PPC Automation 2014: The ROI of Paid Search Automation

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1 PPC Automation 2014: The ROI of Paid Search Automation A Digital Marketing Depot Whitepaper

2 Executive Summary: Paid search is the lynchpin for a robust digital marketing strategy and can enable brands to own the search engine results page (SERP) and improve bottom-line results. The paid search landscape, however, has grown increasingly complex. Today s search campaigns run on desktops, smartphones and tablets; and offer new ad formats and targeting options that reach users in more relevant ways. As a result, many paid search professionals are asking how automation can help them run more efficient, high-performing campaigns. This whitepaper explains how paid search automation can significantly improve the effectiveness of your search advertising campaigns. It discusses the many paid search tasks that can be automated, the specific benefits that paid search automation can provide, and three types of automation that your organization can implement. Note: This whitepaper is based on a webcast from Digital Marketing Depot. Thanks to the original contributors: Brad Geddes, Founder, Certified Knowledge; and Ginny Marvin, Contributing Writer, SearchEngineLand. To view the ondemand version of this webcast, please visit Contents: Paid search automation is more than just bid management...2 Figure 1: The evolution of SERP complexity...2 Figure 2: Weighing the costs versus the financial benefits of paid...3 search automation Three types of paid search automation...3 Identifying tasks for automation...3 Getting started with automation...5 Figure 3: Evaluating if paid search automation can work for you...5 Conclusion Third Door Media, Inc [email protected]

3 Paid search automation is more than just bid management Until recently, paid search advertising was relatively simple to manage. All ads targeted the desktop and featured descriptive headlines and text. But Google s introduction of bolded synonyms on SERPs in 2007 created an industry uproar. Today, Google and Bing SERPs feature product listing ads (PLAs), images, videos, product ratings and reviews, telephone extensions and links (see Figure 1). Consumers search from numerous devices including smartphones, tablets and desktops. Figure 1: The evolution of SERP complexity Paid search automation tools have evolved to help professionals manage search and retargeting campaigns across multiple devices. While bid management is an important aspect of paid search automation, these tools can streamline workflows and create productivity gains for many time-consuming, manual tasks related to keyword, ad group and campaign management and optimization, as well. Here are five key benefits that automation can provide to your brand s paid search efforts: Time savings. Automation enables you to make faster, better paid search decisions. The data analysis and reporting that you can do in six hours can be done in minutes by software algorithms. Combining the power of computing with the art of marketing allows you to make better decisions about your paid search campaigns going forward. Financial savings. Automating manual tasks such as keyword bidding or pausing and adding keywords in response to changes in inventory can make those processes more efficient. Figure 2 illustrates three ways to analyze the cost savings that can result from paid search automation depending upon your job position. For example, if you are a paid search analyst you can use the first two formulas to understand whether or not the time spent on manual tasks multiplied by the salary you are paid for that time is greater than or less than the cost of automation. You can then make the case to your CMO that it makes financial sense to automate (or not) based on the answer. More efficient data crunching. Many digital marketers are collecting, combining and crunching data from an unprecedented number of data sources. While machines can t provide human insights into what the data means, they can collect, combine and crunch the data more quickly and efficiently than any person. Pattern recognition. Automation software can quickly find the simple patterns within data sets. When manually done, these tedious and repetitive tasks can take a lot of time to work through the numbers and create one report after another to identify differences. The ability to spot outliers: Outliers the data that doesn t fit into any pattern can offer important insights into your keyword, geographic and conversion efficiency. For example, spotting the city or region where conversions have fallen, or the keyword that has jumped in volume and subsequent conversions. While smart paid search marketers can look for the whys behind these outliers, it s the software that can identify the outliers to begin the analysis Third Door Media, Inc [email protected]

