What is Bid Management Strategy in Google Adwards?

The most important step before bidding for any PPC program is, understanding the market value of your keywords. And best way to know it is Overture. But there are several bids going around for a keyword. So you can take an average of some top biding amount and can determine the market value of your keywords. If you can afford the market value you derive, use it. Otherwise, use your max CPC. That max CPC could be set for an entire ad group or for a specific keyword phrase.

Track the ad carefully for a few days. Assuming the bid is high enough and generates sufficient traffic, you should have a good idea of the CTR within a few days. If the CTR is good (at least 2%), lower the CPC and see where your ad falls in the search results. If the CTR is sufficient, lowering the CPC should not result in your ad dropping many positions.

Then use trial and error method with different combinations. Run a query and observe the position. Drop the bid by some amount and check the position again. Again drop it and check it. Follow the procedure until you remain in the top 3-4 or whatever desired position you want to be. If your ad's CTR is very good (better than 7%) you will likely be able to drop your CPC in half without a noticeable drop in ranking.

If your ad group has many keyword phrases and there's a divergence in CTR, consider creating multiple ad groups. The more tightly focused your ad group is, the lower your CPC will ultimately become as you weed out poorly performing keyword phrases. Adding negative keywords to each Google ad group will also help increase the CTR and thereby allow you to reduce your CPC.

Do You Know about Performance matrix?

The main aspect of PPC advertising is not exposure, but clicks and sales conversions. The click-through rate is defined as the percentage of times a paid search ad is clicked on out of the total number of paid search ad views within a given period of time.

Click-through Rate (CTR) = Click-throughs (i.e. Total Visitors) / Impressions

Website conversion is defined as the percentage of users who visit your website and complete your primary objective (i.e. purchased a product) out of the total number of users who visit your website in a given period of time.

Website Conversion (sales conversion) = Sales / Click-throughs (i.e. Total Visitors)

So what role does each play in understanding the effectiveness of a paid search campaign?

Standard practice among advertisers is to concentrate on writing ads that achieve a high click-through rate to send more visitor traffic to their website. Unfortunately this general assumption, “more traffic equals greater positive results”, is flawed.
Consider this. Which click-through rate is better?

* A 20% click-through rate for a paid search ad that achieves zero sales (0% website conversion).
OR

*A 0.2% click-through rate for a paid search ad that achieves 10 sales (10% website conversion).

The answer is obvious. The click-through rate, especially for newly setup PPC campaigns, is relative – it is the website conversion rate resulting from visitors clicking through a particular paid search ad that defines success or failure.

Successful paid search advertisers take a different approach. They start with the end in mind by asking, “what primary objective do I want a visitor to complete on my website?” and then they work backwards. They identify the type of visitor and buying behavior that will most likely result in a completed action (i.e. sale, registration, etc.)

In addition, they perceive their ads as automated salespeople who “qualify” visitors. Regardless of a high or low click-through rates, the focus is on generating a positive return from the advertising dollars spent.

For instance, let’s review two different ads. Ask yourself, which ad best qualifies visitors?

A. Pride Scooters Low prices and huge selection of scooters and other mobility equipment.

B. Pride Scooters From $1850 while stocks last. Houston, Texas, USA.

If you selected B. you are correct.

Ad B. qualifies visitors based on their buying behaviors and customer type most likely to purchase a Pride Scooter from the business’ website.

First, the ad states a price point (i.e. from $1850) to attract visitors seeking the website’s premium product while disqualifying ones seeking discounted or lower-priced scooters. A user researching scooters does not have to click-through the ad to find out a general price range.

Second, the ad targets a geographic region since the majority of people who buy scooters demand an actual test ride. If the company is located in Houston, Texas then users from other locations will not feel compelled to click-through the ad. (Ideally a geographically-targeted PPC campaign like using Google Adwords Regional-targeting works best in this situation).

In essence, ad B.’s goal is to pay “per click” for only visitors most likely to purchase their product. This ad attempts to “filter” unqualified visitors thereby increasing the return on investment per click-through.

Ad A. instead spends money on attracting and generating click-throughs from all visitors and relies on the website to filter qualified versus unqualified ones. This is not a wise economical approach especially if no “visitor exit strategies” are pursued.
Last, successful paid search advertisers rely on testing different ads to determine which appeal generates the best website conversion for a particular keyword. They rely on actual visitor feedback to help them determine which appeals are most effective. Once a positive return is achieved then focus is shifted to increasing the click-through rate for the best converting keywords so more sales can be realized.

So “Are you spending money to bring just anybody to your website or visitors ready to buy from you?” Think about ..is Your Paid Search Advertising Generating Positive Financial Results for your website?