First, let’s define a keyword as a keyword & match type combination. Therefore, “kitchen remodeling” phrase matched is a different keyword than [kitchen remodeling] exact match.
With the above definition, the short answers are:
The same keyword should not appear twice in a search campaign
A keyword can appear twice in an account if the keywords do not compete with each other
The same keyword can appear twice in content campaigns
The same keyword should not appear twice in the same search campaign
Your keyword’s visibility settings are set at the campaign level (day parting, geographic targeting, etc). Therefore, all keywords within the same campaign have the exact same potential visibility. If you have two of the same keyword in two different ad groups within the same campaign, these keywords will compete with each other. Essentially, Google will show the one with the highest Ad Rank (Max CPC x Quality Score) most often. This leads to a loss of control for the advertiser.
For every keyword, you should have in mind an exact ad copy and landing page you wish a searcher to see. If you are not sure which ad copy or landing page is best for any one keyword, then test these items within the ad group.
A keyword can appear twice in an account if the keywords do not compete with each other
It is OK if a keyword is in two different campaigns if those campaigns have different visibility settings. Some of those most common examples are:
The campaigns are set to be shown in different geographies
One campaign is content only, another is search only
One is for desktop users, the other for mobile users
The campaigns are shown at different times, or on different days
What you do not want is for a keyword to be in two different campaigns if ads from those campaigns could be shown at the same time (which they won’t as only one ad per account will only be shown on one search result).
The same keyword can appear multiple times in content campaigns
For content campaigns, the search engine examines all of the keywords in an ad group and assigns a theme to that ad group. What is more important for an ad group is that all of the keywords create a cohesive theme. Individual keywords do not matter nearly as much. Therefore, it is OK to have the same keyword in multiple ad groups. For instance, you may have these ad groups:
Ad Group 1: iPhone
iPhone
iPod
MP3 Player
3g
wi-fi
mobile phone
AT&T
Ad Group 2: Droid
Android
Droid
wi-fi
mobile phone
Verizon
In this example, the word wi-fi and mobile phone are in both ad groups. As the other keywords in each ad group help to shape that ad group’s theme, is is OK for those keywords to appear in both ad groups.
Keep Control of Your Ad Display
The search engines are happy to take control of your ad serving. If you use a keyword multiple times in a campaign, especially if you only use broad match, then you will quickly start to lose control of your ad’s display to the search engine. Much of PPC optimization is ensuring that your ad is only shown under specific conditions.
Every time someone conducts a search that matches a keyword in your account, you should control exactly what ad copy and landing page will be seen by the searcher. Only by asserting control over your own account will you find true PPC success.
Preferred Cost Bidding allows you to set your bid prices to your average CPC and not your max CPC
You can enable this for both CPC and CPM (site-targeted) campaigns.
This is very useful in three different scenarios:
1. You know your value per keyword. If you have the data that says keyword 1 is worth $4.23, and keyword 2 is worth $3.56, then instead of ‘guessing’ what the max CPC should be, you can set your preferred cost at those actual prices.
2. You want more control over expenditures. When setting max CPC, your click cost can vary widely from day-to-day. With preferred bidding, you have much more control over how much you actually pay for keyword. This makes it so your average spend per keyword should be much more consistent.
3. You don’t want to spend all day reconfiguring bids. Since preferred bidding changes your max CPC behind the scenes to reach your actual bid price, there’s a lot less work in adjusting bids with preferred cost bidding.
How does it actually work?
With preferred cost bidding, you can set your preferred click cost at the keyword or ad group level. Behind the scenes, Google then adjusts what your max CPC should be so that your actual click cost comes out to be in your preferred cost bidding range. (More on quality score and ad rank)
So, the same ad rank formula (ad rank = quality score X max CPC) still applies, just Google is doing an addition algo behind the scenes to determine your max CPC.
Incompatibilities
Since Google needs control over your max CPC in preferred cost bidding, it’s not compatible with a couple of AdWords features:
Ad Scheduling advanced features. Preferred cost bidding works with the normal ad scheduling (which is essentially day parting or showing your ads at specific times of the day and days of the week). However, the advanced version of ad scheduling allows you to automatically change your max CPC at various times by a percentage. This advanced feature is not compatible with preferred cost bidding.
