Natalia Horst

Associate Director, PPC

What Your Paid Search Strategy Can Learn From the Stock Market

In the financial world, the faster one can achieve a position in the market, the better potential outcome there is for a return on investment. It is common practice to follow the moving average, which is a lagging indicator based on past prices. So what happens if you look at Google Adwords like a trader would look at the stock market?

Impression Based Bidding, or IBB, as I like to call it, is a philosophy we’ve developed at Rise that applies the principles of trading to a brand’s paid search strategy, with the goal of lowering the cost per lead.
When the moving average of a stock increases in any single direction, a trader’s objective is to purchase or short that asset and then follow the moving average’s direction. For example, if the moving average volume increased in a purchasing direction, one would want to enter the market by purchasing that asset as soon as possible in order to ride the increase in stock price.

Pay-per-click advertising has its own form of moving averages called impressions. Impressions represent searches that have triggered ads based on a certain keyword query. Impressions offer a way to gauge traffic patterns, similar to watching moving averages for financial assets. Say one of your keywords is “brunch.” When search traffic around brunch goes up, your impression volume increases. Maximizing bids and allocating budget to high conversion-producing keywords during top impression-yielding hours of the day (in this case, most likely weekend mornings) will give ads the best chance to capture clicks and conversions. Ultimately, this will lower your cost per lead. This strategy also allows you to potentially block out your competitors’ bids at peak times, furthering your return on ad spend.

Applying the IBB Philosophy to Your Paid Search Campaigns

To take advantage of an IBB strategy, brands must first do a historical data analysis. The goal here is to uncover the hours of the day the brand’s search ads are receiving the most impressions. As I mentioned, an increase in impressions indicates an increase in searches that trigger ads based off a brand’s keywords. To be most effective and identify meaningful patterns, brands need to have at least 60 days of historical data to analyze.

Brands should then set up ad scheduling or automated rules revolving around these high impression hours. As the average number of impressions increase in a given hour, keyword bids should be set to automatically increase during these set times as well. In our brunch example, you might see the most impressions on Saturday and Sunday mornings. In an IBB model, you would discover this with your historical data, and then automate rules in Adwords to increase your keyword bids during certain hours, such as 7 a.m. and 12 p.m.

With smart budget allocation, brands have the opportunity to appear at the top of the search results page during high impression-yielding hours. This helps brands to increase clicks — and potentially conversions — to assist in significantly lowering their cost per lead.

04/13/2015 at 04:25

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