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Bidding Made Easy – 7 Step Guide For Beginners

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Bidding….. the reason why online advertising seems daunting. Even if you understand how bidding works in general, hearing terms like PPC, CPC, etc., can put us off. So here’s the thing. Yes bidding on AdWords is a complicated process, but hopefully by the end of this article you will feel a little bit more comfortable to try out AdWords and see what an awesome tool it is.

How bidding works

Google has 2 primary networks on which your ads are shown, the ‘Display Network’ and the ‘Search Network’. In this article we will focus on how bidding works on the ‘Search Network’. Click ‘Search Network’ to find out more about how it works.

When you bid, what you are actually doing is buying the rights to use certain keywords that match the most used search terms used by people to find you, enabling your ads to show up at the top most position on the search results page. Just like print media, the higher the amount you set for your bid, the higher your ads will show up on the search results page. But if your ads don’t get clicked often or if the page of your website the ads are linked to is not talking specifically about what the ads are advertising, then it can bring down the position of your ads. Here’s a video on how it works.

Getting your bid right will help you:

  • Make your campaigns cheaper
  • Improve relevancy of your ads by bidding higher for the keywords that people are most likely to use to find your product/service.
  • Attract the right audience by getting the position of your ad right.

How to bid:

  1. Setting Daily Budget

Daily budget is the amount you are willing to spend per day on an average. Daily budgets are set for each campaign. If you work with monthly budgets, then divide that amount by 30.4 (average number of days per month) to get the amount you need to set as the daily budget. Your ads will be shown by AdWords till your daily budget is exhausted.

Customer traffic fluctuates on a daily basis and for this reason; AdWords allows your ads to show up 20% more on certain days, than what’s possible with your daily budget. However your daily budget for other days will get reduced to compensate. You will never be charged more than the monthly charging limit which is 30.4 X daily budget.

  1. Choosing ad delivery method

Depending on how quickly you want your budget to be utilized, AdWords gives 2 ad delivery options:

  • The ‘Standard’ delivery method spreads your budget throughout the day.

Advantages –

    • Better option if you are new to AdWords as it will help you collect data for future campaigns
    • Useful when you have a small budget

Disadvantages –

    • Your daily budget may not get fully utilized
    • Since Google spreads out the ads, your ad may not get shown for some searches. This could hit your business, especially if your business gets heavy traffic during certain times of the day.
  • The ‘Accelerated’ delivery method uses your budget more quickly.

Advantages –

    • Better chance of budget getting utilized fully
    • Since your ads are shown fast, it increases the chance of your ad getting shown higher and getting more clicks.

Disadvantages –

    • Once your budget is utilized, your ads will stop showing for the rest of the day

To begin with use standard delivery. Once you get a hang of how much traffic and when the peak hours are, you can schedule your ads to accelerate during peak hours.

The delivery method options will be available only if you select ‘All features’, when choosing your campaign type.

Delivery-method-1

 

Delivery-method-2

  1. Choose Bidding type –

Depending on what you want out of your ads, clicks or conversions, there are several ways in which you can bid for your ads.

  • Based on clicks

Cost-per-click (CPC) or pay-per-click (PPC) bidding is best for ads which are created to generate more clicks to your website. In this type of bidding you only pay when someone clicks your ad. The more clicks a keyword is able to generate, the higher will be its bid value. As a result the CPC keeps changing the entire day. When you set the bid amount what you are telling AdWords is that no matter how much the CPC may vary, this is the maximum amount (‘Max CPC’) you are willing to pay per click.

AdWords gives two options for CPC bidding, Manual and Automatic. If you set it to Automatic AdWords sets the bid amount and does everything for you, to get the maximum number of clicks within the budget you specify. However to get a better control of your campaigns it is better to go with the Manual option.

Here’s a video showing how to set up CPC bids.

  • Focus on conversions

Cost-per-acquisition (CPA) bidding is where you tell AdWords the amount you’re willing to pay for a conversion (also called an acquisition).

