Bid Rules: Teaching an Old Dog New Tricks

By Todd Silverstein, Program Manager

The prevailing school of thought is that bid rules are merely a way to “manage the long tail,” or assist in the management of large, keyword-intensive paid search accounts that would otherwise demand too much time, re: setting and resetting keyword-level max bids.

While those are two good uses of bid rules, there remains a significant amount of untapped potential in terms of increasing revenue and efficiency—especially in direct response campaigns.

By following the traditional guidelines for bid rule application—make them engine specific, use as large a sampling of data as possible—and focusing on only one campaign at a time, huge lifts in ROAS (Return On Ad Spend) can be achieved almost instantaneously.

Most importantly, though, don’t be afraid to dramatically increase the number of categories you create. Gone are the days of High, Medium and Low Return. Depending upon your ROAS goal, the number of keywords with revenue data and the median ROAS, your number of categories could soar well into the double digits.

The key is to set your ROAS (or ERS -- Effective Revenue Share -- in DART speak) bid rules extremely tight. If the top keyword in your category is near a 50% ERS (and driving to a 50% ERS), the bottom keyword’s ERS should be no lower than 99.99%. This will preclude positions from being pushed too high on bleeder keywords, while still allowing for ambitious bid hikes on other, more efficient keywords.

In addition, when you revisit the performance of your bid-ruled keywords in relation to their chosen category (preferably after a month’s time), you will find yourself better equipped to reassign keywords that are reaching or exceeding their return goals to higher echelons (while doing the opposite for underperforming keywords). This type of honed monthly maintenance can easily lead to ROAS increases as impressive as those achieved from the initial bid rule application.

In terms of results, your campaign-specific, uber-tiered ROAS bid rules will work to a varying degree. While I’ve seen ROAS nearly triple in one week’s time, I’ve also seen it increase slowly but steadily over the course of several weeks/months.

If you’re looking for a good place to start with this approach, identify campaigns with a good amount of high spending keywords and/or highly efficient keywords languishing in lower positions (3 or below). These campaigns will invariably have the most potential for immediate lift, not to mention highly impressed clients and the admiration of search marketing groupies the world over.


Copyright © 2008 Resolution Media, Inc. All rights reserved.