Search Ad Complexity: Man vs. Machine

It would be nice if our lives would get easier over the coming months and years. Unfortunately, that’s probably not going to be the case.

Ad creation, media research, media targeting, real-time bidding, success tracking, ad testing, landing page testing, offer testing, segmentation modeling, strategy adjustment, campaign retrafficking, and spending reconciliation are all individually complex tasks. When they all must occur on an ongoing basis, it’s clear that running search marketing campaigns (as well as other campaigns that run through the search engine auction networks) requires a significant amount of resources. Unlike the early days of paid placement search marketing, this isn’t something you can do in your spare time.

The question becomes this: can these tasks be automated so technology is doing the heavy lifting, or is this a situation where human experts need watch and learn, applying creativity to challenges an automated solution could never achieve? For most marketers, the answer is that some combination of technology and people is optimal. The key is to select the right technology and the right team to manage, monitor, and deploy that technology.

A large team, even a dedicated one, is meaningless if it isn’t top notch, up to speed on SEM (define), and professional in its execution of a project plan. Sure, sometimes humans and technology can both accomplish the same tasks, meaning you can replace technology with additional human resources. Often, though, this is a foolish mistake. I’ve seen instances where marketing teams have made agency selection choices based to a large extent on dedicated headcount in the hope there might be a superstar or two at the agency who would be redeployed to their account. That’s a risky proposition to be sure, particularly given some agencies’ turnover. I’d also worry about an agency’s willingness to dedicate a superstar exclusively to me to win a contract, only to yank that person away when other clients complain or until the next pitch.

An example of humans being almost fully replaced with technology is bid management. The search engines have provided tools to marketers who want to manage campaigns through the standard online interfaces. Much functionality that once was available only in third-party bid management solutions is now showing up in the Yahoo Panama interface (which was rolled out to advertisers this week), Google’s AdWords, and MSN’s adCenter. Better budget control and bid control are becoming standard, engine-provided features. The engines also offer third-party providers sophisticated APIs (define) that allow for the execution of whatever formulaic campaign or bid strategies those third-party providers find appropriate.

Of course, those of us in the business of building technology have taken full advantage of engine-provided APIs and have adapted technology and service offerings to go beyond bid management into full campaign management solutions. As the engines make the black-box formulae that control position more opaque, there’s a need for more sophisticated technology that can be tuned and customized for more sophisticated marketers for whom the engine-supplied solutions are insufficient.

Regardless of what technology solution you use: engine-supplied tools, rudimentary third-party bid management tools, or a more sophisticated platform, one can’t discount the importance of expertise and the human factor. Even the engines understand campaign structure, including how AdGroups (I’m referring to any engine’s AdGroups) are populated; match types selected; negative keywords selected; and creative maximized, all still require the human touch. Larger advertisers may get some help from the search engines in these high-touch areas; others must rely on their agencies or do it in house. There’s no shortage of tactical to-do items in any campaign at any time, so it’s often a matter of prioritization for those running campaigns and strategies.

There are probably a whole bunch of tests that will help improve ad response and relevance. Moreover, each business is different, meaning there are strategic implications to SEM campaigns. They can’t be cookie-cutter solutions. Someone experienced in business and marketing must look beyond the day-to-day tactical work to explore the campaign’s strategy. Objectives used by the technology and tactical teams must always be aligned with the interests of the business as a whole. Business objectives can change based on season, competitive landscape, profitability, and management preference.

Some folks think complexity and the need for technology and smart marketers will dissipate as the engines and ad marketplaces simplify interfaces and add tools. Yet across the on- and offline advertising ecosystem one thing is clear: consumers control the ads they pay attention to and those they choose to interact with. So targeting and relevance must always improve. Technology can only do so much of the work. Your site and business must be in synch with your marketing campaign and in tune with consumers’ willingness to engage. That takes a smart campaign.

Herein lies the challenge. The SEM industry has a shortage of search-engine-savvy tacticians and an even greater shortage of search engine strategists. It’s simply too new to have created the staff needed by 500,000 search advertisers. This shortage can make building an in-house team a daunting task, even if the team’s primary function is to supervise external vendors (SEM agencies or technology companies). Clients and prospects regularly request my help in recruiting in-house staff (if you’re looking for a position, let me know). Realistically, you can’t supervise a vendor if you don’t know enough about its tasks and responsibilities to distinguish good decisions from poor ones or superb execution from mediocrity.

Take the time to make sure you know enough to do it yourself, even if you plan to delegate the actual tasks to others (internally or externally). That way, you’ll recognize the BS excuses. Over the next month, I’ll cover new SEM and SEO (define) educational opportunities deployed by the engines, trade associations, and private businesses.

In the meantime, use technology to automate as much as possible given your campaign’s makeup. Pull together a top-notch team internally and at your SEM agency (if you outsource), then focus on tactics and strategies that can make a difference. If you correctly prioritize tactics, tests, and strategic initiatives, you’ll progress. Rally for the required internal and external resources.

It’s not about a body count or a hands-off, set-it-and-forget-it technology. It’s about the right team of internal (and/or external) people and the right technology for your business. Everyone’s needs are different, so know what you need for your business and keep track of what the engines are rolling out. More precise targeting and more ad formats (such as video, rich media and audio) won’t make your life easier.

Nominate your favorite product or campaign for the 2006 ClickZ Marketing Excellence Awards, October 16 through close of business (EST) on October 24. Final voting begins on October 30.