Bid optimization series: Keeping up with fresh algorithms

Thursday, January 17, 2013 |

Topics we’ve discussed so far in our bid optimization series -- data recency, smarts, and speed -- are all directly affected by a bid management platform's algorithms, or the software programs that allow the tool to analyze and make decisions based on external signals. Algorithms, then, sit at the crux of a bid tool’s success in achieving a marketer’s goals. And because the search space continues to change quickly, it’s important for the algorithms to keep up. Today, we’re taking a closer look at the importance of continually-evolving algorithms, exploring the fifth question to ask when choosing a bid optimization platform:

5. How often do you refine your algorithms?

It’s no doubt that finely-tuned and frequently updated algorithms can make or break search campaign results. After all, amidst the dynamic search landscape, they can quickly become outdated and irrelevant if they’re neglected. Therefore, it’s important to assess the robustness of your bid optimization platform’s technology by asking your Services or Product teams about how often you can expect the bid algorithms to be refined and tweaked.

Ask to see how frequently updates to your platforms bidding algorithms are made to address the following:

Frequency of data refreshes, to access more current data for bid decisions

Bidding frequency, to allow for more relevant bids during high-volume periods
Smarter keyword bundling, to improve the handling of low-volume keywords

However, the ultimate measure of a good algorithm is the campaign performance it delivers. To make sure you’re getting the best results, ask for concrete data on whether campaign performance is improved by the platform’s bid optimization, and inquire whether recent updates to algorithms generated any better results for clients.

At DoubleClick search, we maintain a rapid pace of innovation that comes from our world-class engineering teams with years of bid optimization and online auction experience. The sophisticated algorithms at the heart of the DoubleClick Search Performance Bidding Suite are tested and updated approximately every six weeks to keep the platform on the leading edge of the industry, and to deliver search marketers the best possible results. In fact, we’ve seen that 88% of campaigns who have used our bid optimization have seen better campaign performance, with over half of them doubling their conversions at half the CPA (1).

It’s important to note that algorithmic updates can be difficult to evaluate without having a clear way of testing and observing the real business impact delivered from them. That’s why full transparency and control is a must when measuring the effectiveness of a bid optimization tool, allowing marketers the ability to monitor progress and introduce new inputs as needed. So, when evaluating a bidding platform, ask these questions, and for data to back them up. Next week, we’ll turn our attention to the importance of transparency and control when we answer the sixth question to consider when choosing a bid optimization platform: How much control will I have?

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

1. Google internal data