How To Manage Bids In Paid Search

How To Manage Bids In Paid Search

 

Bids are set at the maximum you are willing to pay for a click in the bid auction. Sometimes you’ll pay a little more or less than your max bid and this is because when an ad enters the bid auction, a number of factors are taken into account in order to serve the ad: In this article, I want to look at ways that we can manage bids in paid search. Here are some of the things that you need to note:

 

  • The max CPC of competitors bidding on one keyword: the is the most influential factor, how high an advertiser is willing to pay for a click. The number of advertisers competing for a keyword drives up the price paid for a click in relation to there max CPC bid. This will vary across verticals and seasonality.
  • Your quality score for that keyword vs. your competition: if an advertiser has a good quality score they pay less for a click than a competitor with a lower quality score as Google rewards advertisers with good quality scores
  • Estimated CTR: this is determined by Google
  • Landing page relevance: relevance to search term and ad (as determined by Google).

 

NOTE: it’s important to align keywords, ads and landing pages when determining how much you’ll pay for a click.

bidding in paid search

To test the effectiveness of your quality score, hover over any keyword and a pop up will appear which will give you the quality score for that keyword. It will also show you the estimated, broad stroke standard for the three main factors for quality score, which are expected click-through rate, ad relevance and landing page experience. If it’s average, below or above average, that will give you an idea of what you need to improve to drive a better quality score.

There are also other considerations for how Google rates your landing page when deciding on quality score. This is calculated by Google Ads using a number of key indicators like:

  • Language
  • Device optimization
  • Speed

All of these factors determine whether Google Ads will look favourably on your landing page in terms of quality score.

 

 

NOTE: CTAs and conversion actions on the landing page are up to the website to implement.

 

Different bidding in paid search will have different costs and performance levels:

  • CPC bidding: If your focus is purely driving traffic, CPC bidding is the best. CPC is the most common bid type on AdWords/Search but you can use flexible or advanced bidding options to work towards certain goals
  • Enhanced CPC (eCPC): tells AdWords to raise your bids by up to 20% if it believes, through historical data, that you are likely to get a conversion from this click
  • Maximize conversions: is an automated bid strategy where AdWords uses historical data to try to drive the highest number of conversions for your daily budget
  • Maximize clicks: is another automated bid strategy where AdWords attempts to drive the highest number of clicks for your daily budget
  • Target CPA: is an automatic bidding type where AdWords uses historical data to drive conversions at a predefined CPA – you need a minimum of 15 conversions in 30 days to use target CPA bidding effectively. If your drive is alot of conversions or sales each month, you can test target CPA to see if Google’s automated conversion bid algorithm delivers lower cost per conversion or more conversions at a lower cost each month.
  • Target ROAS: is for e-commerce sites that records revenue metrics in Google Ads. In this case, Google uses the ROAS ratio (return on ad spend, revenue/media) as the metric to optimise towards when it automatically sets bids.
  • Target search page location: is an automated bid strategy that aims to drive as many impressions in the first position.
  • Target outranking share: is an automated competitor bid type that aims to serve ads in a higher position than a
  • competitor’s website (set by you).

 

Your budget is basically the sum of your clicks and there CPC. You can aim to reduce CPC by increasing your quality score by doing the following:

  • Write better ads
  • Improve landing page
  • Add negative keywords to increase relevance – this makes the search experience more precise
  • Test bid thresholds – is it manual CPC?

 

  • The Bid Simulator collects and analyses data from ad auctions on Google from the previous seven days, while considering information such as the quality of your ads, your competitors’ bids, and product data.
  • It than uses this information to estimate how certain changes to your bid might have impacted activity over the previous week. For instance, it estimates the clicks, costs, impressions, and conversions your ad would have received had you used a different bid.

 

 

  • The Bid Simulator tool is useful because it is an automated tool that helps marketers take the guesswork out of setting bid thresholds by providing estimated results and costs for this.
  • It gives very helpful insights into how bid changes could affect your results.
  • Bare in mind however that the data it shows is based on the previous seven days history, which is not always a good predictor of future activity.
  • If you’re using the bid simulator at the campaign level, it has a bid scaling feature so you can see what might happen if you increase or decrease all of your bids by a certain percentage.

NOTE: Use the Bid Simulator tool by clicking on the small graph icon (when available) beside the keyword bids to explore how bid changes could impact your search network traffic.

 

  • There are a number of metrics you can use to decide on bids. An important one here is impression share: the number of times your ad shows up when someone searches. For example, if you have 100% impression share, you will show up 100% of the time every time someone searches for that keyword.
  • You can add the metrics est. first position bid (what you need to bid to be on the first position of the page) and est. first-page bid (what you need to bid to be on the first page) to your AdWords columns. By setting a bid between these two estimates and settling on a level you are comfortable with, you can determine where you will actually feature on the SERP.
  • Remember you won’t spend more than 20% higher than your daily budget, this contains your spend limits.

 

  • You can set automatic bid changes for demographics, devices, remarketing lists and locations
  • Searchers might research on a phone but convert on a desktop. You can set automatic bid changes (increases or decreases) for these devices, i.e. increase the bid by 10% if they are on a mobile device or decrease the bid by 15% if the searcher is a man aged 55+
  • Setting bid adjustments allows you to increase visibility for your most valuable customers and reduce exposure on lower value searches

 

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