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Guidelines for your AdWords Bidding Strategy

Even though your AdWords bid is not the sole determinant of your ad rank relative to your competitors, it is a determining metric and it is completely under your control. When setting bidding strategies, do not simply arbitrarily allocate bids, think about this rationally and consider the following points:

#1. Do not set bids at even multiples of 10 – many people set their bids at even multiples of 5 or 10, such as $2.50. Bearing in mind that, all else equal, a higher bid will cause your ad to outrank that of your competitor, set bids that are slightly higher, even by 1 cent, i.e.: $2.51. This bid strategy can result in your ad ranking higher based on that 1 cent.

#2. Deleting keywords before reaching conversion benchmark – do not just delete keywords that are ‘not working’ before the keyword has reached a set benchmark of clicks. Set a benchmark of number of clicks that the keyword has to reach prior to deciding whether to delete it.

Even if a keyword only converts 1 in 100 clicks, that is a 1% conversion rate, which over the long-term may bring reasonable results. If your cost-per-click is not too high on the keyword and your margin on the sale is reasonable, a number of keywords with a 1% conversion rate may have a cumulative effect.

#3. Adjust bid by Cost Per Acquisition – think twice about deleting keywords that have produced at least 1 conversion, because if they have converted before, they may convert again. The trick here is to adjust the bid price until the cost per acquisition (CPA) becomes acceptable.

#4. Hitting Budget Max – if your daily ad spend is reaching its daily limit before the end of the day, you are leaving ‘clicks on the table’. In this scenario, resist the temptation to delete all the keywords that are getting the lowest number of clicks because they may currently not be appearing much on the search engines due to your budget max out.

Rather, lower the bids on keywords producing the most clicks to free up your budget so that you will be able to afford a greater number of lower priced clicks which ultimately return a lower cost on conversion.

#5. Do not ignore ads in lower positions – Do not assume that ads in lower ranked positions will not convert. Sometimes a large number of low rank keyword bids can deliver a large cumulative effect, especially if the keywords are not of enough value to bid up the price. Also set a benchmark for these types of keywords before deleting them.