4 Figure 2: Weighing the costs versus the financial benefits of paid search automation Position Formula Action Paid search analyst ((Hours to do manually) x ($$/hour)) > (Cost of automation) Create presentation for CMO to justify automation decision CMO ((Hours to do manually) x ($$/hour)) < (Cost of automation) Make the decision to hire additional paid search analyst(s) CEO ((Increased $$ from auto decisions)) > (cost of automation) Make the decision to purchase paid search automation software Source: Third Door Media Three types of paid search automation Paid search automation is not an all-or-nothing proposition. It can be approached in varying degrees, with each offering several pros and cons depending upon your brand s organizational and paid search needs. 1. Full automation. Fully automating your paid search initiatives means that the system does everything for you. Your analysts will enter some inputs or business requirements and the algorithms do the rest. The advantage to this approach is that there is virtually nothing for you to do manually. The risk is that if you are inputting bad data or rules the results will be bad. You also need to completely trust the software s algorithms to provide accurate, actionable results. 2. Computer/human assisted (hybrid). A hybrid solution enables the software to do the heavy lifting by collecting and crunching data, but provides recommendations for the paid search analysts to act upon. The onus is on you to reject or accept the system s recommendations. 3. Automated alerts. This low-tech approach alerts system users when certain business rules or thresholds are met. For example, when a keyword budget rises by more than 20 percent, or an ad group s impressions increase more than 30 percent in 24 hours. The goal is to point out significant events that you ll want to analyze and correct (or take advantage of). An important caveat to using any of these approaches is that your system outputs will only be as good as your system inputs and the algorithms you use to analyze that data. Automation does not eliminate the need for smart paid search analysts to provide the system with good initial data. Every brand s goals, inputs and systems may be different. What doesn t change, however, is the need for the automation system to be run by people who understand the numbers they are inputting and can effectively examine the data being output. You may need fewer of these people as a result of automation, but you need them nonetheless. Identifying tasks for automation As previously mentioned, paid search automation can streamline workflows and create productivity gains for many timeconsuming, manual tasks related to keyword, ad group and campaign management and optimization. The following list provides key details about each of these paid search tasks and how automation can improve their efficiency. Data collection and reuse. Paid search professionals are collecting unprecedented volumes of data. The question, therefore, is not how to collect more data but how to reuse the data you already have more effectively. For example, utilizing high-performing search campaigns and keywords from the past for an upcoming holiday or promotion. Automation can help you qualify existing leads for more profitable bidding or remarketing campaigns. Actionable lists. Output data is useless if it can t be acted upon. Automating your paid search efforts with a computer/ human assisted hybrid or alerts system can make it faster and easier to identify patterns or outliers that highlight actions that need to be taken Third Door Media, Inc [email protected]

5 Text ad creation. Many enterprises create paid search ads via formulas, which is a time-consuming, manual task that can be expedited through automation. You can build formulas based upon your ad group structure, keyword insertion, tag lines, product type or service type, and automatically create new ads. Dynamic rich media ads. Automation can also work to streamline display ad creation. Many brands retarget website visitors based on their most recent page views. Automation allows you to go beyond that concept and create dynamic remarketing through merchant feeds. This type of ad creation efficiency is particularly valuable for enterprise-level brands generating tens of thousands of display ads. Single and multi-ad group ad testing. Using a hybrid automation approach to ad testing can dramatically boost your productivity. Let the system crunch the data and identify for you what ads (or ad groups) are working and what ads (or ad elements) need to be eliminated or revised. This approach allows you to focus on the creative aspects of your paid search campaigns, which is where people excel over computers. Landing page testing. Automation can begin with A/B testing and move on to multivariate testing to allow you to automate landing page creation. Once you automate all of your variations you can analyze the results to see what page elements are working the best for your brand. Ad updates. Making changes to your promotions, prices or shipping dates are common and predictable tasks that can easily be automated. It also creates good will for your brand in the eyes of the consumer when shipping dates can be dynamically updated (and become more accurate as a result). Turning on/off promotions. Paid search analysts often set calendar reminders or manually turn holiday promotions on and off. You can easily automate all of these processes since promotion dates are frequently scheduled in advance. Keyword expansion. As a search marketer or analyst, your focus is on query management and expanding your set of keywords. Automating the process allows you to build rules into the system that can identify thresholds for turning queries into keywords. For example, If this query gets more than X clicks and X conversions, and if the average conversion value is greater than X ROAS, then make it a keyword. Negative keywords. Conversely, manually crunching the numbers on negative keywords is a poor use of your time. Automation enables you to set filters every month that specifies when to add a query or keyword to your negatives. Active/paused keywords and inventory updates. Automation is very powerful when you combine it with your internal CMS to link product inventory to keyword availability and selection. For example, when a product becomes out of stock, automation will allow you to quickly pause relevant keywords and then resume them when those products are back in stock. This can also be useful when linked to call center activity. Bids can be automatically reduced when call wait time hits a threshold and you don t want potential customers sitting on hold for too long. Conversely, you can automatically increase bids on paused keywords when there are free call agents standing by. Account expansion. New products and services are often noticeably absent from your paid search efforts. Using automation, you can dynamically create new ad groups for new products or services, and even integrate your CMS to identify the URLs on your website which lack paid search-generated traffic. These are just two ways to use automation to look for the hidden opportunities within your website. Bid management. Keyword bidding is one of the most common tasks that paid search analysts automate. Bids are dynamic and transient, meaning they are only effective until you have to bid again, which can be in minutes or days. The more efficient you make your bidding process through automation, the more tangible your gains will be. Attribution management. Multiple digital channels line the consumer conversion path and it s critical that you consider the value of every touch point. Paid search automation systems offer a more holistic view of the consumer that looks at all of the touch points they ve clicked or viewed and how that impacts conversion rates. For example, you may be able to identify that consumers that see a display ad or tweet once, a paid search ad once and then an are three times more likely to convert. This process combines huge amounts of data and requires fast pattern recognition Third Door Media, Inc [email protected]

