Economic forecasters remain split on the odds of a U.S. recession in 2023 or 2024. Some think a recession is a foregone conclusion. Others believe it’s likelier than not the current slowdown will turn around before it becomes a proper recession.
But some industries, like marketing, are already on recession footing. Enterprise firms slashed marketing budgets in 2022, and experts expect even deeper cuts in 2023. Marketing departments and third-party marketers alike are being asked to do more with less this year.
That’s driving them to adopt long-deferred strategies to cut costs and boost efficiency. The good news is that these strategies are easier than ever to implement and execute at scale thanks to powerful new data analysis and marketing automation tools like those offered by Optmyzr. Optmyzr’s custom PPC automation tools are particularly valuable for marketers shifting to value-based bidding (VBB), a bidding strategy for pay-per-click campaigns that accounts for each click’s actual value to the advertiser (rather than Google’s best guess).
When implemented across multiple campaigns and platforms, and backed by Optmyzr’s custom automation tools, VBB can improve PPC performance and boost ROI. Let’s see how VBB works, how the right toolkit can enhance it, and what an integrated VBB strategy might be able to do for your PPC campaigns.
What Is Value-Based Bidding?
Value-based bidding is a PPC marketing approach that values leads and conversions based on overall quality. Thus, their potential value adding to your business. You value PPC bids accordingly.
Value-based bidding contrasts with — and is an improvement upon — traditional conversion-based bidding strategies. In conversion-based bidding, you care about conversion (or lead) volumes rather than quality, which often results in a large pool of relatively low-quality prospects instead of a comparatively small group of prospects more likely to follow through with a sale.
VBB gives ad engines like Google more information about the value you place on your traffic and leads. Google has a lot of useful information already. Plus, it’s always learning how to extract more from signals sent by marketers and their prospects. But there’s also a lot it doesn’t (and can’t) know on its own. This includes offline conversions or the relative value of prospects in two different geographical areas.
Optmyzr’s four-point framework for effective VBB covers:
More, Better Data
VBB is most effective in a data-rich environment. Marketers must use tools provided by Google and third parties like Optmyzr to help Google understand how your customers convert online and off. Optmyzr recommends defining conversions through an “intent” lens, with the focus on higher-intent actions like downloading a report or submitting a request for a quote. Use Google’s Offline Conversion Imports tool to reveal “IRL” conversions, like onsite work estimates (common in construction and home services) and in-store transactions (common in retail).
Differential Conversion Valuation
Optmyzr recommends passing conversion valuation data back to Google as frequently as possible. Estimates are fine. The point is to give Google a good sense of the relative value of different conversions. This helps it optimize your PPC bids.
Conversion Value Rulemaking
Optmyzr encourages marketers to use Google Ads’ Conversion Value Rules feature. This values traffic based on three attributes: location, device, and audience. It produces surprisingly nuanced information that can improve ad targeting and ROI, for example, “traffic from newsletter sign-ups is 15% more valuable” (audience) and “desktop traffic is 60% less valuable” (device).
Smart Bidding Strategy
VBB only works when you choose “Maximize Conversion Value” in Google’s Smart Bidding architecture. According to Optmyzr, you should only select “Maximize Conversions” if you’re selling a single product type or can’t differentiate your leads.
How Optmyzr’s Custom PPC Tools Harness the Power of Value-Based Bidding
Value-based bidding is simple in theory but difficult to execute effectively in practice. This performance gap exists in large part because Google (and other PPC platforms) aren’t set up for seamless VBB. They’re smart enough to execute it with enough data. The problem is collecting, interpreting, and feeding all that data back into their ad engines.
That’s where Optmyzr’s custom PPC solution set comes in. Marketers can use five Optmyzr tools in particular to maximize VBB ROI:
- Segment Explorer: Segment Explorer enables a broader view of your audience segments than Google Analytics’ default settings allow. The results: greater at-a-glance visibility into your PPC campaigns’ performance and easier conversion valuation.
- Segment Scorer: Optmyzr’s Segment Scorer allows you to rank audience segments by value, feed this information into Google’s Conversion Value Rules, and refine your Smart Bidding performance.
- Optimize Value Rules: This tool suggests bid magnitudes for Conversion Value Rules based on Segment Scorer rankings. This gives Google valuable data that ultimately enables more flexible and “accurate” Smart Bidding
- Rule Engine: Optmyzr’s Rule Engine lets you build customized Google Ads workflows with an eye toward reducing wasted spend, eliminating irrelevant components, or any other efficiency/ROI-oriented goal.
- Campaign Experiments: This is your digital dashboard — or mad-science lab, if you prefer — showing every past and present PPC experiment. It’s a massive knowledge base that can improve your PPC ROI over time. And, it’s not found anywhere in the Google Ads suite.
The Value of Value-Based Bidding: What to Expect From an Integrated VBB Strategy
If you’re basically okay with your current PPC marketing strategy, is it really worth switching to VBB? After all, no matter how well custom PPC automation tools like Optmyzr’s work, you and your team still have to learn how to use them effectively. This takes time and energy you can surely spend elsewhere.
We’ll save you the suspense: It is indeed worth adopting a VBB strategy for these compelling (and closely related) reasons.
More Data and Insights About Current and Future PPC Runs
Value-based bidding (and a value-based marketing mindset, more broadly) generates additional data and facilitates deeper insights into your PPC campaigns. For example, by reporting offline conversions back to Google, you provide its Smart Bidding architecture with valuable information it wouldn’t otherwise know. And that information becomes part of your library of PPC learnings, the better to refine future campaigns.
Better Optimization Between Conversion and Sale
When used in conjunction with Google’s Smart Bidding architecture, Optmyzr’s VBB-enabling tools enhance the post-conversion process and increase the proportion of converts who actually follow through on a sale. This is particularly useful for marketing funnels where customers convert relatively early in the sales journey as it improves traffic quality, sale potential, and ultimately lead value. The result is a big improvement over approaches rooted in lead volume rather than lead value.
More Flexible, Responsive PPC Campaigns
By making it easier to identify high-value keywords and adjust bids in real time, Optmyzr’s VBB-enhancing tools enable more flexible and responsive PPC campaigns. This is a more dynamic and ultimately more lucrative approach than the status-quo approach, which iterated new campaigns based on lessons learned from the previous.
Let’s take a step back.
Value-based bidding is a clear improvement on traditional quantity-based PPC strategies. It’s no exaggeration to say it’s the future of PPC marketing.
Google and other PPC platforms have a growing array of tools to assist with VBB, but third-party solutions like Optmyzr help make sense of the process and maximize performance. From higher-quality data and better campaign optimization to more in-campaign flexibility and higher overall ROI, their value is self-evident. And if you’re trying to keep pace in this fast-changing space, they’re all but essential.
