How the profit driven marketer bids to win

November 2015

Customer journeys are ever-changing. Driven by convenience, consumers use the device that's closest to hand anytime, anywhere. Each month they're performing billions of searches, watching billions of hours of video content and interacting billions of times with mobile apps. In this context, they still expect information to be relevant to their intent, device, interest and location.

As a profit driven marketer, once you've developed an understanding of the different segments of your target audience, it's important to use that knowledge to inform marketing decisions across platforms. For platforms such as search, where an auction determines what ad is shown, advertisers need to be more savvy about when they bid and how much they bid.

After you've segmented your customers and have pinpointed your top segment, you'll have a fixed idea of how valuable or profitable these customers may be. When it comes to establishing how much you want to bid for this segment, the next step is to consider the context of each auction according to five factors:

  • Device: What device is the user browsing on? Do you want to influence consideration on mobile or drive sales on desktop?
  • Interest: Is their search or the site they are visiting related to the product or service you're offering?
  • Time: Are they browsing at a time when you can respond to their request?
  • Location: Are they searching from a location near your store?
  • Intent: This is the most difficult piece of context to figure out. Is the customer researching, browsing or ready to purchase?

Cross-reference these considerations about the consumer's context with your own context:

  • How valuable is the segment you're targeting?
  • What is your end goal or marketing objective?
  • Are you looking for brand growth through visibility and clicks or performance through sales and profits?
  • Are you constrained in budget?
  • Do you need to stick to a certain ROI?

All these considerations will help you know how much to bid up or bid down. But let's be honest _ that's a lot of data to digest and act upon manually. A BCG study recently showed that 80% of digital marketers' time is spent on manual tasks such as bidding, while only 20% is spent on strategy. For many advertisers, automation offers a way to alleviate this strain on marketing resource. Automation uses information about both the user's and advertiser's context, along with signals including the user's operating system, language and browser, to determine things like which creative you should be serving and how much you should be bidding. What's more, all of this happens in real time.

Automation tools often look at the history of existing activity to predict conversion rates or values based on all the available signals. They then set specific bids for every auction. For example, when you're bidding on the Google Display Network, automated bid capabilities extend to consider frequency and recency of visits.

If you're considering using automated bidding, before applying this approach to everything, it's worth testing Google's automated bid strategies:


Start by choosing an account, campaign or ad group with a large volume of historic sales or revenue. Allow at least six weeks in total for a control period, a learning period, and a testing period. Consider the length of the sales cycle in your business; if six weeks is too short, then extend the test. Finally, ensure that you don't make any changes during the test period.

Ea190 is one advertiser that ran such a test. The company used the target cost per acquisition bid strategy to drive incremental registrations. In the UK, this drove 145% more conversions in the first 20 days, while maintaining average cost per acquisition. is now planning to expand this bidding solution to all European markets.

From the outset, be clear about the metrics you want to affect, such as revenue or profits. For instance, if at the end of the test you've increased sales but decreased profits, you know the strategy you've tested isn't the right one for you. In this situation, you could either tweak some of the test parameters (for example decrease the target CPA slightly to see if sales remain the same while profits increase), or try another bid strategy (for example switching from target CPA to enhanced CPC). On the other hand, when you see success in the metrics that matter, you know you're onto a winning approach.

Applying the right bidding strategy to your customer segments can maximise your efficiency and success. To learn more about Google's automated bidding strategies, visit the AdWords Help Center.

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