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PPC Bidding Software

An essential component of sponsored search or pay-per-click (PPC) ads is keyword bidding, in which you bid on keywords to determine the placement of your ad on the search result page.

The bid price varies depending on the popularity of the keyword, the quality of the keyword and your ad, the value of opportunity the keyword represents, and the position of the ad after the keyword is searched. Popular keywords require higher bids to secure a good ranking, as the top position goes to the highest keyword bidder. The sponsor of the ad pays the search engine click cost that is within bid price only when the ad is clicked, hence the name ‘pay-per-click.’

Ever since search engine vendors adopted keyword auctions for ad ranking, it has been a daunting task for marketers to determine a bid amount that will optimize returns. However, you can increase your PPC advertising returns by choosing the right strategy for your campaign. Here are some common bidding strategies offered by PPC software.

1.      Rank Driven

Eye tracking research has shown that the higher the ad rank, the more people will view the ad. Increased exposure translates into increased click-through and conversion rates. A rank driven strategy is effective but can be expensive if your object is to rank near the top of every search. It is generally used by corporations with the budget and desire to maintain a strong brand. Whatever your business, it may make sense to employ a rank driven strategy for just a few important keywords; otherwise it can cost more than it is worth to maintain a target rank.

 Since major search engines do not provide specific bid price data, PPC software vendors must either estimate it by scrapping real time rankings from the search results page or calculate it by using the average daily ranking report provided by the search engine vendor. Since scrapping the search results is prohibited by search engines, software vendors have to hide their identities. Alternatively, average daily ranking reports can be used to make mathematical bid adjustments until the ad approaches or reaches target ranking.

Vendors: BidMaximizer, ClickSweeper

2.      Conversion driven

If your advertising goal is to generate leads or sales and your search engine campaigns track conversion rates, keyword bid price can be optimized by tracking cost per conversion, or cost of acquisition. Some PPC software can define a target goal or let the advertiser determine a target goal based on his business profit margin. Keywords that meet the goal are rewarded with higher bid prices, and keywords that do not meet it are penalized with lower bid prices. Over time, poorly performing keywords will spend less of your budget and successful keywords will spend more.

Vendors: SearchIgnite, DoubleClick, Atlas One, ClickSweeper, Adapt SEM

3.      ROI(ROAS) Based Bidding

When keyword performance is tracked by sales revenue or weighted conversion value, ROI based bidding is more effective than other types of bidding.  In pay-per-click advertising, a commonly used performance indicator is ROAS (return on ad spending). Returns can be either revenue total or weighted conversion total; ad spending refers to keyword spending. Once a target advertising goal is defined by the ROAS percentage, keyword bidding rewards or penalizes keyword bid prices based on a review of the ROI performance.

Vendors: SearchIgnite, DoubleClick, Atlas One, ClickSweeper, Adapt SEM

4.      Campaign Budget Based

In a campaign budget based strategy, PPC software treats your campaign budget as a scarce resource and finds ways to optimize ad spending. In general, more clicks within a campaign result in more page views and higher conversion rates. Thus, the key to budget based bidding is to optimize spending by preventing overbidding and lowering costs per click. 

 Vendors: Google, ClickSweeper, SearchIgnite

5.      Portfolio Driven

A portfolio driven strategy optimizes account and campaign spending to achieve your business goal by forecasting keyword performance and optimizing keyword bids. As the name suggests, it compares the process of managing keyword bidding to the process of managing investment fund with selected stocks: both processes seek to maximize the return of investment.      

Vendors: Efficient Frontier

6.      Rule Based

The purpose of rule based bidding is to provide more control to the advertiser in defining how advertising budget is spent.  It can be thought of as multiple “if…then” statements with performance criteria as the subject.  For example, if cost of conversion is the subject matter, then the action can be to penalize speed or promotion rate.  

Vendors: Atlas One, SearchRev



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