While the phrase "portfolio bid management" is widely used in search engine marketing, there is conveniently no precise mathematical definition for the portfolio approach. The "portfolio" term tends to be used to differentiate advanced bid management solutions from simple rules-based systems.
Portfolio vs Rules based bid management
At Core Bid Management, we always stress that the difference between true portfolio and rules based approaches to bid management is the scope of the data taken into consideration when making bid management decisions.
Rules based approaches have a "local scope", making decisions ignoring the rest of the advertising campaign. True portfolio based approaches have a "global scope" and evaluate potential decisions on bid prices and marketing budgets while taking into consideration each decision's affect on the whole marketing campaign.
Portfolio bid management
Only portfolio bid management systems will reward a high performing keyword by taking budget away from less lucrative areas of the ad campaign, creating an efficient high ROI overall bidding strategy, completely surpassing "local" rules based systems. Because of its "global" portfolio approach, Core's automated bid management solutions also accurately hit monthly budget targets and seamlessly distribute ad spend throughout the month.
As you can imagine, true portfolio based approaches are quite computationally complex. These are heavily influenced by portfolio management and risk analysis mathematics used in investment banking. Core Bid Management's algorithms have their distant origins in work that won the Nobel Prize for Economics. Email firstname.lastname@example.org to arrange a trial of our paid search bid management solutions.