday shopping season, RPC and conversion rates can double in the months leading up to mid-December, and drop dramatically thereafter. Leveraging data during these periods of irregular paid search performance can result in suboptimal bid calculations. In order to factor these types of performance shifts into their bidding strategy, search marketers must first identify outlying and irregular data and subsequently exclude those dates or date ranges from bid calculations. Using advanced filters and alerts, search marketers can manage their data by exception and quickly identify the extent to which seasonality or cyclical behavior has impacted paid search performance.

For example, you might create an alert to notify you when RPC or conversion rate has increased by more than 50% of the average over the last three days. It’s possible that a new promotion or period of seasonality is causing a significant shift in performance. Excluding dates with outlying RPC or conversion rates will prevent calculations from inflating bids even as performance returns to normal.

Conversion Latency

Looking past seasonality and cyclical trends, date exclusions are also critical in accounting for conversion latency—the time between an initial ad click and an eventual conversion or revenue. Conversion latency varies across industries and product lines, ranging from same session to several months. For certain businesses with high consideration products or services, conversions and revenue can go unattributed to click and cost data for extended periods of time. As a result, bid calculations that leverage these periods of incomplete data fail to maximize performance. To address conversion latency, search marketers need the ability to exclude the most recent days from bid calculations.

For instance, if it typically takes two days for a customer to complete a purchase after clicking on a paid search ad, a sound bidding strategy would exclude the last two days from bid calculations. This would ensure that bids aren’t being calculated using click and cost data that would otherwise have revenue attributed to it after two days. Dynamically extending or shortening a rolling exclusion window (in the example above, it would be a two day rolling date exclusion), depending on business needs, enables search marketers to calculate optimal bids based on a complete picture of paid search performance.

Marin Software Rolling Date Exclusion

Informed vs. Reactive Bidding

For some businesses, high conversion latency can often warrant leveraging a lengthy rolling date exclusion. However, to remain competitive and respond quickly to shifts in the bidding landscape, carefully consider how long of an exclusion window is used. For example, let’s pretend that a business needs to wait sixty days until 98% of their revenue is attributed back to their paid search clicks. With a sixty day rolling date exclusion, it would require them to wait nearly two months before making informed bid calculations. Due to this length of time, they would undoubtedly fail to capitalize on immediate revenue opportunities. On the other hand, let’s assume that the same business can attribute 80% of their revenue after seven days. Using a seven day rolling date exclusion, they could still calculate informed bids while remaining reactive to the current bidding landscape.

Optimizing Paid Search Bids for Seasonality & Cyclical Trends

By May 16th, 2013

Anticipated changes in paid search performance, such as increases in RPC or decreases in conversion rate, create a common challenge that all bidding strategies must address—seasonality. To account for seasonal changes in performance, like the holiday shopping season, search marketers must constantly analyze year-over-year performance and adjust bids according to identifiable trends. Whether you’re driving clicks, increasing conversions, or maximizing revenue, accounting for these types of fluctuations in performance is critical to success in highly dynamic and competitive bidding environments. By deploying boost schedules, where bids are increased or decreased over specified time periods, search marketers can optimize their campaigns ahead of expected fluctuations in RPC or conversion rate. For example, a marketer might bid aggressively or dampen bids for in-season and off-season products, respectively. A bidding strategy that doesn’t adjust bids for seasonality will fail to capitalize on critical revenue opportunities throughout the year, enabling competitors to capitalize instead.

Example Boost Schedule

For more information on how to determine an optimal boost during seasonal periods, please see our tutorial on adjusting bids for seasonality.

Cyclical Trends

Cyclical, as opposed to seasonal, shifts in RPC or conversion rate can last for time periods shorter or longer than a calendar year. In paid search, these trends are typically observed as day-of-week or time-of-day fluctuations in performance. For example, an increase in mobile conversion rate during afternoons and evenings, or a decrease in desktop RPC during weekends. To account for cyclical trends, search marketers must analyze campaign performance across multiple weeks, identifying day-to-day changes in RPC or conversion rate; and in more sophisticated bidding strategies, analyze hourly changes in performance. Once these trends have been identifying, search marketers can implement dayparting strategies unique to each campaign, where keyword bids are boosted or dampened by day or by hour to maximize paid search performance.

