From Manual to Algorithmic: Decoding the Secrets of Bid Management Systems

1. Rules-based Bid Management System

Rules-based bid management is a type of bid management system that uses a set of pre-defined rules to determine how much to bid on each keyword. These rules can be based on factors such as the keyword’s search volume, competition, and your budget.

Imagine, you could create a rule that says “Bid $1 on keywords with a search volume of 100,000 and a competition level of 2.” This rule would ensure that you are always bidding the same amount on these keywords, regardless of how much other advertisers are bidding on them. Rules-based bid management is the simplest type of bid management system to set up and use. However, it can also be the least effective. This is because rules-based systems cannot take into account the real-time performance of your campaigns.

For example, if a keyword’s search volume suddenly increases, a rules-based system will not automatically increase your bid on that keyword. This could mean that you are missing out on potential clicks and conversions. If you are using a rules-based bid management system, it is important to regularly review your rules and make sure that they are still accurate. You should also be prepared to adjust your rules as your campaigns evolve.

How Rules-Based Bid Management Works:

1. • Define your rules: The first step is to define your rules. This involves deciding what factors you want to base your bids on, such as search volume, competition, and your budget.

1. • Set your bid amounts: Once you have defined your rules, you need to set your bid amounts. This involves deciding how much you are willing to bid on each keyword.

1. • Monitor your performance: Once you have set your rules and bid amounts, you need to monitor your performance. This involves tracking your clicks, conversions, and cost per click (CPC).

1. • Make adjustments: If your performance is not meeting your goals, you need to make adjustments to your rules and bid amounts. This may involve increasing your bids on keywords that are performing well or decreasing your bids on keywords that are not performing well.

Advantages:

• • Simple to set up and use: Rules-based bid management systems are the simplest type of bid management system to set up and use. This makes them a good option for businesses that are new to SEM or that do not have a lot of time to manage their bids manually.

• • Cost-effective: Rules-based bid management systems are typically less expensive than other types of bid management systems. This makes them a good option for businesses with a limited budget.

Disadvantages:

• • Not as effective as other types of bid management: Rules-based bid management systems are not as effective as other types of bid management systems, such as position-based or portfolio-based bid management systems. This is because rules-based systems cannot take into account the real-time performance of your campaigns.

• • Can be inflexible: Rules-based bid management systems can be inflexible. This means that you may not be able to adjust your bids as quickly as you need to in order to respond to changes in the market.

2. Position-Based Bid Management System

Position-based bid management is a type of bid management system that aims to get your ads to show at a specific position on the search results page (SERP). These systems use a variety of factors to determine the optimal bid for each keyword, such as the keyword’s search volume, competition, and your budget.

For example, you could set a target position of “1” for the keyword “cheap shoes.” This would tell the position-based bid management system to bid as much as necessary to get your ad to show at the top of the SERP for that keyword.

Position-based bid management systems can be more effective at getting your ads to show at the top of the SERP, but they can also be more expensive. This is because you will need to bid higher in order to get your ad to show at the top.

How Position-Based Bid Management System Works:

1. 1. Define your target positions: The first step is to define your target positions. This involves deciding what position you want your ads to show on the SERP for each keyword.

1. • Set your bid amounts: Once you have defined your target positions, you need to set your bid amounts. This involves deciding how much you are willing to bid on each keyword in order to achieve your target positions.

1. • Monitor your performance: Once you have set your target positions and bid amounts, you need to monitor your performance. This involves tracking your clicks, conversions, and cost per click (CPC).

1. • Make adjustments: If your performance is not meeting your goals, you need to make adjustments to your target positions and bid amounts. This may involve increasing your bids on keywords that are performing well or decreasing your bids on keywords that are not performing well.

Advantages:

• • Can get your ads to show at the top of the SERP: Position-based bid management systems can help you to get your ads to show at the top of the SERP, which can increase your click-through rate (CTR) and conversions.

• • More control over your ad positions: Position-based bid management systems give you more control over your ad positions, which can help you to achieve your marketing goals.

Disadvantages:

• • Can be more expensive: Position-based bid management systems can be more expensive than other types of bid management systems, such as rules-based bid management systems.

• • Can be more complex: Position-based bid management systems can be more complex to set up and use than other types of bid management systems.

3. Portfolio-Based Bid Management System

Portfolio-based bid management is a type of bid management system that takes a more holistic approach to bid management. These systems consider the performance of your entire SEM campaign when determining how much to bid on each keyword. This can help you to improve the overall performance of your campaign, even if some individual keywords are not performing as well as others.

For example, you could set a goal of getting 100 clicks per day for your SEM campaign. The portfolio-based bid management system would then adjust your bids on individual keywords in order to achieve this goal.

Portfolio-based bid management systems can be the most effective, but they can also be the most complex to set up and use. This is because you need to have a good understanding of your SEM campaign in order to use them effectively.

How Portfolio-Based Bid Management System Works:

1. • Define your goals: The first step is to define your goals. This involves deciding what you want to achieve with your SEM campaign, such as increasing brand awareness, generating leads, or driving sales.

1. • Analyze your performance: Once you have defined your goals, you need to analyze your performance. This involves tracking your clicks, conversions, and cost per click (CPC).

1. 1. Set your bids: Once you have analyzed your performance, you need to set your bids. This involves deciding how much you are willing to bid on each keyword in order to achieve your goals.

1. • Monitor your performance: Once you have set your bids, you need to monitor your performance. This involves tracking your clicks, conversions, and CPC.

1. • Make adjustments: If your performance is not meeting your goals, you need to make adjustments to your bids. This may involve increasing your bids on keywords that are performing well or decreasing your bids on keywords that are not performing well.

Advantages:

• • Can improve the overall performance of your SEM campaign: Portfolio-based bid management systems can help you to improve the overall performance of your SEM campaign by taking into account the performance of all of your keywords.

• • More control over your budget: Portfolio-based bid management systems give you more control over your budget, which can help you to stay on track.

Disadvantages:

• • Can be more expensive: Portfolio-based bid management systems can be more expensive than other types of bid management systems.

• • Can be more complex: Portfolio-based bid management systems can be more complex to set up and use than other types of bid management systems.

The best type of bid management system for your business will depend on your specific needs and goals. If you are just starting out with SEM, a rules-based bid management system may be a good option. If you are more experienced with SEM and you want to improve the performance of your campaigns, a position-based or portfolio-based bid management system may be a better choice.

Here are some additional tips for choosing a bid management system:

• • Consider your budget: Bid management systems can range in price from a few hundred dollars per month to several thousand dollars per month. Choose a system that fits your budget and your needs.

• • Think about your goals: What do you want to achieve with your SEM campaigns? Do you want to increase brand awareness, generate leads, or drive sales? Choose a bid management system that can help you to achieve your goals.

• • Do your research: There are many different bid management systems on the market. Do some research to compare features, pricing, and customer support before you make a decision.

With a little research, you can choose the right bid management system for your business and improve the performance of your SEM campaigns.

Conclusion

In summary, rule-based bid management systems offer advertisers a balance between manual control and automation, enabling them to optimize bids based on specific performance metrics and goals. While it may not be as dynamic as algorithmic bid management, rule-based systems provide advertisers with valuable customization options to achieve their advertising objectives effectively.