Customer Tracking and Bid Management

How Tracking Works:

If you are paying by the click, you need to know what each of those clicks is doing.
From the second they click until they leave or purchase.
If your server is already equipped with great tracking software it is easy to add a
tracking tag on the back of your ads. Instead of your Yahoo! listing going to
http://www.domain.com/salespage.html have it go to
http://www.domain.com/salespage.html?source=y+ad=6+keyword=fred.

Tracking Software:

My favorite log file analyzer is ClickTracks. It displays the webpage in a viewable
browser highlighting the click ratio for each of the links. ClickTracks also allows you
to set up custom tracking tags to view traffic through different visitor paths. While
the software is expensive to some at $500, it is a steal for some larger commercial
websites.

Some other popular conversion tracking software options are Keyword Max, Index
Tools, & WebSideStory. If you are working with an exceptionally large account you
may also want to try something like Efficient Frontier or Omniture.
ConversionRuler is inexpensive suitable software if you are primarily concerned with
tracking pay per click results. ConversionRuler starts out around $20 a month.
Yahoo! and Google also provide built in conversion tracking software which they
provide free.

There are also free tracking services such as Extreme Tracking and SiteMeter if you
want to access referrer stats easily, but I would not recommend using them for
tracking any of your pay per click statistics.
If you are a heavy spender on pay per click you will most likely want to use bid
management software.

Google Analytics:

Google also created a free cross platform conversion tracking tool which comes
with their AdWords product. It works for tracking email ads, banner ads, and
various PPC search engine ads.
On top of the free built in tracking feature Google also bought out Urchin and
rebranded the tool as Google Analytics. Google Analytics is free, and perhaps as
full feature as any other conversion tracking tool, but if you use it you are sending
your valuable market data back to your source of traffic. That may work against you
if they use your best converting terms and most frequent referrals to recommend
keywords to your competitors.


Bid Management Software:

There are automated software programs which will track your bids and change
them multiple times a day so that you achieve optimal efficiency with your ads.
These programs can do various things such as: list your site relative to another
website, bid gap management (list your site right where the first large bid gap is), bid
trapping (bidding 1 cent underneath your competitor) and various other functions.
The best part of bid management software is that good bid management
software can allow you to dynamically change the bid price from price per click
to other metrics such cost per action or ROI.

If you get big into pay per click search engines and are managing multiple accounts
it is worth the money to use a bid management program to help save time and
money. Currently three market leaders in this field are BidRank (downloadable
software), Keyword Max (hosted software application), and Atlas OnePoint (hosted
software application). Yahoo! also recently created their own bid management tool
by the name of Yahoo! Search Optimizer.


Fraud Prevention Software:

Most major pay per click search engines have fraud protection built into their
system to protect the value of click prices. You should use your server logs to
validate clicks if you are running a large campaign. Generally due to time overlaps
and differences in reporting it is considered acceptable to have an error up to 10%.
If your error is much larger than that be sure to notify the search engine.
If you have a good log file analyzer and understand how to use it then you have no
need for a fraud prevention tool, but these tools make it quick and easy to spot
potential fraud.

If you believe your competitors are clicking your ads or you are investing heavily in
a competitive market you will want to take a look at additional fraud protection.
Two of the current leaders in the PPC fraud prevention software market are
Who’sClickingWho and KeywordMax Click Auditor. They both keep track of clicks
from IP addresses over time. Even if a competitor only clicks on your ads every
few days it still adds up over time. This software allows you to accumulate the
evidence you need to reverse charges and potentially file a lawsuit, but you need to
have a large enough spend to justify it’s cost. Vericlix is a similar but free product.
Google Adwords

Google AdWords gets it’s own extremely long section because it is exceptionally more
complicated than other PPC search engines.
Google vs. Yahoo!:

Google AdWords and Yahoo! are in a battle for search distribution. One of the two
PPC services is distributed on nearly every major search engine or portal.
Google Bid Prices vs. Click Costs:

With Google you pick a maximum bid price and your bid will never exceed that.
Their software has a bid discounter built in, so often times your average bid cost
may be way less than your bid prices.
Google bid prices are not transparent so your competitors have no way to be sure
exactly what your ads are costing (due to factoring in click through rates into
effective bid price – which I will explain later). Often times your actual price is
much lower than your maximum bid price. Remember that on Google it is average
click cost that matters and that is often way different than your max bid.


A few Things you can do with AdWords:

Google AdWords is an advertising medium like no other.
• There is only a $5 signup fee (which is converted into bid credits).
• You can have ads across Google’s network of sites in less than 10 minutes.
• Google’s broad match technology allows you to receive extremely broad
distribution while keeping it quick, easy, and simple to use. Overture now
does this too.
• Google’s vast distribution network makes it possible to test a business
model without fully investing into creating that business.
• Google AdWords has syndication which you can turn on or off to
determine whether or not you want AOL users and other searchers to see
your message.
• Google has a content network of sites (including a few of mine) which you
can decide whether or not you want to advertise on.
• Google has rolled out Geotargeting so you can target your ad to a country,
state, metro area, zip code, or geographic radius of your choice. You can
run multiple ads for the same words and test them against each other or
send them to different pages to A/B split test your site or ad copy.
The Importance of a High Clickthrough Rate:
Google lets searchers determine the relevancy of the ads. Price for Google
AdWords is a function of price per click * click through rate. Google uses the
average click through rate from the 1,000 most recent ads in this calculation. This
means if you know how to get a high click through rate you can dominate Google
AdWords by serving up ads at a far cheaper rate than what your competitors are
paying.

The best way to do well with Google AdWords is to create ads with a high click through rate.
To do that you should use the search words in the copy and make sure the ads are well targeted.


The following table gives examples of how the Google system calculates bid prices
and ad positions. Observe how some low priced ads appear above high priced ads
because they are more relevant. Also observe that actual click cost sometimes varies
widely when compared to max bid price. Some clicks are at times expensive and at
other times they are cheap. It is the average click cost that matters, since that is what
you are paying. Max bid does not matter since sometimes it can widely depart from
actual click price. For example, I have seen a $6.00 max bid which had clicks go for
77 cents.