Types of Search Marketing Platforms: Bid Management vs. Budget Based Platforms

In a blog in April of this year, I wrote about automated search marketing platforms and questions to ask providers. In today’s post, I’m going to briefly compare/contrast two types of automated platforms: bid management platforms and what we’ll call budget based platforms. We’re going to stick to how they work, what they do (and don’t do), and avoid using company names.

Before going further, for full disclosure I’ll state that TopSide Media is in a different category, what we call customized search marketing service. In our model, professionals who are qualified and have years of business and search marketing experience, learn the goals of your business, design the campaigns and align the intent of searchers with your company ad budget, services and products. We also research the negative keywords, write and test multiple versions of ads, and manually use the many settings for each search engine. We monitor and optimize all along the way, from impression to conversions, to get the most return from your budget.

What a bid management platform does
OK…back to platforms. At the most basic level, a bid management platform helps automate bidding and some routine optimization and reporting tasks across multiple PPC ad platforms. Think of these as a tool that can help a person who already knows how search engine advertising works do it faster and save time on creating reports. While they can save time on routine tasks and reporting, on the down side, bid management platforms do not perform the most complicated, but essential tasks: design robust campaigns and ad groups that align user intent with your company offering, write many versions of text ads, analyze and help fix conversion issues with your website, and so on. Further, some of these platforms take a sizable bite from your budget, and require up to 5% of total spend every month for using their online tool.

What a budget based platform is about
In contrast, in a budget based platform, you tell the sales rep for the platform (or the many companies that use a private label platform) how much budget you have to spend. This number is plugged into your business category in their automated platform, and it combines traffic from multiple sources. At the end of the reporting period, you look back and see how many clicks, “web events”, phone calls, other measurements you got for your money. So that they can be automated, from our point of view, a lot gets sacrificed. Just one example of features lost: many custom geotargeting features from Google AdWords.

Transparency or lack of it
In a bid management platform, the cost to the search engine and the cost to the provider of the bid management tool is usually transparent.

In a budget based platform, you will likely not know what percentage of your budget was spent on traffic and how much was commission or fees. Generally, though, the bite is a major one. Further, it may not be easy or even possible to determine how much traffic was search traffic, and how much was contextual or other types of traffic. Some would argue that it’s the results, how many calls or conversions and their cost that matters. To some extent, we agree with that point, as long as the numbers are real and the right ones. For example, it is also important to know how many clicks, calls and emails came from the use of your company name as a keyword. Another key metric that is not easy to get is quality of incoming phone calls: how to filter out repeat calls, how many lasted more than 1 minute, etc. (Note: if the two examples seem like hair splitting, take a deeper look — results from your company name or duplicate and short calls can each be 20% or more of the total.)

Use Automation Wisely
In reading this, one might get the opinion that I am against automation. Far from it. I’m all forautomation as long as it saves work or cost, and does not compromise much quality of the process or results. For example, at TopSide, we recently automated two processes that, when done manually, take more time and do not deliver added value to clients. a- Rather than manually testing websites we advertise (to make sure pages load and quickly) we now automatically “ping” these websites at more frequent intervals. b- Also, we now have a reporting dashboard that automatically summarizes click, conversion, and other data from the search engines with data from our phone call tracking system. Although these tools initially cost quite a bit to build, using them helps our clients and us too.