Marin Enterprise Ad Scheduling Recommendations

Addressing Seasonal and Cyclical Data

Accounting for shifts in consumer behavior, whether it’s seasonal or cyclical is critical to a sound paid search bidding strategy. However, increases and decreases in RPC and conversion rate often results in periods of irregular performance. Consequently, bidding solutions and tools that don’t exclude this data may calculate suboptimal bids. So how do search marketers account for periods of incomplete or irregular data? Next time, we’ll take a closer look at addressing conversion latency and the importance of excluding abnormal search data from bid calculations.

Google Is Listening: Enhancing the Enhanced Campaign

By April 11th, 2013

Morpheus Enhanced Campaigns Mobile Bid AdjustmentsOn Tuesday Google announced that advertisers will soon be able to set mobile bid adjustments at the ad group level, in addition to the campaign level, for enhanced campaigns. This comes on the heels of Google’s release of two new ValueTrack parameters: {ifmobile:[value]} and {ifnotmobile:[value]}. Google also indicated July 22, 2013 as the start of the migration deadline, when AdWords will begin automatically upgrading legacy campaigns to enhanced campaigns.

These recent announcements shouldn’t come as a surprise to search marketers. Google has historically made adjustments to new AdWords features as market demands became more evident. (A recent example is last year’s update to the campaign ad rotation settings.) Sophisticated search marketers have been asking for additional enhanced campaign features to provide additional control and transparency for optimizing their paid search programs. Today, we’ll review the two recently announced enhancements to enhanced campaigns and discuss their importance to search marketers who operate in a multi-device world.

Ad Group Mobile Bid Adjustment

Before this Announcement: A mobile bid adjustment could only be set at the campaign level, which allows advertisers to boost desktop keyword bids for searches on mobile devices by -100% to 300% across the entire campaign.

The Ask from Marketers: Search marketers are used to granularity. From management to reporting to optimization, sophisticated marketers often desire to operate at the most granular levels possible, which often means making decisions down at the keyword level. The reason is that clicks, cost, conversions, and revenue data are all attributed at the keyword level; and in order to optimize bids and maximize performance, keyword-level bids needed to be calculated and applied individually.

The Updated Approach: Google will now allow advertisers to set a mobile bid adjustment at the ad group level. Once implemented, the same boost range, from -100% to 300%, can be applied to all desktop keyword bids within a given ad group for searches made on mobile devices. The campaign level mobile bid adjustment will be ignored if an ad group level bid adjustment has been set.

What It Means: The enhancement to allow group-level mobile bid adjustments provides search marketers with additional control over their enhanced campaigns and mobile performance. For advertisers that follow account best practices, where ad groups contain a small set of like or similar performing keywords, this enhancement should meet the requirements for most paid search programs. Although some search marketers may long for keyword-level mobile bid adjustments, keep in mind that the goal of enhanced campaigns is to simplify the way advertisers manage their paid search campaigns across device, location, and time of day. Group-level adjustments appear to be a reasonable and effective compromise.

{ifmobile} and {ifnotmobile} ValueTrack Parameter

Before this Announcement: Search marketers could only leverage one landing page across all devices rather than have the ability to direct users to optimized landing pages based on device. The other option was to remove keyword level destination URLs in favor of creative level URLs.

The Ask from Marketers: Screen sizes and user behavior varies significantly between desktop and mobile devices. Presenting users with a device-specific landing page is critical to improving the user experience and maximizing paid search performance. Consequently, advertisers wanted the ability to define two destination URLs at the keyword level in order to present the most relevant content and optimal experience based on the device the user is searching on.

Device Optimized Website - NY Times

The Updated Approach: The {ifmobile} and {ifnotmobile} ValueTrack parameters will enable search marketers to direct users to device-specific landing pages at the keyword level. Additionally, these new parameters enable the measurement of the effectiveness of campaigns by device for advertisers who are unable to leverage the {device} ValueTrack parameter.