Position Preference. This feature allows you to control which range of positions you wish your ad to show. Since Google is changing the max CPC behind the scenes in position preference to determine your ad rank, this is incompatible with preferred cost bidding which is also trying to change your max CPC.
Will you overpay?
The first negative reactions I heard about this feature is that since you are setting a preferred cost, in times when you could pay less for the top positions, you could easily end up overpaying for ads (i.e. if your bid was $3, and it required you to pay $1 to be in the number one spot, the rumor was Google would charge you $3).
This isn’t true.
Google is still running the ad rank formula for all companies involved in the auction for a single keyword, and the ad discounter still applies as well. Essentially, the ad discounter calculates the values for all companies in the auction process and reduces your actual CPC to the lowest possible CPC you could pay to be in that ad position.
Enabling Preferred Cost Bidding
Preferred cost bidding is another bidding option. In the campaign settings, you’ll first want to ‘view and edit options’ under bidding.
Next, choose from one of the three bidding options:
Set max limits – default bidding
Set preferred bids – preferred cost bidding
Budget optimizer – maximize traffic
Finally, choose how to change your current max CPCs to your preferred cost bids.
Preferred Cost Bidding can be very useful for controlling your ad spend, or for those who really understand the best bid by keyword or ad group.
I’ve been playing with it in a few accounts (it’s still in beta), and have been quite happy with the results so far.
It won’t be for everyone (the advanced ad scheduling being the one incompatibility I hope they fix), however, if you want more control over what you pay per click instead of what you bid per click, then it’s worth taking preferred cost bidding for a spin.
Is your inventory running low on widgets? Pause those keywords.
Do you have keywords that only do well on the weekend? Pause them during the week.
This has been a much requested feature, and now it’s quite simple.
Here are screen shots of ad copy:
And keywords:
The trick is going to be finding paused keywords and ad groups. You can run a report and view keyword status. However, if you run a report in a time framewhere the keyword did not get an impression, then the keyword won’t show in the report in the first place.
The most reliable way is to use the ‘find and edit keywords’ tool. There is now an option to search for paused ads or keywords.
Hopefully, they will add the keyword and ad status to the AdWords editor soon. This will be the most efficientway to pause and unpause keywords and ad copy.
Lycos has re-launched their PPC program with many new features. Their new PPC back-end provider is MyGeek. The new feature set contains items that have traditionally been part of a CPM program. After looking through their documents and options, I decided to re-launch a Lycos campaign and add it to my conversion test. Then the trials began… (more…)
Google has announced a new feature, one that allows you to change the time zone in your AdWords reporting. However, there are a few important pieces of information to consider before changing your account settings.
First, let’s examine what Google has to say:
Currently, all AdWords accounts are set to Pacific Time. However, in the coming weeks you?ll see a message in your account inviting you to set your account’s local time zone. This means your entire account, including all ad serving, reporting, and billing, will be calculated and managed according to the time zone of your choice.
It?s important to note that your account time zone can be set only once, so please choose wisely! Also, if you don’t select a different time zone, your account will remain on Pacific Time.
This will create a scenario where it will be easier to audit your server logs and compare it to charged AdWords traffic. As all the major search engines are on the west coast (MSN, Google, Yahoo), this seems to make sense on the surface. However, if Google introduces features such as day parting, click to call during business hours, etc, then you’ll be doing a lot of math to ensure you’re targeting the correct hours.
An easier fix if you are on a dedicated server is to change your server settings to your own time zone (or a time zone equal to your paid traffic source). Also, if you ever switch hosts, then the work of coordinating these time stamps is now incorrect. Remember, its a permanent AdWords setting, so use cautiously.
Agencies: Set all the advertiser time zones to your time zone
If you do hosting, manage reports for many different companies, have a custom tracking system, etc, this seems to be a logical choice as you can now evaluate traffic as it relates to your management systems. However, the disadvantages are the same as above. Just because it makes agency life easier, doesn’t mean its in the advertiser’s best interest.
Set the time zone to the local business time
If Google introduces new features like day parting, then you can coordinate your AdWords account with the hours your business is open.
If AdWords introduces click to call, then you can easily manage the campaign so that it only runs when your business is open.
