Big Data: Key Metrics for Optimizing SEM Contextual Ads

Search engines like Google and Bing don't provide reporting that really shows you what you need to fully optimize ads and make adjustments. 

This is especially true for attributing Revenue to their cost reports.
Google and Bing both have APIs that allow your scripts to grab cost and placement fields.

Placements are the site URLs onto which Google or Bing will post your Contextual buys to in order to get "in clicks" for your web property. Instead of a keyword, you track a placement URL.

Google provides two types of placements:

1. Automatic -- it chooses the placement URLs that it thinks match your ad, chosen terms, and context -- thus the term "contextual"
2. Managed -- YOU choose the exact placement URLs that YOU think match your needs

Missing are the Key Metrics for Optimizing Contextual Ads:

1. Revenue
2. Margin (revenue - cost)
3. Margin % (cost / revenue)

It's no easy task to associate revenue to cost. A good back end system is needed.

Requirements:

• API grabs of Paid Traffic Google / Bing placement data --> into a file, every day for previous day's data.
• Similar grabs of Revenue associated with your website's revenue partners: like Google Adsense, Yahoo Sponsor Links, Commision Junction afflicate revenue. 
• Store this revenue into a back end database or file system 
• Create a method to associate the incoming traffic from your Google or Bing paid campaigns to the outgoing "clicks" on each of the above Ad Revenue partners: requires a custom click ID and traffic tag.
• Associate the  Paid Traffic from Google / Bing, to the Ad Revenue fields. 

The finished product is a report that roughly has the following fields:

• Placement URL
• Placement Type (Managed / Automatic)
• Impressions
• Clicks
• Cost
• Revenue
• Margin
• Margin %
• CTR
• RPI (revenue per impression)
• RPC (revenue per click)
• Campaign Name
• Adgroup Name

Key Metrics to optimize Placement Optimizations:

• Margin%
• Revenue
• Cost
• CTR
• RPI 

Conclusion:Takes sweat equity, but worth the effort: NO Bid Management system does it.