What It Means: The ability to assign a device-specific landing page falls directly in line with Google’s approach to a multi-device world—helping advertisers reach consumers with the right ad experience based on device, location, and time of day. As users move across device, this enhancement will enable search marketers to remain relevant and engaging.

Google Is Listening

Clearly, Google is open to enhancing enhanced campaigns based on industry feedback. However, I wouldn’t expect any further changes to be announced ahead of the migration deadline as advertisers nail down their migration plans and establish revised best practices before heading into the holiday season. In order for enhanced campaigns to be a win-win-win solution (for Google, the consumer, and the advertiser), Google will need to continue collecting and applying market feedback, especially once all advertisers have migrated over to enhanced campaigns.

The Truth about Real-Time Bidding in Paid Search

By April 1st, 2013

Marin Software Actionable RecommendationsCalculating and pushing keyword bids in real time is one of the most talked about paid search bidding strategies. However, this approach is easier said than done. Accounting for consumer behavior and collecting enough performance data minute-to-minute or hour-to-hour is difficult and often results in sub-optimal bids. Today we’ll discuss the challenges that online marketers face when attempting to calculate bids in real time and the requirements that need to be in place to execute a successful bidding strategy.

Consumer Behavior

Consumers often click on multiple ads before converting. In many cases, they conduct research using several different search queries over the course of days, weeks, or in some cases months. Often times a consumer will validate their decision with one final burst of research just before converting. This delay between the initial ad click and subsequent conversion is known as conversion latency. To measure this latency, advertisers rely on tracking solutions that identify each unique user and follows them through the conversion process. The conversion and any associated revenue can then be attributed across each touch point; for example, the three paid search clicks that occurred prior to a purchase. Achieving this level of visibility enables automated bidding solutions to calculate accurate and optimal bids for all keywords that contributed to the conversion.

Display Retargeting vs. Search

Real-time bidding was born in the world of display retargeting, where advertisers bid to deliver ads to specific users based on information collected about them, such as which products or pages they’ve previously viewed on a company’s website. In this scenario, an automated bid, calculated and pushed out in real time, enables advertisers to target their spend and impressions towards consumers who are more likely to convert. The likelihood of a conversion is estimated using large datasets; the behavior of thousands, if not hundreds of thousands of visitors to a website is analyzed before implementing an optimal bidding strategy. This is a fundamental difference when approaching real-time bidding in display versus search, where the amount of data collected for display retargeting is significant enough to inform bidding decisions in real time.

Real-Time Bidding in Paid Search

In paid search, the data collected for a keyword in real time is minimal. Calculating keyword bids based on such a small dataset is extremely risky as these bids often leverage an insignificant amount of data that doesn’t account for consumer behavior.

Marin Software Rolling Date Exclusion

To address this challenge, Marin developed a patented bidding algorithm that utilizes Bayesian Estimation to minimize the risk of bidding on low volume keywords. Additionally, to account for consumer behavior, Marin allows online marketers to exclude performance data from bid calculations across a custom rolling date range. For businesses that experience high conversion latency or a large proportion of latent conversions, this means optimal bids based on accurate and complete performance data. Finally, Marin analyzes time of day paid search performance across multiple weeks in order to identify significant trends. These trends are used to inform daily and hourly dayparting recommendations, which can be implemented with just a few clicks.

Execute a Sound Strategy

When making bidding decisions, online marketers must ensure that they have a complete picture of performance. For paid search campaigns that are subject to conversion latency, this means sacrificing real-time bids in favor of implementing rolling date exclusions across a significant amount of performance data. Search marketers that execute their bidding strategy with this in mind are positioned to calculated optimal bids that maximize keyword performance.

 

For more information on Marin’s bidding solution, please contact info@marinsoftware.com.

