daniel gilbert - how to build your own automated bidding system in less than 6 weeks

@danielgilbert44

How to build your own automated bidding system in less than 60 weeks

@danielgilbert44

Hi, I’m Dan Gilbert

• 40 Super-geeks• “Best PPC Agency in the world”*

*According to a Survey of me

@danielgilbert44

Coming to #mktfest

@danielgilbert44

Automation is not optional

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A basic AdWords account with 10,000 keywords has a trillion bidding possibilities every single day

@danielgilbert44

Problem with 3rd party toolsNot responsive enoughNot up to dateNot bespokeLots of stuff you don’t need

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@danielgilbert44

Be More Responsive

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@danielgilbert44

• AdWords restricted to 6 bidding windows

• 3rd party tools make 4 changes max

• Overall ROI increase of 11% for Domino’s Pizza

http://bit.ly/1GwKN1Z

24/7 Bidding

@danielgilbert44

• Mobiles are different at different times

Adjust mobile bids hourlyHour Monday Tuesday Wednesday Thursday Friday Saturday Sunday

0 157% -41% 59% -7% 74% -17% -5%1 -36% 11% -79% 96% 72% 3% -52%2 58% -41% 103% -22% -40% 19% -28%3 36% 240% -33% 153% 468% 22%4 -66% 362% 221% -36% -88%5 -11% 153% 122% 215% 140%6 66% 31% 18% 39% 219% 18% -3%7 20% -53% -2% -11% 18% 26% 2%8 12% 18% -1% -5% 63% 17% -29%9 -11% 13% 7% 42% -26% -29% -54%

10 30% 5% -12% 40% 29% -30% -15%11 16% -31% 36% 37% -14% -23% 30%12 94% 20% -2% 8% 41% -37% 34%13 -25% -21% 32% 17% -29% -11% -15%14 -23% -17% 13% 3% 46% -6% -15%15 1% 0% 20% -10% 25% -15% 5%16 -4% 14% -17% 10% 15% -16% 4%17 6% 10% 8% -3% 58% -26% -29%18 1% -13% -5% 77% 41% 6% 36%19 27% 13% -5% 3% 8% -1% -11%20 -1% 3% 9% 23% 63% -16% -9%21 -5% 4% 31% 23% -29% -13% 2%22 -31% -3% -3% 25% 110% -17% 18%23 7% 13% -21% 33% 21% 3% -37%

Mobile

Desktop

•http://bit.ly/1GwKN1Z

@danielgilbert44

• Free script available here: • http://selnd.com/1MT8P8d

Check your own data

@danielgilbert44

• AdWords is an auction

• 3rd party tools make 4 changes max

• Overall ROI increase of 67% for alpharooms

• http://bit.ly/1IcQDAF

RTB to position

@danielgilbert44

• Call centre demand changes

• 3rd party tools make 4 changes max

• Overall CR increase of 17% for Chill Insurance + 32% reduced spend

• http://bit.ly/1IcQDAF

Bid to respond to demand

@danielgilbert44

Stay Ahead

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@danielgilbert44 13

“There were over 1000 changes to AdWords last year” - Me, now

@danielgilbert44

• Released in Marin March 2014

• Accessible via OpenWeatherMap

• Overall Conversion increase of 14% for alpharooms

• http://bit.ly/1KEKGwc & http://bit.ly/1PMCVcO

Adjust bids based on the weather

@danielgilbert44

• Still not visible in most 3rd parties

• None ready for custom audiences

Bid for locations & audiences

@danielgilbert44

You are special. Why?

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@danielgilbert44

Learn about your business

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@danielgilbert44

Test and Learn

18Tim Harford - http://bit.ly/1RATBEt

@danielgilbert44 19

Element Keyword Level Optimisation Account Level Optimisation

Bid change decision Each keyword is bid according to its own value prediction.

Optimize target metric total for portfolio of keywords.

Ability to set portfolio level budget and efficiency constraints.

Total cost and target predicted for each keyword at different bid levels.

Rapid reaction to seasonal trends in data.

Longtail management Clustering algorithms used to create predictions for tail terms.

Mobile Can be optimised at AdGroup level

Data Requirements 10 conversions in 90 days1 conversion in last 7 days

10 conversions/day100 clicks/day

What about for algorithms?

@danielgilbert44 20

bid < (conversion rate) x (Max CPA)

bid > (conversion rate) x (Max CPA)

bid < (conversion rate) x (Max CPA)

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Example:

Bidding is pretty basic

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PID example

o Make your own lookback windows

oThese sample weights gives us a weighted predicted conversion rate of 13.5%

oTherefore, MaxCPC = Conversion Rate * MaxCPA = £5.40 * 13.5% = 73p

Conversion rate period7 Days 14 Days 30 Days

[pokemon meetups] 7% 14% 28%

Weighting 9% 90% 1%0 2 4 6 8 10 12 14 16 18 20

Look back period

Relative weighting

Choose your own lookback

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o For keywords without significant historical data our bespoke clustering algorithms group relevant keywords.

o Longtail terms such as [increase my pokemon collection anonymously] present a data problem.

o Use three-dimensional clustering for longtail terms. A simplistic illustration:

Data from campaign level – or product category

Data from behavioural clustering

Data from semantic clustering

Not enough data at keyword level

Make your own clusters

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Test weightingso We construct weightings across the different clustering dimensions.

o This table shows suggested weightings for the keyword [dkny dress for my lovie dovie].

Clusterdress dkny Semantic

(in/for)Conversation 8% 13% 2%

Sample weighting 15% 80% 5%

o Calculated weighted conversion rate: 17%

o MaxCPC = £7.80 * 17% = £1.360 2 4 6 8 10 12 14 16 18 20

Look back period

Relative weighting

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The magic – A/B test it

0 2 4 6 8 10 12 14 16 18 20

Clustering A

Look back period

Relative weight-

ing

0 2 4 6 8 10 12 14 16 18 20

Clustering B

Look back period

Relative weight-

ing 0 2 4 6 8 10 12 14 16 18 20

PID Loop B

Look back period

Relative weight-

ing

0 2 4 6 8 10 12 14 16 18 20

PID Loop A

Look back period

Relative weight-

ing

http://selnd.com/1Chx7PH

@danielgilbert44 25

The magic – A/B test it

• I know I get better conversion rates in London but should I increase bids there?• Which is the best bid management software for me?• Am I using the best campaign structure?

• Is my PPC agency any good?

http://www.brainlabsdigital.com/brainlabs-tech-stack

@danielgilbert44 26

The End!

daniel.g@brainlabsdigital.com@danielgilbert44