DM News: The Direct Marketer's Essential Guide to Search Engine Marketing
Automated Bid Management Tools Remove Cap on Lids.com Efforts By Fredrick Marckini
July 25, 2005
To meet your paid search
advertising goals, you
must find a way to
overcome time as a limiting factor.
Because there are numerous
“levers” that require frequent
adjustment within the paid
search auction of every keyword,
it typically isn’t long before the
volume of keywords on which
you bid, and the price competition
that you face, turns the
manual management of your
campaign into a full-time job.
And unless you are manually
raising and lowering bids
continuously 24/7 and 365
days a year in response to the
dynamics of each and every
keyword auction in which you
are participating, money is
being thrown out the window.
This was the case in early
2004 with the paid search
campaign of Lids.com, the
online sales channel for the
550-location Hatworld chain
of retail stores. But by the end
of 2004, the number of
monthly orders generated by
Lids.com’s paid
search campaign
had doubled,
cost per order
had dropped 60
percent and
return on advertising spend
had increased more than 150
percent. Plus, the company’s
executives weren’t spending a
minute longer managing their
campaign than they had been
months earlier.
Lids.com achieved these
results by replacing manual
management of its campaign
with management via an
objective-based, automated
bidding agent.
The first time
constraint the
company faced
was raising and
lowering bids
on all of the
keywords
used to
describe the
7,500 products
sold on the
site. When
managing
the campaign
manually,
Lids.com was able to manage
only 500 keywords and had
time to do it only in the Google
AdWords program.
But when its list of keywords
and past campaign data
were loaded into the bidding
agent, the tool took over the
entire bidding process for
Lids.com, letting the brand
expand its campaign to more
than 13,000 keywords. It also
let Lids.com participate in
Yahoo Search Marketing’s
paid search program as well.
That’s going from 500 keyword
auctions to more than
26,000 with no additional
staff time required.
The automated bidding
agent also cut by 80 percent
the time it took for Lids.com
to bid profitably on its 12,500
new keywords by employing a
technique called “keyword
bidding imputation.”
The tool did this by comparing
keywords for which it
had past performance data to
linguistically similar keywords
within its set of new keywords.
It then assumed that the new
keywords would perform
much like their linguistically
similar counterparts and
immediately began bidding on
them accordingly.
Like Lids.com, many marketers
are reaching the point in
their manually managed campaigns
where time will begin
to limit their size, scope and
effectiveness. Today’s automated
bid management agents
provide an important tool for
making the component of
time less of a limitation.
