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BID MANAGEMENT SOFTWARE: AN EXERCISE IN FAILURE!

Paul Carpenter 13th June 2008

Jargon:

Getting the most out of your PPC campaign can be a real drag. Some days figures look great, others can see a sometimes baffling drop in sales. the trick is, of course, to aggregate the figures over time and look for trends. Over recent years, lots of software has come onto the market that can automate huge aspects of this on your behalf. If you've got a campaign with thousands of keywords and dozens of Ad Groups, the appeal is immediate and obvious. But - you're expecting some caveats, so let's look at them!

Setting the right targets

Our client has been using another agency for PPC for some time. They sell a product which makes a lifetime profit of around £14 for the company per unit sold. This made the target for the PPC campaign fairly easy: get the cost per sale down below that figure to make sure that every sale was profitable.

And guess what - the software worked! Each day, and using data aggregated over several months, the software would look at the cost of the campaign and the number of sales it had generated. If the cost per acquisition was higher than the target, it would tweak the bidding downwards and increase the profitability of the campaign overall.

Over the last 3 months, this software drove the CPA down from £14 to under £12 - pretty impressive, eh?

Actually, no.

Enter The Hero

[*Cough cough* - Immodesty Ed.]

Despite the improvements, our client asked if I could have an informal look at the account. Within 3 days, I'd cut the CPA to under a fiver!!!

Like a lot of software, bid management software can be a blunt tool if it isn't combined with a little human intervention. I looked at their campaigns with 4 or 5 months of data and could see immediately that 80% of the campaigns had never resulted in a single sale.

So the 'average' CPA was massively skewed by the performance of a small number of Ad Groups that were actually converting at a reasonable rate. In addition, a look inside these ad groups revealed that about 80% of the keywords were wasted money as well.

Hit the pause button, lower a few bids and hey presto - a *much* more profitable campaign. It's true that there has been a loss of volume, but actual revenues in terms of profit are higher than they were (helped along by the fact that the agency were sacked, meaning a considerable saving in fees!)

The software was doing half a job. If the agency had been on the ball months ago, a few short hours of eyeballing the account would have revealed the same weaknesses that I identified, the client could have made a lot more money, and the agency would still have their account.

Todays' Moral

Bid management software can be a powerful ally - especially if you have huge budgets to manage and clearly defined parameters for success. But, like anything, it can benefit hugely from a little human contact. Sometimes, science has to bow to art - even where figures are involved.