Most companies we talk to spend their time coming up with keyword lists and writing ads.  But when it comes time to setting bids, they either don’t have the time or knowledge to come up with the best bids.

A typical account we look at has set the same bid for almost all of their keywords (with maybe a handful of higher bids for super important keywords).  They randomly pick how much they think a click should cost and then wait for Google to perform.  Usually anger ensues if performance does not occur immediately.

Let’s analyze what happens to accounts that don’t have an optimal bid established for their keywords.

What is the cost of a bid that is too low?

Interestingly enough, a bid that is below its optimum is much more detrimental to your account than a bid that is too high.  Bidding too low can actually end up sabotaging your entire account if you let it.

Here are the negative repercussions of a bid that’s too low:

Lost impressions due to rank. If your bid can’t get you into a reasonable rank on the first page, your ad won’t appear every time a searcher is looking for what you have to offer.  You can add this column to your Campaigns view in Google AdWords to see if you are losing impressions due to rank.

Quality Score Death Spiral. Your ongoing CTR is one of the biggest drivers of your quality score.  While Google technically says it tempers its expectations by ad position, we find that it can have pretty outrageous expectations for lower positions.  Almost every time we see a campaign with keyword running in the lower ad positions for a length of period of time, we usually see quality scores of 2-4 throughout the account.  Which is a truly horrible hole to dig yourself out of.  Quality scores this low, make it almost impossible for an advertiser to get into the higher ad positions without forking over a lot more money.

Not the best position for conversions. When thinking about your bid, think about the ad position that gets you the best results.  This is where you want your ad to appear.  For most advertisers we work with, this is above the fold on the first page of the results.

Losing leads to competition. When your bid is too low, odds are your competition is out there with higher bids.  So, not only are you not getting found, but you are losing business to your competition.

What is the cost of a big that’s too high?

While a bid that is too low is quite damaging, we are not by any means suggesting that you overspend!

Paying for unnecessary clicks. Lots of searchers are known to just click on the top result if it looks anywhere near relevant.  If your ad position is too high, especially for broad head terms, you are likely to pay for a bunch of clicks that will just turn into bounces.

Not the best position for conversions. Same story as with a bid that’s too low, you need to determine the ad positions where you perform best as related to your bottom line.  That might not be ad position #1.

Double high presence. We usually find that having a double presence (a paid and natural search listing) on a page has a strong benefit.  However, if you have a very high natural search presence, you might not need to be bidding for the very top paid search position as well.

Paying too much per click. Do you get as good of performance (CTR and conversions) in ad position 3 as you do in ad position 1?  Then no need to overpay!

Lost impressions due to budget. If you have all of your bids set too high, many times your budget won’t be able to support all the possible clicks your campaign might receive.  In this case, your ad won’t be able to appear all the time for your keywords since it will be limited by the budget.  You don’t want to miss out on impressions for top performing keywords, so it’s not good to lose impressions due to your budget.

In summary, it’s a little like what poor Goldilocks struggled with: how to find that bowl of porridge that is just right.  In terms of your PPC bids, too low is very bad and too high is no good either.  You literally need a bid that is just right.  Having bids that are just right can be a key determining factor in whether or not your PPC campaigns deliver ROI.  How to manage that?  You can start to review your analytics and adjust bids yourself, you can try out some of the bid optimization capabilities built directly into the search engines, or you can sign-up for a third-party bid management software like Yield Software, which does all the work for you.

But don’t stop there.  It’s very easy these days to set up advanced bidding, especially with the much better AdWords reporting now available inside of Google Analytics.  You can very quickly get a feel for days of the week and day part performance without having to create custom reports.

In AdWords, pause or lower your bids for lesser performing segments and increase your bids for the days and times that bring you the most benefit.  Give it a try – you’ll be surprised at how easy it is to set up!

If you have some positions that you know work to bring you the best results, you can also use the campaign position preference settings to fine-tune where your ads will appear.

Happy Just Right Bidding!

Everyone has gone social: you, your competitors, your partners, your customers, your leads, your friends–everyone.  So now what?

It’s time to set up a system to mine all of the qualitative data that is floating around out there and put it to good, practical use.  Try using this list of 13 truly useful things you can actively learn from monitoring social media:

1. Who’s in bed with the competition?

Who’s blogging favorably about them?  Who’s providing them with good reviews?  Who’s following them on Facebook, Twitter, LinkedIn and active in their community?  Who’s presenting with them on webinars and co-sponsoring collateral with them?

Get some good monitoring going on around your competitors names, and keep an eye on their online reviews and their social media account followers and activities.

Find their biggest fans and start to court them away.  Everyone knows how big a competitive win is – but a competitive win who is loud in the social media world is the biggest competitive win of all.

2. Who loves you?

Similar to above, who’s blogging about you? Tweeting about you? Commenting about you on Facebook? Giving you positive reviews?

It’s standard practice to reward someone who refers you new business, so make it standard practice to reward those who are essentially referring you to the masses.  Provide these “fans” with some appropriate reciprocal love.  Perhaps it’s a link back, or a coupon or some other offer.  But make sure you let anyone who speaks positively about you know that you are listening, you really appreciate it and you’d love it if they do more!

3. What do people love the most about you?

Monitor trends in positive mentions about you in reviews, blog posts and other social media channels such as Twitter.

Sometimes what we may think are our biggest selling points are not what people love us  for most.  Pay attention to what people like  best about you, and start to actively promote those.  One technique we like is to actively call them out in your search ads using quotations.  Quotations lend more trust than just touting yourself, plus it will be in your audience’s own words.

4. What do people dislike the most about you?

While you’re poring through all of your praise, also start to document trends about any negative comments, or “if they only had….” comments.

Use “if only they had” information to inform your product development, road map and / or inventory adjustments.

