Robin Zagers graduates on a decision system for Google Adwords

Advertising within search engines, such as Google, is a growing market. Sponsored hyperlinks appear besides the results where one searches for. This makes goal-oriented advertising possible. For many keywords there are several advertisers, this results in a growing competition. When a company wants to advertise on several keywords, it is difficult to manage this well. Gladior manages the advertisement campaigns for different companies. By the quantity of companies it is almost no longer possible to manage all advertisements by hand. Therefore there is a need for Gladior for an automated system for managing adwords campaigns.

For this purpose a bid management system has been developed. With this system it is possible to specify the requirements for a specific advertisement: a minimum number of visitors a week, a stable position in the list of advertisers, or a stable average price per click. These requirements determine the boundaries for the price, so that the price can be raised or reduced depending on of the behavior of the competition at that moment. For each campaign a list of advertisement words (Adwords) is collected. For each Adword the performance is requested. Based on the performance, the decision is made whether it is necessary to adjust the current settings. When an adjustment is necessary the new price is calculated and will be uploaded. In following paragraphs a closer explanation of the design of the bidmanagementsystem is described. The Google API makes it possible to down- and upload Adwords data. The requested data is then stored in a local database, after which a connection with other systems is possible. Several applications keep this information up-to-date, this makes it possible for the bidmanagementsystem to further process the data.

Processing the data starts with combining the Adwords-data with the requirements of the Adwords professional; the requirements the advertisement must fulfil. The requirements must be formulated in terms of the available indicators. This list of indicators can be extended. This information is stored in the database with management information. For each Adword the requirements are stored, they can be requested and modified at any moment. The required data from the database is selected using this management information. The selected data is used to make a prediction for the next period. This prediction is calculated using the single moving average algorithm. To prove that a different prediction algorithm has a better result then the single moving average algorithm, more data is necessary than is available at this moment. The new price can be calculated in several manners, the most simple method is raising and reducing the price with one cent. If more advertisers bid the same amount for the same Adword, this method has a large influence. Within one or two updates the desired situation is returned. With less advertisers, the difference between the Adword positions is more than a couple of cents. In this case reaching the aimed situation needs more updates. For evaluating the prototype, the working method of the Adwords professional is converted to an automated process. The evaluation shows that the bid management system realizes, for the managed Adwords campaigns, a decrease of the distance to the indicated goal. The collected Adwords- and visitor information makes it possible to calculate optimal settings per Adword. This can be used to react quicker and more accurate towards other Adwords.

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