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Tara West

AdWords Bidding Strategies For Your Business

24th Jun 2014 Paid Search | 3 Comments


bigstock-Coins-1289241Your PPC bidding strategy is fundamental to achieving the best results from your PPC account. The strategy that works best for you will depend on what you’d like to achieve. This post looks at the different objectives your business might have, and the bidding strategies that could work for you.

We will look at different scenarios and explain the best PPC strategy to suit.

“I have a local business and I want to use AdWords to drive footfall into my physical shop”

If you’re using AdWords to drive physical visits to a store, or even just have local campaigns, then location bid adjustments are something you should be using within your bidding strategy.

If customers in a particular location are especially valuable to you then you can ensure you have maximum visability in that location by increasing your bids for ads shown to users in those areas. For example, if you are a suit tailor that covered the whole of London by doing home visits, but your store was located on Savile Row, you could increase your bids for all users within a 5 mile radius to Savile Row as they are most likely to visit your physical store.

This kind of bid adjustment shouldn’t be used as a stab in the dark and should instead be a part of a wider informed bid strategy where you have calculated how much you can actually bid.

“I want to drive repeat purchases from my customers so they keep buying from me”

Colours-Shopping-Bags

If repeat purchase is your aim, Remarketing Lists for Search Ads are your game!

They sound more complicated than they are, and you can read about them in more detail here but one effective way of using Remarketing Lists for Search Ads is to drive repeat purchases via search ads.

They allow you to set a bid adjustment based on that user’s previous behaviour on your site. For example, if you sold laptops and a user purchased a laptop from you online, you could then increase your bids for that user in your other campaign which promotes laptop accessories such as laptop cases. Now when a user who has already converted on your site searches for ‘laptop cases’ your ads will have a higher bid and therefore be higher up in the search results.

The logic behind it is that the user is more likely to convert from you again because they’ve already had a good experience with you and so they’re worth spending more on per click as they’re more likely to convert.

This is only one of MANY ways to use RLSAs in your bidding strategy so read up on some of the other ways which might suit your business too.

“I just want to get the most clicks for my daily budget”

The first thing I’d say is – be very sure that this is what you want and don’t forget to pay attention to conversions. You can have all the clicks in the world but if they aren’t converting then there really isn’t any point.

If you’re still adamant that you just want to focus on clicks and getting the most clicks for your ad spend, then  AdWords Automatic Bidding may be the solution for you.

AdWords Automatic bidding allows AdWords to automatically show your ads at opportunities where the Cost Per Click is low, so that you are able to get the highest number of clicks for your daily ad spend.

Be careful with this strategy because although you may be getting more clicks, those clicks may be less relevant or a lower quality because they cost so much less and have less competition. The result could be that the lower quality clicks don’t convert as well, so make sure you have some kind of process in place to measure conversions or check that the strategy hasn’t been detrimental to your enquiries.

Automatic Bidding works at campaign level, but if you’d like to apply it at ad group or keyword level then use the Flexible Bidding Strategy called Maximise Clicks. With the flexible bidding strategy you’ll create the strategy then apply it to the ad groups or keywords on which you’d like to use it. The budget you give to the bidding strategy is separate from your daily ad spend so be prepared to spend the normal daily ad spend plus whatever you allocate to that bidding strategy across the keywords you apply it to. Maximise Clicks still lets you use scheduling for your ads, but it takes care of bid adjustments for you.

“I need to get as many conversions as possible”

If you’d still like to have some control over the maximum amount you’re prepared to pay for a click, but you’d like to get as many conversions as possible at that cost per click, then Enhanced CPC could be the AdWords bidding strategy for you!

This function allows AdWords to run experiments on all your bids based on the likelihood that the click will result in a conversion. It works out this likelihood by analysing past conversion data, so the more historical conversion data you have, the more accurate this function usually is.

I have a maximum Cost per Conversion that I need to meet

If the most important thing to you is that your Cost per Conversions average out at a steady Cost per Conversion target that you set for a campaign, then Conversion Optimiser might be able to help.

Conversion Optimiser works by setting a target Cost per Conversion at campaign level. AdWords then uses your historical conversion data to optimise your bidding strategy so that you meet that Cost per Conversion target on average. There will be instances where the Cost per Conversion is slightly higher than target, but over the space of around 30 days you’ll usually find that the target Cost per Conversion is met.

Cost Per Lead

You need at least 15 conversions in the last 30 days to use this feature. I’d only really recommend using it when you have a lot more historic conversions than this as the more data AdWords has the more accurately it can adjust your bids to meet the target.

