If you participate in a PFP (Pay for Placement) ad program such as offered by Overture or a few other companies, bid management tools (BMT) can simplify your life quite a bit, while at the same time, they might help increase your ROI.

Bid management tools can automatically adjust an advertiser’s bids and positions on PFP search engines, and can sometimes spell the difference between an advertising campaign that fails and one that will be a true success.

But before we delve into the finer details, let’s first see what BMTs are and how they work.

What bid management tools can do
First, most of the popular BMTs offered today are of the ASP (Application Service Provider) variety, meaning they are offered in an online web services format. Some of the biggest names in that market are GO TOAST, Did-it.com, BidRank and a few others. Additionally, it’s important to note that a few of these vendors track trusted feed listings as well.

After you’ve done your research on the best BMT and after you’ve decided which company will win your business, whatever you do, make certain that your BMT vendor is authorized to manage the actual search engines in your specific marketing campaign. Only authorized vendors can have their bid management tools directly access search engine’s ad-serving software. This is important, since it is required for the tool to work properly, and to output accurate campaign results.

One place where you can start looking for such an authorized vendor is Overture. On the Overture website is a list of third-party approved vendors that fit that description.

However, as is sometimes the case with ASPs, BMT software can also be purchased instead of leased. In certain cases, buying software directly can be less costly; however, you generally don’t receive the same kind of human support you do when dealing through an ASP, although this can vary greatly from one vendor to another.

For example, a few bid management companies do more than adjust listings according to advertiser’s desired bids or their ideal positions. Two such vendors are Did-it.com and Go Toast and, on top of offering BMTs, they have also developed ROI bid management and bid optimization programs.

Some of BMTs best features
Some bid management tool vendors can help you initiate your marketing campaign on both PFP and trusted feed programs. You simply specify the search engines you want included in your ad campaign. Once that is determined, they can help you with other parts of your ad campaign, such as keyword and key phrase identification and analysis, copywriting, optimization and even URL generation tracking services provided by Rank for Sales.

Another important feature of some BMTs is notification of certain paid listing errors in some cases. If you have broken links in your site, or if you happen to have a link pointing to the wrong landing page (it happens sometimes), BMT vendors can help you by notifying you in advance - saving you some money. For companies that don’t run an ROI system in-house, a good bid management tool can help them.

One or two BMT solutions mentioned in this article have the built-in capability to accurately track other online or Internet ad campaigns, if certain conditions are met.

Other notable BMT features
A good bid management tool with ROI optimization can easily adjust your listings according to your CPA (cost per acquisition) goals. By utilizing some of the bid management programs offered by Go Toast or Did-it, for example, you can set $10 or $12 or a higher limit to the maximum you are willing to pay a search engine for a sale. The choice is yours and also may depend on what maximum amount your competition is willing to bid on, if any.

However, one piece of advice: remember that you could have to increase your CPA maximum if your position ends up being quite below than your competition.

One important feature and a ‘must have’ on any ad campaign manager’s list is the importance of relying on a bid management tool that reports in real-time, since some of them do not. Before you sign on the dotted line, you should ask your prospective BMT vendor if they do, since this can alter your results quite a bit in certain cases.

Difficulties of certain bid management tools
Some bid management tools may present a trickier pricing model and is riskier to accurately evaluate, since there are so many available options to choose from. Again, companies need to do their homework carefully on this.

Some confusion sometimes arises when comparing bid management vendor’s costs. These ASPs (Application Service Providers) could charge you a percentage of your total ad cost, or a certain flat monthly fee, a PPC rate, a per number of keywords rate, or any combination of any of these. Rates vary a lot.

To some advertisers that are new to this, costs may seem high. For BMT vendors like Did-it or Go Toast that optimize paid listings for maximum profitability, their fees should normally be recouped in the higher profits and the greater ROI you are expected to benefit from their efforts.

Remember that with most bid management tool vendors, you should always negotiate for the best rate possible.

One word of caution before I close on the topic of bid management tools: if you choose to purchase your own BMT software, one difficulty might be frequent downloads to ensure the latest version available, or issues with a temporarily out of service server.

For companies with large advertising budgets, these temporary software glitches or problems could become very costly setbacks in some cases. For large advertisers or for big ad campaigns, it might be best to choose a bid management tool offered under the ASP format.