6 Reporting. Too many paid search professionals spend too much time each month creating reports. It s a repetitive task that generates the same reports and sends them to the same people every month. To automate the reporting process, you simply need to define all of your reports upfront (including your day-to-day data, higher level trends for the CMO and profit-and-loss type statements for the C-suite) and let the system generate the reports. Getting started with automation Before you can begin to effectively use paid search automation, you must have a clear understanding of your brand s current marketing processes and the KPIs you will use to measure success and improvements in productivity. Perhaps most importantly, you must ask yourself the following: Is our paid search process consistent and repeatable? If the answer is yes then automation can benefit your efforts. If the answer is no then you need to ask yourself: How can we make the process consistent and repeatable? A flowchart is a valuable tool to help you evaluate the paid search automation decision. Figure 3 illustrates one example of a flowchart that highlights how you can visibly identify the parts of the process that are consistent and repeatable. It can lead you to the decision to begin with a more simple alerts system or a computer/human-assisted hybrid until more of your paid search process is consistent and repeatable. Once you begin that journey, if you are happy with the majority of the system s recommendations or results, you may decide to move into full automation. If you are not happy with the results, you ll need to check the inputs being used in the system and decide if some reasonable adjustments can be made to improve efficiency. If you can t, then you may decide not to automate. Figure 3: Evaluating if paid search automation can work for you 2014 Third Door Media, Inc [email protected]

7 Conclusion The complexity of today s digital marketing landscape is leading more and more paid search professionals to considering automating the manual tasks involved in executing high-performing campaigns. There are many benefits to paid search automation, and there is no one-size-fits-all approach that will work for every organization. The best approach combines the speed and scale of computer technology with the creative know-how and insights that search professionals bring to the table. Good technology and smart people can help your brand maximize results. n About DoubleClick Search Google s DoubleClick products provide ad management and ad serving solutions to companies that buy, create or sell online advertising. The world s top marketers, publishers, ad networks and agencies use DoubleClick products as the foundation for their online advertising businesses. With deep expertise in ad serving, media planning, search management, rich media, video and mobile, our DoubleClick products help customers execute their digital media strategy more effectively. For more information: About Digital Marketing Depot Digital Marketing Depot is a resource center for digital marketing strategies and tactics. We feature hosted whitepapers and E-Books, original research, and webcasts on digital marketing topics -- from advertising to analytics, SEO and PPC campaign management tools to social media management software, e-commerce to marketing, and much more about internet marketing Third Door Media, Inc [email protected]