Bid Management Guide - Learn How to Efficiently Manage Your Bids
While this service has a powerful impact on lowering costs and improving return on investment, it's still useful to keep an eye on your account's maximum bids. We suggest a few best practices for this in the paragraphs to come.
Feel free to skip ahead:
- Performance Tracking
- Using Bid Management Tools
- Common Sense Bid Management
- Initial Bid Management
- Tracking Performance Managing Bids
- Raising Bids, Lowering Bids, and Optimizing Ad Groups
While WordStream often provides you with a fire-hose of inexpensive traffic, it is still useful to track the performance of your Ad Groups and keywords. The steps here are simple:
- Allot a small amount of time every week to briefly review which groups and keywords are under-performing and over-performing.
- Determine whether to raise bids, lower bids, or pause a group or keyword (depending).
For a more detailed tutorial on prioritizing workflow within your WordStream account, check out our Search Marketing Workflow Guide.
WordStream offers a number of features, but ultimately the tool is very versitile, and can be utilized to work with any number of tools, ranging from Web analytics, to an AdWords bid tool, to bid management software.
One such option is Google's free bid management tool: Conversion Optimizer. If your ad campaign has at least 15 conversions in 30 days, you can enable Google's Conversion Optimizer. This tool tracks conversion performance for you.
You know your business: take a look at underperforming Ad Groups. Is that a term that makes sense? If not, pause the Ad Group or lower the bid.
Upon initially setting up your WordStream account, you'll want to mirror your existing maximum bids. If you're bidding .50 cents, keep it up:
You can manage bids at the keyword or at the Ad Group level - generally speaking if you are creating a lot of very granular groups with WordStream, you'll be able to successfully manage bids at either level. If you are just getting started and only have a handful of Ad Groups, however, it's probably a good idea to do more granular bid manipulation at the keyword level.
This is important because while WordStream's bidding software tools will help you to improve Quality Scores and lower costs, you'll want to maintain similar max CPC bids so that you can maintain a similar level of traffic, leads, and sales.
Having set a similar max CPC, it's worth-while to keep an eye on the performance of Ad Groups and even individual keywords.
First, login to your AdWords account. Click the "Campaign Summary" link and navigate to the WordStream account that is currently running:
You can then quickly investigate your WordStream group performance in a few simple steps:
- Sort by Cost - We recommend first sorting by cost to determine if any Ad Groups are eating up spend without converting. Simply view the Ad Groups producing the greatest spend, and consider manipulating that group(s) (more on how to manipulate a group in a minute).
- Sort by Cost/Conv. - This will again give you a bird's eye view of under-performing groups. Quickly scan high-spending groups to see if their cost-per-conversion is higher than you're comfortable with. If so, optimize the group. The same is true in the other direction: for groups that are perferming very well, consider raising your maximum CPC bids to generate more clicks and exposure.
- Sort by Conversion - This allows you to view the groups that are performing (or underperforming). You can then drill down to discover keywords that are performing well within your WordStream-managed Ad Groups, and can dedicate a group to them specifically. This provides two benefits:
- More Conversions - By creating a textual ad that's even more specialized, you can differentiate yourself for the queries this keyword is generating, providing you with more highly qualified clicks (and almost certainly, more conversions).
- Lower Costs - By the same token, the conversions you do get will cost you less. The reason for this is that you're more aggresively qualifying these visitors, and you're driving up your Quality Score; meaning that overall, your costs will go down.
One method that is both simple and has proven successful for clients is "rules based" bidding. Here's the easiest method:
- Pick a Target Cost Per Action - Define a target number that is cost effective for your business, and make that your "target cost per action or acquisition". So if you sell widgets and can afford to spend 10 dollars per widget sale on advertising, 10 dollars should be your "CPA" or cost per acquisition.
- Define a Date Rage - Every week to a month, be sure to alter your bids. As you do, look at the period of time between when you last edited your bids.
- Define a Percentage Increase/Decrease - Within AdWords Editor, you can raise or lower a bunch of bids by percentage. A good start is to manipulate bids by ~10 percent, but this is something you might want to experiment with.
- Raise Bids - Raise bids on Ad Groups or terms that are converting at a cost lower than your target CPA. You can identify these by sorting by cost per conversion in AdWords or AdWords Editor.
- Lower Bids - Lower bids on Ad Groups or terms that are converting at a cost higher than your target CPA. You can identify these by sorting by cost per conversion in AdWords or AdWords Editor.
- Pause an Ad Group or Keyword or Lower Bids - If a keyword or group eating up your spend and not converting, you might consider pausing that keyword/Ad Group, or you might lower bids at the same rate as you would if they converted for more than your CPA. It's typically a good idea to make sure a keyword has spent at least to your CPA before you pause or lower the bid on it.
If you have specific questions about bid management for your campaign, don't hesitate to contact your client services representitive, or send us a note.
In addition to these bid management best practices, we also offer a series of optimization techniques in the WordStream Search Engine Marketing Best Practices Guide. Check it out any of the following modules to learn more today: