Google has implemented a lot of machine learning features into its bidding platform in recent years. You can create campaigns in Google Ads and they will optimize almost everything for you.
Smart Bidding optimizes your bids to maximize conversions, tapping into Google’s vast tank of signals—including user search query, browser, and language settings; location; and a user’s historical behavior to predict the likelihood of a conversion. From there, Smart Bidding increases your bids when a conversion appears more likely.
But what else can be done to help optimize with Smart Bidding?
Marketing needs to be data-driven to be effective so consider your data integration. There’s a lot of data you can generate in today’s world, and the data you’re pulling will be the core of a successful strategy.
If you know your target user’s behavior, goals, pain points, and challenges, you can develop marketing campaigns that cater to their needs. Some of the data you could be collecting might include:
- Email marketing
- Blog and content creation
- Web analytics
- Social media data
- Lead generation
- In-store sales
Marketing analytics and data are playing a larger and larger role in strategizing your business going forward. The more insight you have, the better, more strategic decisions you can make. Which begs the question: are you incorporating all the data you have available?
Once you have the right data integrated, it’s important to assess your KPIs, or choose what to measure. You should always measure quantifiable metrics that align with your company’s goals.
We often see brands optimizing to a CPA. However, this approach is far from ideal if you have different margins for groups or categories of products, and doesn’t follow the logic that “not all orders are created equal.” It’s always good to occasionally review KPIs—you can often realize huge gains by adjusting to a more granular KPI.
Now how you can improve performance with signals that matter to your business?
Custom modifiers that are aligned to business needs
Using Smart Bidding means relinquishing control across different market segments to what Google interprets as the most likely to convert. That’s fine by itself, but an advertiser will commonly know more about their business than what’s reflected in historical online conversion metrics.
Still, there are many unique factors that impact you as an individual advertiser that publishers aren’t aware of, such as seasonality, ratings, new product launches, coverage in the media, or social media buzz. Incorporating extraneous or contextual data into bid optimization can help you gain a competitive advantage and understand consumer intent—resulting in more sales.
To give you an idea of how online KPIs can sometimes not match the real world, imagine a car rental company. If a particular location has very little inventory left, it might be worth considering bidding down, since a high percentage of traffic wouldn’t be able to rent.
Similarly, if a location has excess inventory, consider bidding up!
Modifiers can also be very useful to help handle promotional adjustments. Many brands have a calendar of sales or promotions, and while some of these happen at the same time every year, it’s likely that many are ad hoc, occur for different product lines, and happen for varying lengths of time each year.
Since all bidding engines leverage historical data, there will always be a delay from when a promotion begins to when bids are adjusted. Therefore, it’s important to modify your bid on the day the sale begins to capitalize, and likewise when a sale is over and conversions get back to ‘business as usual’—applying a negative modifier helps prevent overspending on bids while the bidding engine adjusts.
Once you’ve covered the basics and started to apply adjustments for your specific business data, another challenge that many brands face is optimizing to multiple stages of a conversion funnel.
However, if you have a long latency period from initial lead to final purchase, this limits how reactive bidding can be to current conditions, especially if you change targets. While it’s best practice to remove the days of latency from bidding decisions to make sure you’re using accurate data, it’s important to remember that it’s not current data.
So…what is the best bid strategy to optimize to downstream revenue in the bid calculation?
In the above example, we have a number of users who see an ad for a performance marketer. Some of the users will click the ad and decide it’s not a good fit for them, others will register, others will continue to pay for a trial after being contacted, and finally even fewer will decide to buy the full product.
Say one keyword creates lots of leads, and therefore an accurate bid optimizing to leads equates to $5.
The second keyword creates far less leads, so a bid calculation for this keyword equates to $1.50.
However, the first keyword results in less revenue from all those leads than the other keyword, and therefore a second bid run would need to calculate the adjustment needed.
The first keyword is adjusted -50% to create a final bid of $2.50. The second keyword, which creates more revenue overall and far more revenue per lead, is adjusted by +500% to give a final bid of $7.50.
How you allocate the budget
These days, a data-driven marketer has to answer many budgeting questions. Where should I invest my next dollar? Am I going to hit my revenue goals? Will I spend my entire budget? Plus, today’s online customer journey isn’t as simple as it used to be.
Consumers switch between channels (and devices) more often, from inspiration and product discovery to more focused product research and comparison, and finally till the sale.
The question is always how and where to spend your budget? It is important to note that leveraging predictive models to correctly allocate budgets across different campaigns and channels can help drive overall uplift.
Using historical performance, we can put the budget across search and social to achieve the best results per the customer’s business objectives.
This kind of financial modeling can be applied on top of your bid strategies to have a continuous view of investment opportunities and high-potential returns.
Leveraging technology for better automation
Let’s finally talk about technology.
To recap the above: while Smart Bidding does offer a quick answer to some common PPC challenges, Google’s broad data doesn’t necessarily reflect your unique target audiences..
Smart Bidding gives you no visibility or control over the data being used, which means an advertiser has no access to the complete bid history of any keyword or any individual auction. If you are looking to analyze granular performance, the possibilities with Google are limited.
To truly maximize your campaign performance, you need to take control of your own bids and the data being used to optimize them in an automated fashion.
eCPC is a smart bidding strategy that allows you to continue to place the base bid outside of Google, while still allowing Google to make the ‘Auction Side Adjustments’ based on the data they hold. This is the “best of both worlds” and allows you to capitalize on some of the strategies, without giving up Smart Bidding as your automated bidding solution.
By using this hybrid approach, we can help you work with Google to get an edge over your competitors.
There are a few areas you can work on to ensure you get a higher conversion rate:
- You fundamentally need accurate data, correct KPIs, and data driven targets
- Align your online KPIs to business needs by leveraging custom modifiers
- Consider a full-funnel bid strategy if you have a multi-conversion funnel to optimize what matters most, while reacting to auction or real-world conditions
- Knowing the value of all your marketing activity across campaigns and channels to maximize the return and drive incremental lift, with great budget allocation
- And finally, using technology that can help you implement and automate these strategies
Contact Sharon Herrnstein, Chief Marketing Officer at email@example.com today for a FREE and no obligation consultation call. We can help ensure your investment in marketing truly supports your organization’s goals whatever platform you’re working with.
Sources: Marin Software | WSI World | Google