Be aware that if you set your target Cost per Conversion at a level that is too low and is unachievable, AdWords simply won’t show your ads because the Cost per Conversion target wouldn’t be met. My advice is to keep a very close eye on this feature to make sure that AdWords doesn’t start reducing your bids too much if you have a period where conversions aren’t happening. For example, if you sell something that is highly seasonal like a florist selling flowers around Valentines day, you’d see a peak in conversions in February, but then in March when conversions drop back to normal levels you may find that Conversion Optimiser reduces your bids because it is working on your historical conversion data and thinks you’re experiencing less conversions than normal.

Give Conversion Optimiser a month before you decide whether it’s working for your account, as often the results don’t become clear until around a month afterwards when the average Cost Per Conversion is reduced.

If your campaign contains multiple ad groups that you’d like to set different Cost per Conversion targets for, then check out one of AdWords flexible bidding strategies called Target Cost Per Acquisition (CPA). It works in the same way as conversion optimiser but you can apply it to selected ad groups or keywords rather than a whole campaign if you want to. The benefit of this feature over Conversion Optimiser is that you can set a minimum Cost Per Click bid so AdWords will never make your bids too low.

Be aware that Conversion Optimiser and the Flexible Target Cost Per Acquisition (CPA) will set your scheduling and mobile bid adjustments for you, unless you set them as -100%.

“I just want to be number one in the paid search results”

This is another strategy that I’d urge you to think carefully about before you embark upon it.

Being number one in the paid search results may not be the most cost effective option for your business. If you’re doing it for vanity purposes then I’d beg you not to! You can use the data in the AdWords to see how your ads perform in different average positions, and then decide whether you want to go ahead with this strategy.

If you want to ensure your ads are shown mostly in a certain ad position, then use the Flexible Bidding Strategy of ‘Target Search Page Location’.

You can choose to apply it to just certain keywords or ad groups that you want to have in that location.

Be aware that the strategy doesn’t apply to the Google Partners Network and that you aren’t always guaranteed to be in that position, it’s just an aim that AdWords adjust your bids to meet.

If you choose to target the top of the search results page your bids will be based on AdWords top of page bed estimates which you can find by adding that column into your keyword table. This estimate takes into account your Quality Score and many other factors so it’s not necessarily accurate and it may see you bidding higher than you need to.

If you think their estimated top of page bid is too high you can choose to bid a percentage of that estimate .For example, if you chose to bid 50% of the estimated top of page bid and their recommendation was a bid of £1, then your bid would be £0.50. Another nice feature with this strategy is that you can set a max CPC limit so your bids don’t go too high.

“The only thing I care about is that I make a decent return on my ad spend”

This is probably one of the best strategies if you’re wise enough to realise that meeting a set Cost per Conversion alone isn’t enough to guarantee you’re making money. You could have the best Cost Per Conversion in the world, but if that conversion isn’t bringing you in enough revenue to justify its spend then there’s a problem.

The Flexible Bidding Strategy of Target return on Ad Spend is a way to ensure you’re getting enough revenue from your ad spend. For this to work you’ll need to have a conversion value applied to your conversions. For example, ecommerce conversion tracking that dynamically pulls in the basket value of a sale, or to set a value manually to each of your conversions (i.e. you might estimate that a ‘request a quote’ form submission is worth £10 to your business).

AdWords then sets your maximum Cost Per Click bids to maximise your conversion value and as a result ensure you get the best possible return on ad spend.

Final Thoughts

The options for bidding strategies are constantly growing and becoming more complex all the time. My advice is to make sure you really know what you’re doing and understand the strategy you’re using, and keep a very close eye on your results to make sure they aren’t having a negative effect.

Naturally these strategies are just ideas, and you may find that you want to achieve more than one of the objectives set out above. If that’s the case then you can use a mix of these ideas at the same time to come up with the perfect bespoke PPC bidding strategy for your business.

If the thought of coming up with such a strategy is a bit daunting to you then give Koozai a call and our PPC experts can create the perfect PPC bidding strategy for your business and make your account more cost effective.

Image credits:

Cost Per Lead via BigStock

Colours Shopping Bag via BigStock

Coins via BigStock

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About the author

Tara West

Tara West is an experienced SEO and PPC specialist at Koozai, with particular expertise within AdWords PPC and Remarketing. She has worked on a wide variety of verticals, from plumbing and travel to fashion and beauty.

Beginners-Guide-To-AdWords

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