Efficient Frontier Takes Holistic Approach to Keyword Search Bidding

by Kate Kaye, Jun 22, 2004, 12:00 AM

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Search marketing services provider Efficient Frontier has launched a paid search service that automates search keyword bids based on broad business goals. Rather than executing bids based on predetermined pricing parameters for separate keywords, the system acts on a more aggregate level, anticipating overall campaign returns for all keywords across all search engines, and automatically choosing the most effective bid strategy.

In 2003, 4 percent of search engine marketers each placed bids on over 1,000 keywords, according to Jupiter Research Analyst Niki Scevak. This year, that number has increased fivefold to over 22 percent. Overseeing an increasingly lengthy list of keywords is no small task or expense. "One-third of search marketers actively manage campaigns on a daily or more frequent basis," says Scevak, who points to the significant labor costs involved in implementing search campaigns.

"People's campaigns are growing," observes Ellen Siminoff, president and CEO of Efficient Frontier. "They're finding that the more keywords they have, the higher the value." As search campaigns scale upward, Siminoff believes that search marketers will find rules-based software that requires micromanagement of individual keyword bids to be less effective. While she admits that keyword-specific systems are useful for a handful of keywords, she contends that marketers dealing with hundreds, thousands, and sometimes millions of keywords "can't make discrete individual word decisions."

The Efficient Frontier system bases bidding models on marketplace projections and advertiser clients' budgets and metrics, optimizing bids, and generating new keywords throughout the campaign. Measurement reports are accessible via the Web at all times.

It was only a matter of time before automated search technologies like that of Efficient Frontier began to make the scene. After all, search marketers that place bids on thousands of keywords most likely are not manually entering them into Google's and Overture's systems.

Performics, another services-oriented search marketing outfit, was acquired last month by ad technology provider DoubleClick; Performics primarily serves large direct marketers such as Target and L.L. Bean. AQuantive, Inc.'s Atlas DMT, a DoubleClick competitor, serves both large and small agency and advertiser clients through the product suite it developed from the GoToast technology it acquired in December 2003.

Jupiter's Scevak predicts that over the next few years, more and more search marketing agencies will either develop such technologies in-house or work directly with search technology firms. He thinks the search marketing technology and services sector will develop in the same way the interactive ad campaign management industry has.

Managing multiple keywords "gets difficult once you have more than the number of keywords that can fit on one screen," explains Chung Meng Cheong, Director of Category and Marketing at Elance Online. The company pairs small businesses with professional services, and has worked with Efficient Frontier for almost a year to help manage the list of more than 10,000 keywords it bids on regularly.

Elance Online handles its search efforts in conjunction with account managers at Google and Efficient Frontier. The firm recently introduced specialty stores that cater to particular market segments. Once keywords, landing pages, and offers that are most relevant to each segment are determined, Efficient Frontier steps in to manage bid price levels for keywords. In addition to Elance, Efficient Frontier serves clients in the e-commerce, auto, and travel sectors, including automotive Internet marketing company Dealix.

"Other software rules tend to apply at a granular level," says Elance's Cheong, who suggests that rules-based technologies might appeal to a "very sophisticated advertiser," just as an experienced investor might select individual stocks and bonds as opposed to mutual funds. The Efficient Frontier system, he concludes, "allows me to be more top-down as opposed to bottom-up."

Use of automated search technologies like Efficient Frontier's will become the norm, forecasts Jupiter's Scevak, adding that the only real barrier to adoption of such tools will be "winning marketers' confidence in the tool and the bid strategy that the technology provides. These tools are controlling real marketing budgets at very significant amounts of spending."

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