Thursday, December 01, 2005

If You Hear Something Ten Times, It Must Be True

This morning as I spoke with a search affiliate arbitrageur who spends $1M+/mo on Google & Yahoo, I heard something I've heard at least ten times now:

Arbitrageur: Chris, I know Efficient Frontier has a great solution for improving performance of PPC campaigns, but what we really have our mind set on is finding a good self-service bid management tool.

Chris: I can't fault you for wanting to continue to manage your campaigns in-house, but the reality is we both know that there *aren't* any self-service bid management tools that will set you apart from your competition. So until that product comes along (note: I can give you several reasons why that'll never happen BTW), give up tactical control over your PPC campaigns to us in order to get the strategic control of knowing you're getting the most ROI possible from your campaign, and certainly much more than your competition.

I'm as biased as they come, but for good reason - all self-service bid management tools suffer from the same problems:

1)They don't automate much of the work the SEM staffer has to do
2)They tend to work horribly, if at all, on Google. Google's 60-70% of the market, so that's bad
3)They are only as capable of providing lift as the user is in doing gargantuan amounts of ROI calculations. I'm no math expert, but I know that if you have 1000 keywords with 5 bid positions of meaningful volume, that's 5 to the 1000th power calculations you have to do to be aware of all yield scenarios for that keyword.

2 Comments:

Blogger NewRo said...

Chris -

A question for you. I see your point on the multiple bids you have to worry about when you have 1000 terms. But I'm finding that of those 1000 terms, only about 20 have any serious volume. Probably 90% of my volume.

People say the tail is important, and I believe it, but couldn't I regularly manage those 20 terms on my own?

9:54 PM

 
Blogger searchquant said...

Newro -

The low-volume terms each may have low volume, but if their individual low-volume adds up to good volume, then managing the tail well matters.

Sometimes we see clients who have been getting nothing from the tail, but it turns out they never explosed those terms to enough traffic to learn about their performance characteristics. We always recommend spending a certain percent of the budget on fully learning how the tail performs. This was the case with at least half of our client base: applying math to the tail and testing higher max CPC's on the tail paid off in the form of more volume or more margin depending on the case.

7:01 AM

 

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