5. What are your competitors hiring for?

Keep an active query in your reader (i.e., TweetDeck or HootSuite or Seesmic) that monitors job postings for your competitors.

One of the biggest hints about what they are up to next can be inside of those job postings.  Many companies are surprisingly candid about direction and weaknesses inside of their postings.

6. What are your competitor’s future plans?

Along those same lines, keeping an active query in your reader that includes your competitors name along with the word plans or powerpoint or pdf docs.

Many companies are surprisingly lax about what gets out into the web, you’ll be surprised about how much free competitive intelligence will flow your way.

7. Negative keywords for PPC campaigns.

Keep a query of your head keyword terms inside of your reader and monitor the headlines and themes of blog postings and news articles that are coming in.

Add anything and everything that isn’t relevant to you as a negative keyword in your ppc advertising campaigns.

8. New target keywords for PPC campaigns.

Same query as above, but this time monitoring for new ways people are talking about your space, or new needs and reasons that are rising up.

Take advantage of these by adding them in as new target keywords to always have your PPC campaigns on top of current trends.

9. Who are the influencers and thought leaders in your space / area?

Same head terms query – both of blogs and also of Twitter, LinkedIn and Facebook.

Use this to identify who the big influencers are online in your space.  Then, make them your best friends and court them to talk about you.

10.  Hot topics for blogging

With that same head terms query, you can easily get a pulse for what is trendy.

Use trends to write blog posts about with your own opinion, expertise, and helpful information.  When you promote trendy blog posts, they will garner you the most value.

11.  Audience profiling

Where is your audience and how do they participate?  Do they blog? Do they write reviews on local sites? Do they attend webinars?  Do they download podcasts? Are they active on FourSquare, Twitter, Facebook, LinkedIn, Yahoo Questions or other communities?

Monitoring your audience’s activities and where they are most prevalent will help you figure out where to spend your precious marketing dollars and dedicate your marketing content and time.

12.  What should your Sales Tools & Collateral address?

What don’t they like about you? What is your competition promoting as their biggest advantages?  What are the current hot topics and needs?

Develop sale collateral around these so your sales force is always armed with the latest and greatest sales objections they are likely to run into and the most prevalent ways of discussing the current market climate and needs.

13.  Link building opportunities

Did someone mention you, but forgot to include a back link?

Reach out to them and kindly request that they add a link!

It’s all free data, so start to make social media one of your best sources of information today!

Unlike outdoor advertising (i.e. billboards) or radio and television ads, where precise correlations to ROI can be elusive, search engine marketing (SEM) enables marketers to track interactions and behavior at every step of engagement.

Though a huge number of web marketing professionals employ display advertising on sites like NYTimes.com or FOXNews.com or Yahoo!, a growing share of marketing dollars are being directed to the search engines and specifically pay-per-click (PPC) campaigns.  By buying the “Sponsored Links” you see on search result pages on Google, Yahoo Search or Microsoft Live Search, marketers are able to track: (a) clicks on an ad link; (b) arrival at a website’s landing page; (c) what visitors do once on the site; and (d) whether or not that visitor converts to a paying customer.

Once a visitor converts to a paying customer, web marketers are able to do an ROI analysis on that particular individual and across all customers who similarly converted to paying customers from the same campaign.  By comparing the total amount spent to acquire customers through a web marketing campaign to the amount of revenue generated by those who clicked on links and converted to paying customers, a campaign ROI can be quickly calculated.

Obviously, most web marketers want to make at least one more dollar than it cost to execute the campaign.  And, there are some instances where web marketers will make well-calculated decisions to arrive at a negative ROI in order to achieve their campaign objectives (for instance, you might decide that acquiring a large volume of new traffic within a tight timeframe, even if there is a negative ROI, is the right long-term strategy for your site).  But ideally, campaigns will perform much better than either of these scenarios and the degree to which a campaign’s ROI is impressive or not will have much to do with a number of factors.  These include:

Pay Per Click (PPC) Campaign Management.  Achieving excellent placement in the Sponsored Links sections of search results pages is a holy grail of search marketers.  There are a number of factors that ensure a PPC campaign is well managed and optimized for the best outcomes.  These include keyword lists, bid management, geo-targeting choices, product pricing and promotion decisions, etc.

Search Engine Optimization (SEO).  While it is important to actively and accurately manage paid search campaigns, it is equally as important to ensure websites rank high in natural (or organic) search results.  Clicks on these links are free to the advertiser and can effectively lower the overall cost of a web marketing campaign when averaged with paid customer acquisition.  By effectively optimizing a website for search engines, web marketers can ensure the same paid links appear high up in natural (and therefore free) search results.

Landing Page Optimization (LPO).  Clicks from both paid and natural search results must resolve to a web page that is optimized for converting first-time or returning visitors into paying customers.  And, LPO is also concerned with keeping the sales cycle as short as possible.  There are both simple and sophisticated ways to manage how such pages are optimized—either dynamically or in limited tests.  Landing pages can be the homepage of a website, but more experienced web marketers will typically create a specialized landing page that ties directly to the links that generated the clicks in the first place.

Anyone interested in embarking on a web marketing campaign should do so with a measurement plan in mind.  Being able to justify the time and expense of such efforts is critical in understanding the best ways in which to attract and profitably retain customers.  So time for a Small Plug: our Yield Web Marketing Suite is a fully automated and fully integrated set of powerful modules to enable you to easily set up and manage your web marketing efforts.  And to effectively measure the ROI on your efforts.  It’s ideal for small businesses and those with limited marketing resources.  Even more sophisticated web marketers use Yield Software to make the management and tracking of campaigns fast, easy and profitable.

For more information about our Yield Web Marketing Suite, go here.

To see more blog posts in our Introduction to Web Marketing Series, go here.