Bid optimization series: Meeting your objectives with flexible bid goals

Thursday, November 29, 2012 |

Last week, we kicked off our bid optimization blog post series by inviting you to a ClickZ webinar on how to choose the right bid optimization tool to drive paid search results for your business. Today, we’ll continue the conversation by tackling the first of seven questions you should ask when choosing a bid optimization platform for your business:

Question 1: Can I state my goals to match how my business really works?

We believe that effective search campaigns start with a clearly-defined advertiser goal. A clear definition of your goal affects every aspect of your campaign. For example, on DoubleClick Search, it influences the signals that are evaluated by our bid optimization system, the data analysis we perform, and ultimately, the results you get from the bid optimization system. As such, poorly-defined goals can mean missed opportunities and lackluster results.  

The figure below illustrates how a marketer’s goal plays a critical role in influencing every step of the bid optimization process:

That’s why the flexibility to express individual campaign goals is so important -- it helps ensure that all bids work toward and maximize business results that matter to you. So when choosing a bid optimization platform, look for one that’s comprehensive in the goals it supports, offering the option to express basic goals, as well as combine goals, and to optimize against unique business data.

You may find that most tools offer a way of defining a set of basic campaign goals:

  • Position - the ad position (rank) you want to achieve on the page, expressed as a whole number (1), a range of numbers (1-3), a decimal (2.5), or any combination.
  • Cost Per Action (CPA) - The average cost per action, where action can be a conversion, sale, signup, or other marketer-defined event.
  • Effective Revenue Share (ERS) - the total cost of a campaign divided by the total revenue generated by that campaign, expressed as a percentage
  • Return on Ad Spend (ROAS) - The total revenue generated by an SEM campaign divided by the cost, expressed as a percentage
  • Spend (Budget) - A precise monthly budget to spend while maximizing results on a specific metric (clicks, impressions, conversions, or other)

However, every campaign has unique objectives, and it’s likely you want flexibility beyond the basics. You may need a way of expressing a combination of goals, based on your unique objectives. To achieve this, look for a solution that offers the flexibility to express bidding goals in a rich language. For example, can you set a CPA goal while still maintaining a top position? Can you achieve a target position while staying within a specified budget?  Does the platform support full flexibility to express a unique goal for each different type of conversion -- setting more aggressive goals for those conversion types you value more? Can the tool also optimize off your unique business data, including offline conversions or website data?

These are the types of considerations that inform our investments in the DoubleClick Search Performance Bidding Suite, where we wanted to put advertiser goals at the center of the bid optimization process. So whether you have a goal that’s based on a CPA, revenue, return on ad spend, budget, or a combination of these, the Performance Bidding Suite lets you easily define and optimize to your precise business objectives, and express a unique bid goal for every conversion type. In addition, the Performance Bidding Suite offers the option to integrate offline data, and have this data expressed in bid decisions to ensure that the entirety of your business is usable for bid optimization consideration.

Of course, defining the goal is just the first step. Once it’s been set, what kind of data does the bid optimization tool analyze to make bid decisions? Next week, we’ll take a closer look at the second question to consider when choosing a bid optimization platform: How fresh is the data that’s used in making bid decisions?

To learn more about the 7 factors to consider, download our white paper here.