Bid Management

What is Bid Management?

Bid management is also called bid administration. It describes the automated management of digital marketing campaigns and their bids. Especially in the field of SEM (search engine marketing), bid management is often used. With bid management tools, ads that are billed according to CPC (cost-per-click) can be better budgeted and controlled. Thus, the performance of the ads can be increased and a good ranking can be achieved.

How does Bid Management work?

Bid management works like a bidding platform where advertisers bid for ad space on websites or search engines like Google. When placing a bid, you specify how much you want to bid per click. The advertiser then compares your bid with the bids of other interested parties who also want to bid for the same keyword as you. Based on your bid, the advertiser chooses which advertising space he will finally allocate to you.
With a bid management tool you determine in advance how much you want to bid on which keyword. The tool then plays your sponsored link at the best possible position. In the further course of the campaign, your ad can be optimized by the algorithms of the tool. This enables you to make your campaigns particularly efficient in search engine marketing.

What are the tasks of Bid Management?

Bid management is basically about optimizing the bids placed for ads. Which goals are to be achieved with the advertising varies depending on the campaign. As a rule, however, three goals are fundamentally given in bid management:

1. Maximize clicks
   This goal is probably self-explanatory for you. When you place an ad, you want more traffic on your website or landing page. An important metric for you in terms of clicks is the CPC, because you should still keep this low in your campaign. The more clicks you get, the more you pay for it, or the faster your possible campaign budget is used up.
2. Maximize conversion rate
   Of course, you also want to increase your conversion rate with your ad. However, the quality of the resulting traffic is crucial. If you’re advertising an exclusive and high-priced product, you’ll only need a small amount of high-quality traffic to reach your goal. To maximize your conversion rate, you should let quality prevail over quantity.
3. Maximize profit
   The third goal results from the second goal. If you manage to increase
   your conversion rate, the probability is very high that your sales will also increase, consequently your profit 😉

Bid Management with Google Ads

Google Ads is the advertising platform of the world’s largest search engine Google. The bid management in online marketing largely takes place via Google Ads, optimized for the search results on Google. Google divides the bid management system into three categories:

1. Rule-based bid management
   In this system there are clearly defined rules. For example, you can precisely define the CPO (cost-per-order). If your budget limit is reached, your ad will no longer be played for the corresponding keyword.
   
   
2. Evolutionary bid management
   In this type, a self-learning algorithm is provided by the system. This adapts independently to the conditions on the market. Of course, you enter your settings in advance, on the basis of which it adapts to the constantly changing conditions.
   
   
3. Portfolio-based bid management
   With this bid management system, you don‘t just work with one keyword, but with the entirety of a complete keyword portfolio. If you bid on a weaker keyword, for example, this can be compensated by a strong keyword. Your campaign is considered as a whole and also optimized as a whole, because the overall performance should be right.