AdWords, Understand Bid Types

AdWords, Understand Bid Types Introduction

Like most advertisers you will probably focus your AdWords advertising strategy on acquiring the maximum number of relevant clicks from the minimum number of impressions to obtain the maximum number of conversions.

Clear Goal

Before you advertise on AdWords, you must have a clear goal in mind for your ads.

• Do you want more people to visit your website?
• Maybe you want to get more people to visit your shop (real or virtual)?
• Maybe you’re aiming to get more people to sign up for your newsletter?
• Maybe you’re promoting your unique membership only group?

Knowing what you want your ads to do is a must, your goal will help you decide how to bid.

Top Priority: Set a Budget for Your Campaign

Don’t let your budget get out of hand. Before you do anything else set your campaign budget limit. This is an auction, decide how much to spend first, before you enter the auction and don’t be tempted to over bid.

• Your daily campaign budget applies to a single campaign, not all campaigns in your account.

Your AdWords budget should be a daily budget based on your advertising goals. If you’re working with a monthly advertising budget, find your daily AdWords budget by dividing your monthly budget by 30.4 – the average number of days per month.

Start small, try a daily budget of US$10 to US$50 and check your account regularly to see how your campaigns are performing.

Bidding Focus

Remember, AdWords runs an auction every single time it has an ad space available. Each auction decides which AdWords ads will show at that moment in that space. Your bid puts you in the auction (depending upon the criteria you’ve set) and as is the case in real life, you win some, you lose some. Don’t expect your ad to appear every time your keyword pops up.

When placing your bids, you must focus on one of three different things;

• clicks,
• impressions, or
• conversions.

Which do you choose? Let’s look at these more closely.

Focus on Clicks with Cost-per-click Bidding

If your main goal is to have people visit your website, then use cost-per-click (CPC) bidding. With CPC you’ll pay only when someone actually clicks on your ad and comes to your website.

• Automatic CPC bidding. This is the easiest way to bid. Just set a daily budget and let AdWords adjust your CPC bids to bring you the most clicks possible within that budget.
• Manual CPC bidding. This lets you set your bidding limits on the clicks that mean the most to you. Manual bidding lets you set bids at the ad group level, or for individual keywords or ad placements.

Cost-per-click (CPC) bidding allows you to set a maximum price on the cost of someone clicking on your AdWords ads. This bidding method gives you good value because you pay only when a viewer is interested enough to click your ad.

• Tip: Don’t bid more than you can afford! More often than not, the top position isn’t the most profitable.

Focus on Impressions (CPM)

If your main aim is not just about conversions but to simply get your website, name or logo in front of lots of people, then CPM is the method you need.

• You set the max amount you want to pay for ads, whether they’re clicked or not.

Unlike CPC where you pay by the click, with cost-per-thousand impressions (CPM) bidding you pay for every 1,000 times your ad appears on the Google Display Network (sorry if that was too obvious, but people do ask). Now a thousand impressions may seem a lot but given the millions of ads that appear per hour, if you’ve chosen a very popular keyword, costs could get out of hand very quickly. Be careful out there.

CPM bidding, like CPC manual bidding, lets you set bids at the ad group level, or for individual placements.

Focus on conversions (CPA)

This is an advanced bidding method called, cost-per-acquisition (CPA) bidding, where you are paying for particular action, a conversion in this case.

To use CPA bidding, you set your account to tell AdWords the amount you’re willing to pay for each conversion.

• A conversion is a particular action you want to see on your website: often that’s a sale, but it could be filling in a form, joining your membership group or some other action.

CPA bidding is suited for intermediate and advanced AdWords users.

Using the AdWords Bid Simulator

The AdWords Bid Simulator tool can estimate what your advertising results could have been on the Search Network over the last seven days, given the bids you might have placed.

• WARNING: The AdWords Bid Simulator does not predict the future, it estimates the past.

The AdWords Bid Simulator tool allows you to estimate the clicks, costs, and impressions your ads would have received if you had used a different minimum or maximum CPC bid for your keyword or ad group.

So, before placing, increasing or decreasing your bids, use this tool to estimate your ads performance? It’s not perfect, but the AdWords Bid Simulator tool can help reduce ambiguity in bidding and show how your traffic might be affected by your changes.

AdWords, Understand Bid Types Conclusion

Remember: You can change your bid type any time you like. Use the “Bidding and budget” section on the Settings tab of any of your campaigns.

Well, I hope you found something useful and enjoyed this article, AdWords, Understand Bid Types. Don’t forget to let me have your thoughts in the comment box below. See you soon.