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PPC Bid Management: Requirement #3, The Feedback Loop

For many companies, the true value of a transaction can’t be measured at the time of a sale. Because of this, maximizing the opportunities of PPC advertising requires feeding that post-transaction information back into your bidding system so that your bids are based on the truest possible picture of an ad’s value. Not all systems can handle this backfeed loop, so if this type of post-sale information is material to your firm you may need to find a new system.

Let’s walk through some examples that have been valuable to our clients:

  • Margin Data: For any retailer with variable product margins or who are highly promotional businesses, bidding to actual margin dollar efficiency rather than sales dollar efficiency is critically important. However, some of our clients don’t have the COG data available at the time of checkout. By providing us this data in an off-line feed, we get the benefits of margin bidding without the client having to re-engineer their website.
  • Lead Valuation: For any business using its website to collect leads it’s important to incorporate back-end data on the ultimate value of those leads into the bidding and analysis. For banks and lending institutions that lead quality may be measured by account creation and funding, credit scores of applicants, or other well established indicators. For businesses with long sales cycles the information may be more qualitative and can be as simple as a “Good” or “Bad” flag based on the initial call with the sales rep. Any information that can meaningfully distinguish between the more promising leads and the less promising ones will be valuable to a good bidding system.
  • Customer Type: Some companies cater more to businesses than consumers. They know that the lifetime value of a business customer is much greater than that of an individual. Knowing that certain types of keywords drive more business customers than others is therefore an important consideration in setting bids and evaluating success metrics.
  • Credit Allocation: As with margin data, some clients pass us information in the pixel about which marketing program their systems think drove the order. Others pass us that information after the fact. We prefer to “see” all the orders regardless of the client’s order allocation so that we can help add insight into those difficult allocation issues. Our clients have benefited from discussions to the effect: “We noticed that X% of orders your system is allocating to affiliates came through non-brand search ads within 30 minutes of the order — does that make sense?” We can then credit or discredit those orders as the client sees fit.
  • Match-Back Data: For good reason, many catalogers and other direct marketers are more interested in attracting sales from new customers than existing customers. If this is important to your firm, feeding that information into the bidding process, so that more value can be placed on ads that tend to generate more new-to-file customers, can be a big win.
  • Frauds and Cancels: Many retailers, particularly in electronics and jewelry, see relatively high fraud and cancel rates. Using a back feed to knock out credit for orders that didn’t stick can be important, particularly if some types of keywords are more susceptible to these problems than others.
  • Anything Else: There aren’t many limits here. Whatever information relating to the above, some combination thereof, or anything else that differentiates value can be handled with back feeds.

A top-tier bidding system sets bids based on the observed value of the traffic generated by each ad, phrase, or collection of related phrases. For many advertisers, the true value of the traffic isn’t perfectly clear at the time of the order. The ability to take information after the fact and fold it into the bidding algorithm can be the difference between success and futility in PPC advertising for these firms.

Previous posts in this series are here:

Bid System Imperative #1: Strong Statistical Foundation
Bid System Imperative #2: Deep Flexible Tracking

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