For optimization we should consider various things from the beginning of Data collection period till the post launch.
Portfolio based bidding requires some data on bid units in a Portfolio to be able to analyze their performance at different bids and positions. This helps to predict their future performance.
The MORE the historical data points for bid units
The more accurate the forecasts made by the Adobe Technology
The better the bidding decisions made by the Adobe Technology
The smoother the performance right after Launch
We recommend a small Data Collection period (generally up to 2 weeks) for every new Portfolio before the Optimizer starts setting bids.
After a period of Data Collection, the Portfolio status can then be changed to “Optimized”.
(i.e. the Optimizer will set bids for all the bid units in the Portfolio)
This is called the Launch of a Portfolio.
If there is enough data, you can Launch a Portfolio.
That means you can change the status to “Optimized” and Adobe will set bids for the keywords in that Portfolio.
Some best practices related to Launch are:
Before optimizing a Portfolio, turn off any other type of bid management system that was being used on the Portfolio
Do not manually bid on keywords (unless absolutely needed)
Run Simulations* to understand the performance potential of the Portfolio and set the baseline.
Keep the default budget (i.e. the budget amount during the Data Collection period) to launch the portfolio and till it stabilizes. Do not make campaign structure changes before launch either.
Immediately Post Launch:
Expect to see a period of volatility the first 2 to 3 weeks after launch. The primary reasons for volatility are as follows:
Very few keywords may have been productive historically. Adobe will need to learn on all keywords to determine which keywords at which positions will contribute to the Objective set for the Portfolio.
Keyword history may be sparse and tracked for a very short time period – making the data Adobe has to work with not statistically broad.
Productive keywords may not have been very efficiently bid in the past. These keyword bids will be modified to find alternative, more efficient, positions resulting in some fluctuation in results for short periods.
We look at every keyword and how it is contributing to the Objective.
It is the marginal ROI of every keyword that is important, not the absolute ROI of the keyword.
Where would you spend your last dollar?
The Adobe Media Optimizer considers the opportunity cost of spending $1 on Keyword X, instead of all the other keywords in the Portfolio.
If that’s our last dollar, then the marginal ROI of Keyword X should be more than the marginal ROI that we will get from spending on any other keyword in the Portfolio.
The law of Diminishing Returns sets in for any Portfolio. In the example, investing an additional dollar at point C will not yield as much as investing in A or B. That is because the point of Diminishing Returns has set in by the time you reach C.
The returns on each dollar spent is greater at points A and B.
The Media Optimizer takes into consideration the Marginal ROI when computing bids for the keywords
Consider below points when setting constraints: -
Portfolio Limits/Constraints that can be set:
Max Bid Max Position
Min Bid Min Position
What should be considered when setting portfolio constraints?
The overall portfolio budget
If the constraints are really tight, the client may need to increase the budget to satisfy the constraints set
Impact of constraints on ROI
Setting constraints implies that we are controlling the way we bid on the keywords irrespective of the ROI. When we set constraints, we may notice a drop in ROI for the portfolio (given the objective set for the portfolio)
To start with, if your goal is achieving a target RoI, you can set RoI as the objective. Additionally,
Look at Keyword expansion opportunities from KW tool and Search term reports
Do a landing page audit and see if there is scope for improvement
You might like to run Ad copy and LP page experiments to further optimize
Analyse Revenue and Cost share by Match Type (Exact, broad, phrase) - try to achieve a higher share of exact match type, it will also improve customer experience. Adding Negative KWs whereever necessary will help.
Check Day of the Week spend and see if your spend and RoI fluctuates heavily over the 7 days - you might like to work on Day of the Week spend Strategy
Do some hygiene checks - disapproval's
Also, please note that since you are looking at a higher return don't focus solely on ranking higher. Ranking higher may not always help you drive a higher RoI.