Businesses and marketers are always looking for ways to modernize their PPC optimization. In your quest to do so, you might have heard about value-based bidding. This is a technique used to teach the AI systems used by Microsoft and Google about the types of conversion that matter most to your business. When used together with responsive search ads and automated bidding, the ad platforms at the two companies can focus on getting you the best conversions, which will help you get more out of your PPC and ad budgets.

Understanding Value-based Bidding

The idea behind this technique is that your automated bids should depend on the value that the clicks add to your business, as well as the conversions you get out of it. The results are achieved through instructing the AI on the value of the conversions you get and want to get.

The reason why this is such an important strategy is that automation is the new way of doing things, including running PPC campaigns. When these AI systems and machines are fed incomplete goals or bad metrics, you risk ending up with poor results, and you enter a vicious cycle where you keep doing it over and over again, never seeing the results you wish.

In short, the machine learning algorithms used by Google and Microsoft will only give you great results if you tell them exactly what you are after and what types of results matter to you.

Using Conversions Data to Optimize PPC

When teaching machine algorithms the value of conversions, the first thing you need to do is teach them what happened in the weeks following the first conversion.

One way of doing this is by capturing the Microsoft Click ID or Google Click ID, both of which are passed in the URL when a user clicks on an ad, adding it to your customer relationship management system, and then sending it back to the ad engines used by both, so they understand the value of the click and if there was conversion.

Google has introduced its Enhanced Conversions for Leads, which allows you to do the same thing but is a much simpler system. Using it also means you do not need to capture any of the IDs identified above.

Although retailers can do the same thing, there is no need to as they can use their own order IDs. Once the value of the sale or conversions is clear, they can feed this information to the machine learning algorithm.

A New Way of Optimizing PPC

The method described above is quite technical and challenging to implement. The easier way of doing this is known as Conversion Value Rules. When using this technique, you only need to tell Google how to judge the value of a conversion depending on a set attribute such as location, type of audience, and device.

Although this is not as powerful as the technique discussed above, it is an easier way of teaching the machine and helping it understand how to prioritise the types of conversions that are important to your business.

In the crowded PPC and ad space, businesses and marketers should use automation to edge out their competition. They can start by focusing on bid management and move on to moving different levers to achieve better results. Value-based bidding is true evolution when it comes to improving bidding and thus conversions.