Pay-per-click (PPC) advertising is becoming an important marketing tool, with practitioners allocating increasing amounts of their budgets to the medium. According to figures by the Internet Advertising Bureau (IAB) search ads grew by 39 per cent last year to a total spend of £1.6 billion. But despite its popularity, search is not the simplest of mediums to manage; developing and maintaining successful bid strategies is a time-consuming and involved process. As such, marketers are increasingly outsourcing the function to experts, and there are now a plethora of bid management tools on the market to help them to do this.
In fact there are now so many automated search tools out there, deciding which one to use can be time-consuming in itself. As the PPC market has matured, so have the tools that service it, and outsource providers offer a range of services to suit budget and need. More ‘traditional’ tools, such as Bid Buddy, operate on a rules-based management system, giving marketers the control to specify, for example, the day, or time of day and when they want to increase or decrease bids. But some tools are becoming ever more sophisticated. Efficient Frontier uses what it calls a ‘portfolio’ approach. “It is fundamentally different in that it can forecast click volume, cost-per-click, conversion rate and potential ROI for every keyword, which rules-based systems cannot do,” explains Jonathan Beeston, Efficient Frontier’s client services director.
Getting clever
This shift towards a more sophisticated type of automated tool is down to the power of Google. Its quality score – which measures how relevant the content on a webpage is to the keyword that leads the searcher there – means it is no longer enough for marketers simply to buy keywords and wait to appear at the top of the listings. Nowadays, they need to keep track of not only how keywords are performing, but on conversion rates too – i.e. whether those clicks are delivering a return on investment. “The bid is important, but if you don’t have a quality website or if your ad creative isn’t selling exactly what is on your site, then even if you are bidding high you will find yourself in a lower position in the rankings,” says Salvatore Esposito, MD of GoAdv Group.
This might not sound like a problem for B2B brands. After all, businesses looking to gain custom from professionals are hardly likely to put out ads that don’t sell the proposition. But competition for top rankings is tough, and experts believe that good copy or not, both commoditised and niche B2B brands will increasingly have to ensure their bid management strategy is watertight if they are to fight it out for top-end search engine rankings. “Search requests on the Internet are becoming increasingly niche, so there is definitely an opportunity for those types of B2B brands here,” says Ritchie Jones, creative technology director at Yucca. “A lot of niche brands that until now might have successfully managed their strategy in-house using Google AdWords, are now looking to outsource their PPC function.”
Simon Norris, director of Periscopix, points out why automated search is equally important to commoditised brands. “A company with a huge directory of products needs to bid on thousands of search terms. Because the paid search market is more expensive now, it is more competitive and companies need to make sure campaigns are adjusted regularly, making sure keywords are kept in a good state of tune. That can really only be achieved using automated tools,” he says.
Spending adjustments
So how much does it cost to set yourself up with an automated tool, and does it suit every budget? “There is usually a set up fee and a (fee of the) percentage of PPC adspend starting at around 10-15 per cent, reducing if spend figures are substantial,” says Beeston. “Most large specialist search agencies have a minimum monthly spend of usually £30,000 or more. Those advertisers with smaller budgets need to start with smaller agencies or do it in-house.” Adds Jones, “If you’re on a small budget, you can buy in a media optimisation tool, but you might not get a good performance because you’ll be up against agencies with bigger budgets for more sophisticated tools and specialists to operate them. I recommend talking to an agency with experience of working with small businesses, so they can advise on the best thing for their budget.”
Jon Myers, Mediavest’s head of search, says that if you have a small monthly budget to allocate to your PPC strategy, you’re better off ditching the idea of outsourcing and managing your campaign in-house. “If you’ve got £1500 or less a month to spend, I’d recommend using Google’s free tools like AdWords, which are adequate for managing and tracking. Don’t spend £5000 on tracking if you only have £2000 – it doesn’t make sense and will harm your ROI.”
The other option is to consider buying your own tool from a company that develops the software. TradeDoubler, for example, licenses its Search Ware 4 software to clients (as well as agencies). This can be expensive though and is recommended only for large organisations that have the internal resources to manage the software. “Why spend time and money buying a tool and training staff to use it when for less money, you can hire a team of experts to do it for you?” argues Norris.
Heads or tails?
Once you’re up and running, identifying which keywords to automate is paramount. Experts advise that you divide keywords into ‘head’ and ‘tail’ words, with ‘tail’ words becoming the ones your automated tool looks after. “‘Tail’ terms are less valuable, the ones you expect to hit lower volumes of traffic with,” explains John Helstrip, product strategy director for TD Technology at TradeDoubler. “You would apply your automated strategy to those and allow it to adjust bids so they’re hitting targets you specify.” ‘Head’ words are more valuable and should always be managed personally, say search experts, no matter how good your automated tool. “No matter how sophisticated these tools are, they cannot manage as effectively as a good marketing manager when it comes to the most important keywords,” says Esposito.
The creative management of search engine ads and the landing pages they lead to is, believes Esposito, of crucial importance to all PPC marketers, and something they will need to focus on more stringently as Google’s quality score system evolves. Graeme Horne, marketing manager at Hungry House, agrees. “Getting a high quality score is an important part of the competitive process. By doing so, you can appear above other advertisers, despite paying less per click. It’s Google’s reward for your ad and site content being relevant to what the user is searching for,” he says.
To this end, some of the bigger automated tool providers are looking at ways to integrate creative services to help marketers achieve higher rankings. “We already have tools to manage the editorial content of an ad, and later this year we’ll be launching a tool that enables people to manage the content of their landing page to optimise that conversion rate,” says Helstrip. He adds that the company is also looking at ways of linking the performance of ads to stock levels, so that if for example a company’s stock levels on a product are running low, that campaign can be paused, or the price adjusted, to slow down sales.
“As a channel, search is developing fast,” sums up Anne-Sophie Forget, head of search services in Europe, for Coremetrics. “The key trend is that strategies are becoming more sophisticated, placing search in the context of integrated marketing campaigns rather than in an isolated silo. Automated bidding tools will evolve in line with this demand.”
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