Enterprise bid management solutions are complex, expensive and potentially offer time-saving automation. But what are bid management tools’ potential effects on the future? Is this type of automation a threat to marketers?
Working in SEM, particularly enterprise-scale SEM, you’ve heard about enterprise bid management solutions. These wondrous software platforms will seemingly automate several aspects of what you do. But for some marketers, this seems like cause for concern. What is a bid management platform going to mean for you? Will it save time and operational efforts, or will it automate you out of your job?
The answer is no. The best enterprise bid management platforms are not going to automate you out of a job, but they are positioned to save you time and hassle while you use the extra breathing room and time savings to focus on creativity and strategy. How do we know this? Because smart automation tackles digital marketing’s big data challenge.
What’s the big data challenge?
Let’s step back from automation, PPC bid management software and all those question marks and discuss digital marketing as a whole. There’s something that’s increasing in your day-to-day SEM operations. It’s data, from your stats on clickthrough rates, conversion rates and bid levels (among other things). For the sake of example, let’s consider how many data points we’d need to track just for important bid modifiers such as location, time of day, and the all-important device (particularly mobile):
210 designated market areas in the US x 7 days x 24 hours x 3 devices (mobile/desktop/tablet) = 105,840 SEM data points
Now, multiply this figure times however many thousands, or millions, of keywords you manage. It’s more than anyone can feasibly, and should reasonably, be expected to manage manually. Corporate data production is expected to increase 4300% by 2020. That’s a gigantic number, but considering the enormous amount of data you wrangle every day, I’m sure you see how this seemingly ridiculous figure may not be so ridiculous after all.
Unfortunately, data overload has other, more significant consequences. In the face of too much data, many professional marketing teams still rely on guesswork or gut feelings to make their marketing and budgetary decisions, or they make improper use of the data they have available. This approach has a price.Specifically, mismanaged data is expected to cost businesses $3.3 trillion by 2020.
That’s another huge figure. Where does it come from?
Inefficiencies in SEM
Think about it – you know that bidding for each individual keyword in your portfolio could probably be optimized better. You may even be managing some of your most important head terms manually and getting better performance from them. But giving the same treatment to the thousands (or again, millions) of keywords in your campaigns? It’s too much for anyone to manage manually. And here’s what it costs.
QuanticMind analyzed more than $200M in ad spend deployed across 300 million keywords in the US over 12 months, and found significant wasted spend across multiple bidding dimensions for companies that aren’t using their marketing data to optimize their bidding:
- 17.1% wasted spend by state
- 18.6% wasted spend by city
- 6.6% wasted spend by day of week/time of day
- 9.1% wasted spend by device
Businesses that attempt to manually manage their SEM bidding, or are employing enterprise bid management solutions that can’t handle the millions of data points tied to every single click on their ads, waste enormous amounts of their budget, overbidding on lower-traffic keywords that already delivered their maximum conversions, or underbidding on higher-traffic keywords that could have delivered so much more value.
But how can businesses avoid wasting these huge amounts of spend while actually managing their data properly?
Enterprise bid management solutions that actually use your data
This is where the next generation of enterprise bid management solutions comes into play. Solutions that use intelligent new technology to crack the code of big data for marketing and translate it into actionable insights that help advertisers like you make more-profitable decisions every day. Before you begin your bid management tools comparison shopping, consider the importance of the following:
- Data science – Data science is the academic subject of deciphering enormous pools of data and extracting useful insights. With a data science-powered solution, your days of data overload will finally come to a close as software does what it’s supposed to do: make your life easier by parsing the enormous amounts of data you collect and providing you with an executive summary. We recommend starting your search for enterprise bid management solutions with those that are built from the ground up on data science-driven code and algorithms.
- Machine learning – Machine learning is a subset of artificial intelligence that takes data-driven insights and learns from them over time. The best enterprise bid management solutions utilize machine learning to take the arduous task of manually managing bid levels for different keywords off your plate, using intelligent algorithms to decide when to raise bids during periods of higher opportunity and lower bids during lower-traffic timeframes.
- Natural language processing (NLP) – Natural language processing is a specific segment of computer science devoted to the interaction of humans and computers via language. In the case of SEM, natural language processing can be used to fill in the gaps for data-scarce keywords – such as the ever-present long-tail keywords you know contain higher buying intent, but tend to have too little data to be actionable. Enterprise bid management solutions that use NLP can use techniques like semantic distance modeling to accurately forecast the value of long-tail keywords and help you finally capture all those high-intent clicks.
We’ve found that enterprise bid management solutions that incorporate these features consistently drive stronger SEM performance for advertisers in these (and other) verticals on average:
- Retailers: +26% return on ad spend (ROAS)
- Lead generation: +31% profit
- Financial services: +30% revenue
Request a demo and learn more about what these powerful features can do for your SEM.