Understanding the Online Bid Process
A second important element of online lead-generation advertising is the online bid process. Online lead-generation advertising works like an auction. When you post online ads, you make a PPC (or CPM) bid for how much you are willing to pay each time someone clicks on your ad. Your bid is used to determine how often (or how highly placed) your ad will be served. Advertisers compete with each other by offering different PPC (or CPM) bids for each ad they post. The ads with the highest bids get the best placement or highest positioning.
The bid process is used with:
Search Engine Ads: On Google and Bing, advertisers bid a PPC rate for certain keywords and keyword phrases (e.g., “office Realtors in Atlanta”). Search engine ads with the highest PPC bids get placed in the “ad spaces” at the top of the natural search results list, or in the margins on the side of the page, when someone searches for those keyword terms.
Social Media Sites: On Facebook, LinkedIn, and Twitter, advertisers bid a PPC rate to have their ads displayed to certain target demographics (e.g., Facebook users ages 20–25 who are married or engaged). You bid a rate for each ad you post, according to the target demographics you choose. In general, the highest-bidding ads appear first on the Facebook pages of users in the selected target demographic. (LinkedIn also gives you the option to bid and pay by CPM rate.)
Some Display Advertising: Some websites that offer display advertising use the bid process, allowing advertisers to bid PPC or CPM rates. Ads with the highest-bidding rates get the most coverage, or get placed in premium ad spaces on the website.
Note: Not every website that sells display ad space uses the bid process. Many sites or content networks simply sell you available space.
When you set up your ad campaign, the search engine, social media site, or website will ask you to give a PPC (or CPM) bid for each ad you post. Again, with a PPC bid, you pay a certain amount (e.g., $2.50) to the search engine or site each time someone clicks on your ad. (With a CPM bid, you pay a certain amount for every 1,000 times a webpage or social media page presents your ad, regardless of whether someone clicks on it or not.)
You can bid any PPC or CPM rate to have your ad placed on these search engines or sites. But the higher you bid, the better positioned your ad will be. In general, only the ads that represent the highest bids will be served, or given top space, on search engines, social media sites, or websites.
For example, on a search engine, ads with the top five to seven bids will be placed in the premium ad spaces at the top or in the side margins of the first page of natural search results for the keywords (e.g., “office Realtors in Atlanta”) for those ads. Ads with lower bids may be placed in the ad spaces on the second or third page of search results, where they are less likely to be seen.
On social media sites, only the ads with the top five bids are served on the page of a user within the target demographic (e.g., Facebook users ages 20–25 who are married or engaged) when the user logs onto their page on the site. Ads that bid a lower rate may not be served at all.
Fortunately, there are ways to use the bid process to maximize the effectiveness of your online ad campaigns. I’ll provide more information on how the bid process works for each of the online lead-generation advertising tactics in Chapters 7–10.