A paid search has three essential elements: Bids, Keywords, and Ads. Bids have changed significantly in the last year or so. This development requires account managers to take a very serious look at bid strategy. As bids themselves have changed, the same is true for the tactics used in order to gain an advantage.
Simply put, the best CPC bid has an equation of conversion rate times target cost per conversion (Conversion Rate x Target Cost Per Conversion). Account managers would place historical conversion rate data by keyword on a spreadsheet, include with it a target cost per conversion column, and multiply both to get the right CPC for the account. That is all well and good, but now the decision has to be made as to the proper overall bidding strategy to use. The following are some options.
- Regular Bidding
- You control the CPC for every keyword you designate;
- This is going to consume time, because you will have to check the bids so they are effective given what can be changing conversion rates.
- The Enhanced CPC Approach
- Google will utilize experiments on every one of your bids, decreasing or increasing the numbers based on how your ad might convert. Good results will cause Google to move from your default to an Enhanced CPC;
- These work well on those accounts where bids are not regularly optimized.
- Auto Bidding
- This gives the maximum number of clicks Google will derive from the daily budgets of your campaign. Bid adjustments will deliver less expensive clicks;
- It works best for those accounts which have small amounts of conversion data. For example, the only statistics tracked are website visits from browsers;
- It comes in handy if you have to cut back on budgets due to high lost impression shares;
- Auto bidding could buy cheap clicks with poor quality. Store visits and telephone calls could drop as you lose the interested audience which came with high CPC keywords.
- Google Conversion Optimizer
- Google can set the bids and allow you to generate conversions;
- This will work in those accounts with reliable trends of performance. Business with seasonal fluctuations may want to think twice about this, because the Optimizer will have a negative impact on bids because of a few days of slow business;
- You would be wise to record Conversion Rate and the CPA of your campaign before you use the Google Conversion Optimizer. That way, if after a few weeks the figures are not improving you can go return to using the manual bidding
Impact of Bid Modifiers
Account managers know how different situations will affect the keyword bids. Consumers using different mediums (desktops, smartphones, etc.) and will not have common conversion rates. Bid modifiers can help. You are able to fine tune your bids for time of day, week, or other criteria based on a percentage.
These will perform like regular CPCs in determining what they ought to be. You can quickly develop a good system of bid adjustments that reflect time of day or another criterion such as mobile devices. Control is always something to think about. Multiple overlapping bid adjustments may be necessary.
What About Flexible Bidding Strategies?
AdWords now permits flexible bid strategies which may have significant benefits for any campaign. You are no longer tied down to one form of bidding. It is possible to develop a bid strategy to be applied for those campaigns where it is needed, without having to create an entirely new campaign. You can bid one CPA target for a low value keyword, and quote another figure for a bid on a high value keyword. Additionally, in the same campaign, you can have a Top of Search Page bid.
You must know what goals you have, have a regular update schedule, and monitor activity to be successful on Google. This is true whether or not you decide to use flexible bidding strategies or bid modifiers. It is the kind of work and the amount of time spent on chores that have changed. It is definitely worth the sweat equity and you will discover that your bids become better, generating the right kind of results. It is certainly worth your while to think seriously about any changes to your PPC bidding strategy