 

Marin’s Enhanced Bidding Capabilities Maximize Revenue Outcomes

By November 5th, 2012

As online advertising budgets rise, marketers find it increasingly difficult to calculate bids across large-scale campaigns, account for conflicting business goals, and respond to seasonal and market shifts. To address these, Marin has made some significant enhancements to our patented bidding technology.

Through advanced execution techniques that include predictive analytics, KPI maximization subject to constraints, and adaptive learning methods, advertisers and agencies alike can now realize even more significant financial lift via Marin bid optimization. Specifically, our enhanced bid optimization capabilities enable marketers to maximize revenue outcomes such as clicks, revenues or profit while accounting for multiple business constraints such as spend targets and performance.

Marin Bidding and Forecasting UI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By design, Marin bidding preserves visibility and control for the marketer. Advertisers are able to define their own portfolios, set business goals and constraints, and build a forecast of bid outcomes. Using an interactive interface, marketers can now perform a “what-if” analysis to understand trade-offs between volume, cost, and profit associated with varying bid scenarios.

The enhancements to Marin bidding are available immediately for all Marin Enterprise users, enabling online marketers to maximize financial lift. Initial results have been very promising: 77% of users who have deployed the solution have seen financial lift above and beyond their previous results, with an average lift (measured by increase in clicks, conversions, revenue or profit) of 20% or more. As an example, Symantec, one of the world’s largest software companies, keys on revenue maximization and utilized Marin’s new bidding enhancements to increase ROAS by 67%.

Adjusting Bids for Seasonality [Video]

By June 11th, 2012

If your paid search program experiences an increase in volume over a seasonal period, how much should you increase your bids by to maximize performance? Sam Wilcke, PhD and Director of Analytics at Marin, talks through how to do this and dispels a common misconception.

2 Ways to Decrease Your First Page Minimum Bid

By June 6th, 2012

If you’ve ever browsed through your AdWords account, you’ve most likely encountered Google’s pesky keyword status, “Below first page bid”. This estimate is based on your keyword’s Quality Score and competition, and is the bid you’ll likely need to set in order for your creative to show on the first page of search results. Though these keywords are active, they’re most likely missing out on a large chunk of impressions, and potential clicks and conversions. Since this first page bid is directly linked to Quality Score, marketers that regularly experience high first page bid estimates will likely benefit from improvements to their keyword’s Quality Score. Today we’ll review two strategies for decreasing your first page minimum bid.

AdWords First Page Bid Estimate Keyword Status

 

 

     

     AdWords

 

Marin First Page Bid Estimate Keyword Status

 


     Marin Enterprise

 

When adding a new keyword, you’ll notice that Google automatically assigns an initial Quality Score. Whether that score is high or low, it’s determined by the keyword’s historical performance for other advertisers who have targeted that same keyword. As a result of this assigned Quality Score, your initial keyword bid might be below the first page bid estimate. As a best practice, be sure to check the status of all your newly added keywords and ensure that you’ve set appropriate bids that are above the first page minimum. It’s critical that marketers do this, since a keyword’s initial performance will dictate whether or not its Quality Scores move above or below the assigned score. Give your keyword bids an initial boost to help facilitate a higher ad position. A higher ad position promotes a higher click-through-rate (CTR), which remains one of the most significant factors in improving Quality Score. Once your keywords have established their own Quality Score, hopefully better than what was inherited, reassess your bids. With higher Quality Scores, your first page bid estimates will have dropped, allowing you to bid less for the same ad position.

Google Quality Score Breakdown

 

 

 

 

 

 

 

 

 

 

 

 

For keywords that have an established Quality Score, decreasing the first page minimum bid can be a long and difficult task. In addition to setting an appropriate bid above the first page minimum, marketers must take the necessary steps to increase keyword relevance to promote higher CTRs. Create an organized campaign structure that promotes granular groups containing a highly focused set of keywords. In addition, generate relevant and engaging creative to support your keyword set. Finally, assign appropriate landing pages that focus on providing the best customer experience. These tried and true best practices not only ensure that relevancy is maintained from impression to conversion, but will result in Quality Score improvements and decreases to first page minimum bids.

For additional best practices on improving Quality Score, click here.

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