All posts by LisaArsenault

When it Comes to Bid Optimization, are you ‘Book Smart’ or ‘Street Smart?’

In talking with prospective customers on a daily basis, I field a lot of questions about the science of bid optimization. But over the years, the nature of the questions has shifted from “can you” to “how do you” and have become increasingly complex, as search marketers grow savvier. And even though we’ve been optimizing search campaigns using predictive portfolio methodology since 2005, the marketplace has only recently widely adopted the approach.

Taking a trip down memory lane to when I first started working with IgnitionOne (then SearchIgnite), I thought I’d share my personal recollection of how bid management questions have gotten more sophisticated, tougher, and longer over the years.

But is there a point at which the evolution of our questions and understanding (or lack thereof) of bid science will actually come at the detriment of our campaign performance? And are we relying too much on automated bid science to drive performance?  Can bid and campaign optimization be completely automated by algorithms? Is an algorithm going to put me out of a job?  ARE ALGORITHMS TAKING OVER THE WORLD?!

Okay- maybe I slipped too far down the slope on that last one, but hopefully you see where I’m going with this. As far as we’ve come in our understanding of rules versus portfolio logic, I’ve noticed a surprising backlash against portfolio optimization tools lately. More and more marketers have been coming to me saying that they have portfolio tools, they understand how to use them (theoretically, anyway), but they…

  • Can’t customize them for specific business rules or campaign goals
  • Aren’t getting results as advertised
  • (and my personal favorite) Just don’t trust them

These are all valid points if you’re relying on a black-box algorithmic portfolio model to handle your bid optimization in a vacuum. So the question becomes:  when it comes to bid optimization, are you book smart or street smart?

If you’re book smart, you can probably whiteboard visualization for how your bidding technology handles keyword clustering for optimization. You have every bid completely automated with multiple portfolios across millions of keywords organized thematically, geographically, and by device (well, for now – thanks, Google…). You haven’t touched a bid in years, and you trust your little black box because it contains a revenue-crunching bid-busting algorithm. And it’s smarter than you (right?). Wrong!

But if you’re street smart, you know that you possess two forms of logic that even the best algorithms never will: common sense and foresight.  You know that the best performing campaigns are optimized against marginal cost to marginal return modeling, but you also demand transparency of the decision science. So when your algorithm is recommending that you bid down a keyword based on its rank return profile, but you know that you’re about to launch a promotion against that particular category of products, you can opt out of its recommendation without jeopardizing the relative performance of the portfolio.

So is it better to be book smart or street smart? Duh – both, of course! You don’t need to write your own algorithms, but please do remember there’s no such thing as a silver bullet when it comes to SEM, and even the smartest algorithms require human intervention every once in a while.

So ask yourself (and your technology provider):

 “Do I have…?”

  1. Transparency (into keyword level bid optimizations)?
  2. Input (over what data set(s) the algorithm is incorporating into the model)?
  3. Control (over individual keyword bid optimizations within the portfolio)?

It’s a Small Mobile World, After All

I recently spoke at a retail conference on the topic of mobile. It’s a hot topic (as you well know) and drew a pretty decent crowd. I cracked a few jokes, presented several interesting stats, and even threw out some halfway decent advice for building a mobile strategy. (Safe) success. But looking over my presentation on the plane ride home, I noticed how much “recycled” material I had used. Sure, it was interesting – but was it novel? Groundbreaking? Innovative? No. My concepts were recycled – reinvented – from other ideas that came from other people.

But it got me thinking about innovation – great, big, life-changing, civilization-altering ideas. Where do they come from in a world and industry of recycled people and ideas? Cell phones – that was a big idea. In 1984, Rudy Krolopp introduced the first portable cell phone. It took ten years and more than $100 Million to develop, but this idearealized forever changed how, where, and when we communicate with one another. And with the introduction of smart phones – portable email, internet, apps (and who can forget Facebook), our means of interacting with one another would never be the same. My iPhone isn’t my cell phone. It’s my battery-charged, app-reliant life.

Both of these grand ideas came from very simple premises – I like to talk to my friends and family, surf the web and (occasionally) check my email and update my Facebook status, and I’d rather not be tethered to my home computer and phone to do that. Enter mobile communications. And it’s completely altered the way we live. We comparison-shop for items while standing in the store using QR codes and shopping aggregator sites. Anything we need is a query and click-to-call away. Yet while this innovation changed everything, I’m not convinced that marketers have been innovating to take full advantage. We seem to be stuck in a vicious cycle of recycling – opinions, ideas, and strategies. It’s time to innovate. And since I’m convinced that big ideas come from simple premises, here are some interesting mobile stats that I hope help to get the cogs turning and innovation brewing…

1. Lots of people have smart phones.

How many? 107 Million in the US. By 2015, analysts predict that mobile Internet usage will surpass desktop Internet usage and generate $1 Trillion in mobile transactions. Yet only 67% of Google’s largest advertisers have mobile optimized sites, and IgnitionOne reported only 14% of managed spend targeted mobile devices.

Your consumers are already interacting with your brand on their mobile devices- whether you’re ready or not. So be visible. Target, manage, and optimize your search, display, and email campaigns separately. Use analytics to truly understand how your customers are interacting with your brand by channel on mobile devices today (store locator, comparison shopping, rewards programs, etc) and give them the mobile experience they’re asking for. 80% of users will abandon your site if you don’t, and 52% will go directly to one of your competitors.

2. People who have smartphones use them. A lot.

96% of smartphone owners have researched a product from their device. 62% of people who have them perform daily searches. And even though not everyone uses a mobile wallet, retail apps like Shopkick, or shops regularly from their mobile device, they’re still taking action. In fact, 21% of users who have purchased online from their mobile device after searching for local information. But that’s not nearly as astounding as the fact that  10% of people who searched for local information on their phone did nothing. That’s a 90% conversion rate!

Going back to my first point, your consumers are already interacting with your brand from their mobile devices, and they’re taking action. Their actions can be monetized and attributed to the exposures that led them there. Are you making yourself accessible to them and their needs?

3. People don’t go anywhere without their smartphones.

I mean anywhere…I recently read a survey that revealed 40% of people would rather give up their toothbrush and their shoes for a week than give up their smartphone. 80% won’t leave their homes without them, and one in four people admit to taking them to the bathroom. Gross…

My point here is that we are never without our devices. As marketers, it’s imperative that you’re always aiming to be (the most) relevant answer to your consumer’s question. How does your consumer’s location, local weather, time of day and day of week make you more or less relevant? If I’m standing on the corner of 5th and Main street, and I search for “Chinese,” I’m not likely looking for information on China’s economy or culture. I’m probably looking for great Chinese Restaurant near me. And if they offer me a free wanton soup, click-to-call for reservations, and are known for the best Kung Pao Chicken in the city, it’s an easy decision. Leverage creative copy, site links, geotargeting, and aggressive bidding strategies to be the most visible and relevant answer to your customer’s question at the exact moment they’re asking.

Want to be a mobile innovator? Just remember to start at the most obvious place – your mobile customers. Recycling mobile strategies doesn’t work, because your mobile strategy should be as unique as your customers (and completely centered around them).