To use CPA bidding you must have few conversions (30 to 40) and turn on:

    • Conversion tracking
    • Data import from Google Analytics
    • Conversion optimizer

You will have to set a target CPA bid (average CPA) amount, the cost you are willing to pay per conversion. What conversion optimizer does is it analysis your campaign stats and automatically adjusts the bid amount to around the CPA amount you have set, to get you the maximum conversions.

cpa

You can set the bid amount at the Campaign and Ad Group levels under the tab ‘Bid strategy’, in your account.

  1. Setting the bid amount

There are a few ways you can go about setting your bid amount:

  • Key word planner

You can find it under the tools tab right on top of your AdWords account. Type in the keywords you want to use and AdWords will provide you with information on how much traffic is generated by other advertisers using those keywords and suggests a competitive bid.

  • Keyword bid simulator

This option becomes available once your campaign has been running for some time. It suggests an optimal bid amount based on your campaign stats. It can be accessed under the ‘budget’ column at campaign level and under ‘max CPC’ at Ad Group and Keywords level by clicking the symbol:

bid-simulator

  • Spyfu.com

spyfu.com will give you in-depth information on the keywords used by any of your competitors. Which keywords get them organic traffic, which ones get paid, how much they are bidding for them, where are they advertising their ads, etc. You can use this information to select the bid amount that most suits you.

  • Bidding for various keyword match types

Click keyword match types if you are not aware of what they are. The more specific your keyword is, the higher you should bid for them.

    • Put the highest bids on Exact match types
    • Bid -5% of Exact match types on Phrase match types
    • Bid -10% of Exact match types on Broad match modifier types
    • Bid -20% of Exact match types on Broad match types
  • Bid based on where you want your ads to show up on the search results page

Top positions generally yield more views and clicks and 3rd to 5th positions, generate better conversions. So you don’t have to always bid for the top most position. Take into consideration where you want your ads to show up, before setting your bids. Test and see what works best for you.

  1. Bid adjustments

Bid adjustments allow you to increase or decrease every bid in your campaign to bid more or less competitively for searches across devices, locations, time of day and more. Bid adjustments are set by percentages. Here’s a video on how it works:

bid-adjustment-types

  1. Flexible bid strategies

With flexible bid strategies you let AdWords set bids automatically to optimize your goals.  You can set them at the same place where you set up your bidding types

  • Maximise clicks:

Maximises clicks within a target spend amount you set.

  • Target search page location:

Adjusts your bids to get your ads to the top of the page or the first page of search results.

  • Target outranking share:

Automatically adjusts your bids to help your ads outrank ads from another domain competing in the space as you. You can either add a domain manually or choose from a list of suggested domains by AdWords. However AdWords will be able to provide this list only after you have run a few campaigns.

  • Enhanced cost-per-click (ECPC):

ECPC like CPA bidding focuses on maximizing your conversions. While CPA bidding refers to the CPA bid set by you, what ECPC does is it increases your max CPC bid by up to 30%, if it feels that a certain click’s chances of resulting in a conversion are higher.

  • Return on ad spend (ROAS):

Target return on ad spend takes ECPC and CPA bidding to the next level. It focuses on improving the overall revenue you make from ads, by trying to reach the average return on ad spend amount set by you.

roas

Keep in mind that the target ROAS you set may influence the conversion volume you get. For example, setting a target that’s too high may limit the amount of traffic your ads may get.

  1. Create automated rules

You can automate and add certain rules to your campaigns to make your work of managing your campaigns a bit easy. For example

  • You can schedule accelerated delivery for ads during certain times and standard at others.
  • Automatically pause low-performing ads or keywords
  • Raise keyword bids to ensure ads show up on top of search results page during a certain time of the day
  • Send yourself an email if a campaign’s budget is close to exhaustion early in the day

A video on how to create automated rules

Bidding process in AdWords is the most complex. Once you get a hang of it, Bing, Yahoo, Facebook or advertising on any other online channel will get that much easier.

Hopefully, you are feeling a bit more comfortable to tackle bidding and all its complexities. Bidding you farewell till next time!

Image credit: Google

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