Cowabunga Dude: Riding Forrester's Bid Management Wave
Conversions no longer happen from just one device. Several can contribute to the download of the white paper or the sale of jeans. Last weekend I relied on a Wi-Fi connection, a smartphone and a tablet to make a purchase from Nordstrom. This cross-channel conversion continues to become the norm, highlighting the need for stronger bid management platforms that automate and optimize paid-media campaigns, such as paid-search ads running on desktop, mobile and social platforms.
That means calculating the marginal return on investment on each keyword and setting the proper bid each minute of the day to achieve an overall goal, according to Aaron Goldman, Kenshoo CMO. Forrester Research identified the Kenshoo Portfolio Optimizer (KPO) at the top score for "conditional bid optimization" in a Wave report released Monday.
Earlier this month, Kenshoo said it raised $12 million in a late-stage financing round led by Tenaya Capital. All existing Kenshoo investors, including Sequoia Capital, Sequoia Growth Fund, and Arts Alliance, also participated in the latest round.
Responding to a growing demand for bid management tools, Forrester Research released The Forrester Wave: Bid Management Software Providers, Q4 2012 on Monday detailing the top five companies in the space: Adobe Systems, Google DoubleClick, IgnitionOne, Kenshoo, and Marin Software.
Making it more interesting, the Forrester report not only analyzes strengths and weaknesses of the five supporting bid management software tools for paid-search media, it also considers strengths and weaknesses of each of the company's executive team as well as size, number of customers, and retention rates.
Forrester's evaluation analyzed a variety of capabilities to set up campaigns, identify keyword opportunities, ad and landing page testing, quality assurance processes, and platform ease of use, along with the range of media options that each vendor supports, its international capabilities, and how it optimizes bids in conditional situations, such as competitor moves or audience response.
Marketers that decide to adopt a bid management tool will still have initial challenges. The biggest challenge is defining goals, according to Goldman, because a tool is only as effective as the inputs it is given. "Marketers must set goals that are in line with actual business objectives, not campaign constraints to meet the paid-search structure," he said. "In other words, use a portfolio approach to meet a goal like ROI vs. a bid rule, such as 'bid to position 1.'"
Goldman also points to implementing tracking as an initial challenge. Marketers must get buy-in from those who control the purse strings and budget. The bid management platform must become the "true north" to track results before getting the actual tracking in place.
Marketers also need to develop trust with clients. Many clients are hesitant to let technology take over because they are accustomed to manually managing keywords and campaigns. "It can take time to adjust, but once you start to trust the system, you'll realize it can make millions of calculations that us mere mortals cannot," Goldman said.