SMX Advanced – Debate: Is Bid Management Dead?
Comments are paraphrased.
Moderator: Jeffrey K. Rohrs, VP, Agency & Search Marketing, ExactTarget
Speakers:
Robert Ashby, Microsoft (formerly Director of Search @ Expedia)
Peter Hershberg, Managing Partner, Reprise Media
Misty Locke, President & Co-Founder, Range Online Media
Chris Zaharias, Senior Vice President, Strategic Initiatives, Efficient Frontier
Jeffrey – We’re going to try out a good ole Lincoln Douglas debate formate. Hopefully, it’ll become a tradition at SMX.
Misty and Peter are the Dead Team, and Chris and Robert are the Not Dead Team.
Misty – The belief that a magic black box can understand your past, your present and your future, is dead. I am here to challenge how you view Search Marketing. Search engines are no longer bid to position. Limited data means uninformed bid decisions. Search is not just about keywords. Neither is it about ‘The Last Click to Conversion.’ Consumer intent is not managed by a tool.
Robert – How can you expect humans to do things like manage a tail of keywords with several thousand keywords.
Misty – I believe you’re misrepresenting my point. It’s not that I don’t believe such tools don’t have a place; they’re just not the end all and be all.
Chris – In 2001-2002, smart marketers started buying lots of keywords, and realized they needed to track things. Most built spreadsheets to track their system. Many realized they could webify these tools and sell them as ASP. Most went away as the search engines lost transparency. There are proofs that not only does bid management exist today, but that it works well. Firms that have tools using data modeling can manage campaigns successfully.
Peter – Would it be true to say that Quality Score creates a situation where two advertisers might need to pay different amounts for the same keyword and position.
Chris – Yes.
Peter – Neither of us are saying that bid management is absolutely dead, but neither is it any longer the most important thing. Over time, and with the addition of quality score, it’s not about who is willing to pay the most, but whose ads are most relevant. It will be interesting to see what happens when Google and MSN, with their acquisitions, start giving away bid management for free. If bid management is a commodity, the value is in ad creation, campaign setup and analytics.
Robert – Large scale campaigns are still a challenge. It’s a factor of time. I disagree that bid management is dead. It’s a foundation that allows you to do other thing. Bid management is the one thing you don’t want to spend a lot of time on, but you have to. If you don’t watch what you’re doing, you can blow your entire budget without much reach. There’s nothing preventing a bid management system from looking more holistically at the campaign.
Chris – The future is auction based systems selling online and offline advertising. It’s critical to have systems to catch all the data and use it to optimize the campaigns. If you look at the value chain of search, you need to work with a technology solution that addresses the marketing and the merchandizing. Many marketers can’t get to this, because they’re stuck working the math of bid management.
Misty – You do need tools to get the job done. You do need help with the placement and management of thousands of keywords. But real search marketers look at search marketing outside of bid management. We sell the time and expertise to manage your campaigns. A keyword is just as important as a television ad, but how you deploy it is not bid management.
Question – The current bid management system is designed to support the traditional media ad buy. The public is not going to be in that model. Is the game going to change again? When DoubleClick goes public, what can we expect to change in the tool.
Chris – The search engines and the media networks will all have some capabilities for helping the advertiser optimize their campaigns. I think we’re a ways away from having the search engines do all the bid management. There isn’t much trust in marketers in the analytics being provided by the search engines.
Peter – Bid management may not need to be dumbed down like analytics was.
Jeffrey – How many of you think bid management will be subsumed by the networks in five years?
Misty – They’re already offering it.
Chris – As a proponent for the continued existence of third parties, the search engines will likely come along with a model that gets rid of CPC and is more of a rev share. That’s likely five to ten years out, but it will happen.
Question – Can you give us examples of how you take strategy and use the bid management tools to implement them?
Misty – Many brand focused keywords are not placed on bid management. If the value is captured offline, bid management tools cannot manage them properly.
Chris – Some brand advertisers and their agencies are getting quite savvy. If you figure out the proper metrics, you can use systems to manage them.
Question – I’ve never really heard bid management called a commodity. You really feel this way?
Peter – Early on, we saw bid management going the way of ad serving. Saying it’s completely commoditized may be a bit of an overstatement, but it’s clearly going that way.
Question – Rob, did you feel that bid management was a commodity at Expedia.
Robert – I’ve seen campaigns run on spreadsheets. When using tools such as Efficient Frontier, we saw improvement in areas we weren’t expecting them. This sort of thing is impossible to do manually.
Misty – For the most part, all the bid management tools work the same way, and are based upon the way search marketing used to work.
Question – If an element of a system can be gamed, it will be. There are more parameters than there ever used to be. Elements will be taken over by the robots, but clever marketers will figure out how to work with them.
Chris – If you look at the different markets, an advertiser only needs to have a pulse in some markets. As markets mature, advertisers all do best practices. At this point, most data isn’t being looked at, because there is so much. The role of bid management is to take all the data that has been ignored and use it.
Misty – I agree and I disagree. I agree that you can get to a point where you need analytics to get to the next point, but if you get to that ceiling, it’s because you are just looking at the keywords and not the other factors. You will limit your growth is you just look at keywords and bids.
