When it comes to paid media, there are a myriad of options starting with selecting the right agency partner all the way down to your advertising channels. Selecting whether or not to use a PPC bid management tool (oftentimes selected for you by way of selecting an agency), is usually high on the list. There are many tools on the marketplace (Kenshoo, Marin, agency-owned) that are backed by numerous whitepapers touting success in specific industries, while many experts swear by sticking with native advertising platforms. Here are the pros and cons of using bid management tools and the different scenarios where one might make the most sense.
Why do Companies and Agencies use Bid Management Tools?
Running media across multiple search engines (Google, Bing, Yahoo) and social channels can be time-consuming and confusing. It takes time to log into each tool, manage ads, and change bid strategies based on the platform you’re using. Additionally, most of these platforms don’t automatically share audience data, so analytics analysis across platforms can be complex if you don’t have strong data and analytics talent on hand to analyze campaigns.
Furthermore, some agencies and brands feel as though advertising companies like Google or Facebook can’t possibly be optimizing for conversion when they’re more focused on driving profit for themselves.
The Long and Complicated History of Bid Management Tools
Bid management tools provided a large competitive advantage when targeting methods were more rudimentary. In the early days (circa 2000), Google Ads (formerly known as Adwords) wasn’t set up to optimize ads for conversions. Advertisers were stuck with overly simplistic cost-per-click targeting options, and Google Ads Editor was too basic for many bulk edit capabilities. Early Facebook Ads had a lot of data inconsistencies, especially when a brand would compare site traffic to ad clicks. This opened the door for bid management companies to develop sophisticated software targeted to agencies and brands looking to simplify paid media management and gain efficiencies.
Now, many of the problems bid management tools solved no longer exist, and it would be difficult for them to outspend tech giants like Google and Microsoft in terms of audience targeting capabilities. Google has spent the equivalent of a small country’s GDP on platform development and user experience, and Google Ads is no longer as difficult to use.
The Advantages of Going Native
Google has spent much more time and money building out its bidding strategies, and it is working with a lot more user data than any bid management tool could ever have. You can build campaigns around a targeted CPA (cost per acquisition), targeted ROAS (return on ad spend), maximizing clicks, maximizing conversions, and more – AND you can do it with a lot more user data. Building a layer on top of Google’s powerful AI is unnecessary at best, and potentially harmful when you’re up against advertising competitors who are able to unleash Google’s bid targeting to its full potential.
The API development that these bid management companies rely on cannot possibly catch up to the new features advertisers have access to in some cases. As an example, when Google launched Discovery ads, Google Ads Editor was updated quickly to accommodate this new ad type. Bid management tools will always be left playing catch up to accommodate new ad types and features.
In theory, bid management tools should be easier to use than native platforms. Oftentimes they aren’t, and they require hundreds of hours in training time and set up. These are precious weeks that your company could be focusing its efforts on advertising and analysis in up-and-running native advertising platforms.
Lastly, the greatest loss is frequently in analytics and the ability to make important decisions. Switching to a bid management tool means losing visibility into your historical data- which will restart with the new platform. Many agencies and tools also tie data together- such as looping Facebook/Snapchat/Instagram into one “social” channel. When that happens, you’ve lost the ability to see where your dollars are going furthest. This can actually be an advantage for some brands who don’t want to “peek under the hood,” but it will be a hindrance to those looking to gain insights from reporting.
If you are a company that suffers from “information paralysis,” and you don’t plan to focus strongly in data and analytics, a bid management platform could make sense for your brand. But if your team relies on in-depth analysis, or if you’re in a highly competitive space, native platforms might be the best way to go.