This seems to be a feature no one considers in the pay per click market unless they have experience with Ingenio on AOL or other pay per call systems.
In most of the pay per call scenarios, a call isn’t charged until the call time breaks 10-18 seconds. However, with answering machines, late night call centers, etc – its easy for someone to break this barrier when leaving a message. As pay per call’s purpose is to connect a live potential customer with a live service agent, one only wants to pay in scenarios where this occurred.
Ingenio currently has settings where the ad is only shown during business hours. One would speculate that with Yahoo and Google experimenting in this arena, they would introduce similar features for local businesses so they can take full advantage of this offering.
Conclusion
Unless you have a strong reason to change this setting right now – I’d suggest waiting. Google is always rolling out new features, and this one is setting up future offerings. It might be best for most companies to wait until those future offerings arise before changing a settings that’s currently marked as permanent.
In the original e-book, Craig wrote the following about bid management:
“Bidding gets entirely too much attention in the paid search world. Both the idea of it and its process are treated as if they’re the central element to successful campaigns.
The truth is that bidding is just another piece of the puzzle. Even the best bid strategy or most powerful bid algorithm can’t overcome poor keyword selection, sloppy organization, or uninviting ad copy.
Think of it this way: there are pre-requisites for bidding. Until a keyword is ready, anything more than a simple target-position bid strategy is most likely a waste of time and perhaps money.
Don’t worry too much about the bid for any keyword until it:
Lives in a tightly organized ad group
Uses the right match type
Attracts appropriate search queries
Is paired with targeted and persuasive text ad copy
Sends traffic to an effective landing page or conversion path
Any bids calculated and set before these milestones are achieved are based on inconsistent inputs, so they really can’t be accurate or optimal. Watch carefully and you’ll probably notice prematurely applied algorithmic bids that are too high, too low, or change radically from one period to another.
Garbage in, garbage out. As they say.
On the other hand, when the relationship between search queries, keywords, and text ads has been thoughtfully managed or optimized, smart bid strategies or advanced algorithms can be an incredibly effective way to maximize sales and revenues.
Spend a lot of time on bidding… after you’ve spent a lot of time on everything else.”
I believe all of the above is as true today as it was in 2010. Although I’d rather not suggest to spend a lot of time on bidding. Ideally, try to spend no more than 20% of your time and resources on bidding, and preferably a bit less.
I’m not saying bidding isn’t important, because it is. Your bids have a large influence on your position and CPC (as has Quality Score), which on their turn have a large influence on your CTR and ROI. So those are some good reasons to care about your bids.
On the other hand, there are 2 reasons why you don’t want to spend too much time on calculating and changing bids:
Calculating bids is basically number-crunching, and as we know, with enough (predictable) data, software can do that better and faster than humans can.
A new bid doesn’t give you a long-term advantage over your competition as they can easily change their bids as well.
What does give you a longer term and even unfair advantage is having higher Quality Scores and/or conversion rates than your competition. In that case you’ll be paying less for the same click while getting more in return.
So it’s best to avoid tinkering with your bids all day and focus more on creative and strategic work that can’t be automated instead. Especially if that work can lead to the unfair advantages of higher Quality Scores and conversion rates, like writing great ad copy and improving your landing pages.
In this series, I’ve tried to provide guidelines that are sensible for most AdWords accounts in most cases, so that readers can check their own accounts and implement whatever advice makes sense for them.
However, when it comes to answering the question: what’s the best way to manage my bids? The answer really is: it depends. So I can’t offer a one size fits all solution today, but the goal still is to provide best practices that are sensible for your specific situation.
That’s why the rest of this post is divided in the following parts:
Before you start: profit-driven goals, optimal tracking and attribution.
Setting bids for new keywords.
Manual bidding with formula’s, filters, rules, scripts and the bid simulator. These methods are probably best for lower volume accounts or campaigns, generating less than 60 to 100 non-branded conversions a month, spending less than $10,000 a month or having no more than a few hundred keywords that matter.
It’s also the way to go if you want to keep full control of your bids, especially during sales or events like Black Friday, Cyber Monday, Super Bowl, Valentine’s Day, etc.
