E-commerce Insights: Winning at Paid Search ’07

Optimize Performance Metrics

5. Use a strong bid management technology. If you’re spending more than $5,000 a month on paid search clicks, you’ll benefit from a bid management tool.

Seek a tool that:
• optimizes your selected performance metric across your keyword portfolio;
• operates at the keyword level, as opposed to AdGroup level; and
• sets bids based on economics, not by simple position.

Also, look for a flexible tool that allows you to specify different metrics or different targets for different types of terms. Avoid optimization algorithms that are “black boxes.” A tool should be reasonably transparent. It should provide a sensible rationale for each bid.

6. Track paid search into your call center. Some catalogers have begun to display a visible Web source code on the bottom of each Web page. This code indicates which tracked link drives the click that initiated the current session. I think this is a brilliant innovation.

With such a code, when a caller tells your customer service rep (CSR), “I found you on the Web,” the agent can ask the customer to scroll to the very bottom of the page and read off the letter code in the brackets. The CSR then punches this Web source code into your order management system as if it were a catalog source code. This powerful idea allows you to track the spillover from paid search into your call center.

Guard Your Program Against Outside Forces

7. Bid by margin. If your products have considerably different margin structures, fold these variances into your bidding logic. Do this at the category level or preferably at the keyword level. Compute margin based on the actual products ordered, not on the terms advertised, as certain ads will generate significant orders for products beyond the one advertised.