Most forms of paid digital marketing use an auction model where advertisers compete against each other to display their ads to a desired audience. Each advertiser nominates a bid that represents the maximum amount of money they are willing to pay for the auction. The advertising platform either uses the bid amount alone or a combination of factors to determine which ads are displayed and in what order.
The ideal bid price for any auction is one that ensures an ad will get a high enough position, or enough exposure, to attract valuable clicks or impressions. However, it is important that the bid is low enough that the cost does not erode the benefit that those clicks and impressions deliver.
Finding that balance between cost and returns sounds simple enough, but in reality there is a multitude of factors that impact each auction and it is not humanly possible to keep on top of all of them. With the nature and frequency of these changes, it is rare for the ideal bid for an advertiser to remain the same for more than a few minutes. In fact, there are likely to be significant changes in the ideal bid day-to-day.
Keeping up with these changes for a single marketing campaign can be a full-time job for a team of marketers, as they need to download constantly, evaluate, re-calculate and update their bids. Hiring enough staff to manage all your marketing campaigns in this way is simply not feasible. As a result, many businesses compromise by making changes less frequently and making generalisations so that they can make one change to a large group of similar bids.
It’s situations like these where bid optimisation becomes a vital tool for your digital marketing campaigns. Using this type of technology we can specify the ideal bid amount and the technology will do the manual work of downloading, evaluating, re-calculating, and updating your bids.