Max Crowe

Originally posted by Google in its Consumer Technology Industry Knowledge Center:

Decisions, decisions
As a top search and performance marketing agency, Performics provides marketing solutions to more than 125 of the world’s top brands.  The company’s search marketing experts know how vital it is to focus on the right keywords in any search-based advertising campaign and adjust maximum cost-per-click (CPC) accordingly. With this in mind, Performics has developed its own bidding algorithm that it uses on all of its accounts.  Performics also has a team of dedicated Bid Strategists.

“Optimizing keyword bids is a critical ongoing decision we make for clients,” says Jeff Licciardi, Account Managerat Performics. “We’re constantly looking for ways to increase visibility into keyword performance to see areas where there is strong ROI and room to grow impressions.”

The devil’s in the details
In its constant quest to improve campaign performance, the agency saw a major opportunity when it learned about Google AdWords bid simulator. While it can’t predict the future, the bid simulator allows Licciardi and his team to explore what could have happened if they had set different keyword-level bids. Using data from the past seven days, the bid simulator re-calculates the number of impressions for which their clients’ ads could have shown had they chosen a different maximum CPC, how many clicks the ads could have gotten for those impressions and how much those clicks would have cost. The feature provides increased visibility into the AdWords auction and gives the Performics team the insight to make more informed bidding decisions to meet clients’ advertising objectives.

Performics eagerly adopted bid simulator to augment the agency’s proprietary bidding algorithm. “The bid simulator feature is really powerful,” says Barb Earnest, Bid Strategist. “Google’s idea of sharing actual auction data after the fact is fantastic. Bid simulator immediately gave us a level of detail greater than the traditional impression share/loss report.”

Testing and learning
Licciardi, Earnest and Google worked together to discover how bid simulator could help Performics optimize clients’ search campaigns.  At first, Licciardi and Earnest tried looking at only a small keyword subset, a strategy that left too much room for seemingly random results to appear.  After testing, learning, and consulting with Google, the Performics team began using a new approach and looking at bid simulations for as many keywords as possible.

For one client, this resulted in tracking about 400 out of 75,000 keywords. The agency then mapped the bid simulator data to conversion information across the entire program and, based on this information, manipulated CPC bids on a small subset of keywords. “Anywhere we saw strong ROI and room to grow impressions, we increased the bids in line with Google’s recommendations,” recalls Licciardi. “Then we began concentrating on how many impressions we were garnering and keeping an eye on the actual revenue the keyword was generating.  We were essentially able to calculate revenue per click and act on it.”

ROI to the max
As soon as Performics adopted this new approach, the agency began wowing clients with the results. Using bid simulator, Performics was able to further increase clicks and ROI for a large client. “For one large client, we saw day-over-day increases in impressions by as much as 11%,” says Licciardi. “Because those impressions were coming from the right places – where we already had a good ROI – increases in revenue were up to 20%. The net effect was day-over-day increases in ROI of up to 17%.”

Because of the substantial increase in performance, the client was able to shift budget from less efficient keywords in the AdWords search program to more efficient keywords identified by the bid simulator. “Without a doubt, we will continue using the AdWords bid simulator,” says Licciardi. “It gives us another layer of data to use on behalf of our clients. And, it has reminded us that there are always places to grow and improve – sometimes even within the data that we look at every day.”

March 3, 2010

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