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Bid management software for managing pay-per-click campaigns seem like a great idea. You tell the software what you want your campaign to accomplish, set up the ads, and let the software do the work of changing bids many times a day to accomplish your goals.

But it ain’t all it’s cracked up to be. And it ain’t what it used to be.

For one thing, the search engines, while making their API (application programming interface)’s more robust, are making access to them more difficult. Yahoo has placed restrictions on the number of calls that can be made to an API. What that means is that if you have lots of keywords in your Yahoo search marketing campaign, there is going to be a tight limit on the number of times that bids for those keywords can be updated in any given day. That’s the whole point of bid management software – to change bids.

Google, by contrast, has not such bandwidth limitation, but it charges for use of its API. We like to call it the Google tax. The current rate is a quarter for every 1,000 calls to its API. $.25 may not sound like much, but consider this: updating a single bid will likely require several calls to the API. If you have thousands of keywords that are all being updated 10 or 20 times day, that is many, many thousands of calls to the Google API. Over a month’s time, it definitely adds up.

But on top of the problems using the search engine API’s is the fact that bid management software generally works by making constant updates to bids to try and achieve some kind of specific metric, such as return on investment (ROI). If you guess about what the target metric needs to be, you could end up with bids that are way off. If you target an ROI that is too high, you may force the software into setting bids too low, which could end up cutting way back on the amount of traffic you generate. Likewise, if you target an ROI that is too low, you could end up paying more for your clicks than you need to.

The way to find out how you need to use your bid management software is by manually running the campaign for a while, doing lots of testing, and generating data. Once you have an idea of what your typical conversion rate is and what your profit is on a typical conversion, then you can determine what your bids need to be and what you can expect in terms of ROI. This kind of information is extremely valuable in figuring out how to configure your bid management software.

If you would like some profesisonal help in managing your pay-per-click marketing campaign, contact Work Media at 888-299-4837 or email Info@WorkMedia.net.