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Top bid: $5.00
Second bid: $1.01
Third bid: $0.85
and so on....
Is it just that the guy setting up the $5.00 campaign is a bit lazy at management?
Overture only allows a set number of bid changes a day and with multiple bidders in a bid war autoscripts can be disabled fairly quickly. Besides, if you configure your bid management software to counteract mine you'll lose unless you revert to human monitoring. I have staff to step in whenever high auto bid volatility calls for it...I do it all the time.
But, it's nice to have the Bid Management Software so you don't have to watch it every minute. I set mine to monitor only during the busiest 8 hours of the day. That way my quota for changes at OV aren't wasted during slow times. During the slow times, I monitor it myself or have an employee do it every hour or so.
It's all speculation as to what the $5 bid is in reality. It might be they have an unscrupulous agency managing it and to be lazy they just lock bids in at suicidal prices knowing that nobody would bid more than $5....... but along comes a "killer" and that $1 bid becomes a $5 bid.
Wthether you opt for software, as has been pointed out there will always be times that you are potentially vulnerable playing games. Even with human management, there is the time it takes to refresh a page, where things can happen, and often the bids you see in "More Bids" are different from the ones visible in the top 5, so what the "real" cost per click is going to be is anyone's guess.
Don't ego bid, not worth it, a well written ad at $1 will outperform the $5 every time.
I set mine to monitor only during the busiest 8 hours of the day
I do that also, but conversely, to counteract a competitor employing that strategy, I or a staff member will monitor continually during those periods, as much as every 15 minutes if the autobid warrants it. The result is that the competitor will not be able to rely on his bid management software and will be forced to make adjustments one way or the other... and I'm calling the shots.
Don't ego bid, not worth it
Absolutely. Emotional bidding of any sort (ego, anger, revenge, or whatever) is counterproductive and a very poor business strategy, and will almost always backfire in some manner, espcially if you're unable to back up your actions with monitoring if necessary. Bid wars don't benefit the bidders.
While it's relatively straightforward for a human to regularly monitor the small number of keywords you're talking about, human intervention breaks down at even modest scale (say 1000 keywords). Case in point, if there are, say, 5 bid positions of meaningful volume across 1000 keywords, that means there are 5 to the 1000th power potential scenarios, one of which is ideal at any particular point in time. That number of scenarios can *only* be evaluated by software, not humans.
Every time I make this argument, manually-powered agency types argue till their veins bulge out of their foreheads, but the truth is in Return on Advertising Spend (ROAS).
Nor am I sure why anyone would even think of manually monitoring hundreds of thousands of keywords individually... not to mention that those keywords would surely be broken down into at least dozens of accounts if not tens of dozens... unless of course one is the likes of Amazon or eBay.
Neither can I relate to your math in point since Pareto's (80/20) principle seems to disable most exponential functions one might project, although I think you mean 5 x 1,000 rather than 5 to the 1,000th power.
I know that in my case, even with accounts of 2,000 keywords, volatile bidding generally only occurs with a handful of keywords which might require intensive monitoring, and then only periodically. And generally I'm only concerned with 3 positions of which I'm perfectly content to settle for 2nd or 3d positions in many situations...more of an 'opportunistic bid strategy' which requires little if any subsequent bid adjustments with the majority of my keywords.
No vein bulging argument here, however. I'm ambi-dextrous personally... and I find a harmonious balance between manual and auto... Life's sort of like that don't you think? :)
Further, the only way you can play the game well is to know what the click is really worth to you. If you don't know that, bidding games are just a waste of time.
It doesn't matter whether you're automated or manual if you don't have an intelligent bid strategy.
Unfortunately, or perhaps fortunately depending upon your perspective, there are a lot of novice bidders who don't have a clue at either.
It's pretty pointless to be spending lots of time changing bids in reaction to each other. When you get into one of these games both players are best off trying to find a point of equilibrium where they can settle down and stop reacting to bid changes.
Volatile bidding on the other hand more often occurs when several bidders are vying for position, or simply to remain within the top 3 (or 5 or whatever their objectives are)...and then other, often more complex factors come into play. Again there are too many variables to make generalizations. And you're usually a step ahead of your competition when emotions are left out of the bidding process.
a) doesn't have access to regular ROI data
b) can't take ROI data for their keyword set and extrapolate bidding strategy from it
c) doesn't know what their business goal is
If you have access to historical and actual ROI data, keyword-level tracking and a clear, consistent business goal for your entire keyword portfolio, you should be able to put the entire thing on autopilot and have it run itself. That's what we do, and while we may be out-bid on any one keyword, for the hundreds of thousands of keywords we manage we're killing the competition due to the advantages of an automated closed-loop feedback system over a manual one.
I do feel that everyone who's manually intervening in keyword bidding either
a)doesn't have access to regular ROI data
What does ‘having access to regular ROI data’ have to do with automated ’bid’ management vs. manual intervention when and if needed? As in your previous post you seem to be mixing ‘bid management’ with ‘analytics.’ They may be integral in a decision making process but are completely independent functions.
If your autoscript does the job on all your highest performing keywords, great. If and when it doesn’t and you don’t intervene, you’re wasting money and otherwise doing your client a disservice while trying to justify your automated/impersonal service, which in effect purports that the “average” dictates your response, over your client’s individual interests.
b)can't take ROI data for their keyword set and extrapolate bidding strategy from it
‘Applying’ ROI data, however significant, is just one aspect of many factors of a bidding strategy, one that usually precedes competitive bid analysis.
c)doesn't know what their business goal is
No disrespect intended, but that’s preposterous. You’re saying that JUST because one chooses to manually intervene, even periodically with their automated bid management program, they don’t know “what their (his) business goal is?” :o
…you should be able to put the entire thing on autopilot and have it run itself. That's what we do, and while we may be out-bid on any one keyword, for the hundreds of thousands of keywords we manage we're killing the competition due to the advantages of an automated closed-loop feedback system over a manual one.