Search Engine Guide Case Study: Automated Bid Management Tools Remove Cap on Lids.com Efforts

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To meet your paid search advertising goals, you must find a way to overcome time as a limiting factor. Because there are numerous "levers" that require frequent adjustment within the paid search auction of every keyword, it typically isn't long before the volume of keywords on which you bid, and the price competition that you face, turns the manual management of your campaign into a full-time job.


And unless you are manually raising and lowering bids continuously 24/7 and 365 days a year in response to the dynamics of each and every keyword auction in which you are participating, money is being thrown out the window.


This was the case in early 2004 with the paid search campaign of Lids.com, the online sales channel for the 550-location Hatworld chain of retail stores. But by the end of 2004, the number of monthly orders generated by Lids.com's paid search campaign had doubled, cost per order had dropped 60 percent and return on advertising spend had increased more than 150 percent. Plus, the company's executives weren't spending a minute longer managing their campaign than they had been months earlier.


Lids.com achieved these results by replacing manual management of its campaign with management via an objective-based, automated bidding agent.


The first time constraint the company faced was raising and lowering bids on all of the keywords used to describe the 7,500 products sold on the site. When managing the campaign manually, Lids.com was able to manage only 500 keywords and had time to do it only in the Google AdWords program.


But when its list of keywords and past campaign data were loaded into the bidding agent, the tool took over the entire bidding process for Lids.com, letting the brand expand its campaign to more than 13,000 keywords. It also let Lids.com participate in Yahoo Search Marketing's paid search program as well. That's going from 500 keyword auctions to more than 26,000 with no additional staff time required.


The automated bidding agent also cut by 80 percent the time it took for Lids.com to bid profitably on its 12,500 new keywords by employing a technique called "keyword bidding imputation."


The tool did this by comparing keywords for which it had past performance data to linguistically similar keywords within its set of new keywords. It then assumed that the new keywords would perform much like their linguistically similar counterparts and immediately began bidding on them accordingly.


Like Lids.com, many marketers are reaching the point in their manually managed campaigns where time will begin to limit their size, scope and effectiveness. Today's automated bid management agents provide an important tool for making the component of time less of a limitation.


For more articles from The Direct Marketer's Essential Guide to Search Engine Marketing, visit www.dmnews.com/search .


A PDF of the guide is available at: http://www.dmnews.com/pdffiles/semguide.pdf


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