Automated bidding with AdWords flexible bid strategies. This method is probably best for medium to high volume accounts or campaigns, generating more than 60 to 100 non-branded conversions a month. The more conversions you have, the better it works.
Automated bidding with 3rd party technology. This method is probably best for high volume enterprise accounts, generating at least 500 non-branded conversions a month, spending $50,000 – $100,000 a month or more or having thousands of keywords that matter. It especially makes sense if you also advertise significantly outside of AdWords, e.g. on Bing, Yahoo!, Facebook or Display Networks outside the GDN.
This will make it the longest post in this series by far, which is ironic after downplaying the importance of bid management in the introduction. Nonetheless, it’s a complex subject with a lot of possibilities, so I hope you’ll bear with me and will find useful tips to apply to your campaigns and bids!
Before you start: profit-driven goals, optimal tracking and attribution
Before you can even calculate bids, whether it’s manual or automated, you need to have the following in place:
A profitable efficiency target like CPA or ROAS
Tracking all conversions and/or value generated by your campaigns
You could have multiple CPA or ROAS targets in your account (e.g. because of different margins) and that’s perfectly fine.
You could also care more about clicks, position or visibility than about conversions or revenue, and that’s also fine (well… sort of).
However, this post will not go any deeper into awareness-based bidding besides mentioning the automated flexible bid strategies that can help you with that: maximize clicks, target search page location and target outranking share.
It’s extremely important that your non-branded CPA or ROAS target takes the following into account:
Your margin
The part of this margin you’re willing to invest in acquisition
Based on these 2 inputs, you can easily calculate your target CPA or ROAS, as explained in the Goal Setting part of this series.
And to be truly profit-driven, you need to acknowledge the trade-off between volume and efficiency. This means you’re trying to find the target CPA or ROAS that maximizes your total profit in real Dollars, Euros, Pounds or whatever currency pays your bills.
Which isn’t the same as minimizing your CPA or maximizing your ROAS or ROI. Or as Google explains it in their Profit-Driven Marketing articles:
“Would you prefer an $80 CPA or a $90 CPA?
It’s actually a trick question, and the profit-driven marketer would say, “I don’t have enough information to choose between them.” Perhaps the $90 CPA lands your ad in the top spot on a search results page and brings way more sales volume than the lower-priced CPA unit. In that case, the correct decision is to spend more to make more.”
You can see the visualization of this example in the graph above. Obviously, if your current CPA target was $100 in this example, then the profit-driven thing to do was to lower it to $90. Somehow, Google forgot to mention that ;-).
The only way to find out your profit-maximizing target is to test with different CPA or ROAS targets (at least 20% to 30% higher or lower than your current target to make sure there’s a significant impact) and find out which combination of CPA or ROAS and conversions or revenue delivers you the most profit.
Optimal Tracking
As mentioned in the Measurement part of this series, you should track the full value that your campaigns deliver, so all this value can be taken into account when setting bids:
Obviously your macro conversions, typically leads or the revenue from sales
Micro conversions, such as newsletter subscriptions
And if applicable to your business, you should also track the value of:
Phone calls
App downloads
In-store visits
So if your goals and/or tracking aren’t optimal, it’s impossible for your bids to be. Being the 2 main inputs for any bid management, your goal setting and tracking need to be as accurate and complete as they can possibly be.
Attribution
And then of course, there’s attribution. Most of us are still bidding based on last-click attribution, and that’s mainly because it’s hard to:
Agree on an attribution model that isn’t last click.
Manually adjust your bids and budgets based on this attribution model .
The very least you should do, is ignore the last branded click if this was preceded by a non-branded click, a so called ‘last touch with brains’ model. If you don’t do this and have a lot of branded conversions in your account, you’re probably undervaluing your non-branded keywords and campaigns.
Once you do that, it’s not a complete disaster if the rest of your keywords are judged mostly on their last-click performance.
As Siddharth Shah wrote a few years ago in his analysis ‘Attribution: Busting the Myths’: “In short, if you are doing search primarily, changing attribution rules usually doesn’t change much. You typically see a 10-20% assist funnels and 5-10% non-brand to brand type funnels. For the most part, you are fine working with the last click. However, when looking at multi-channel data, when search forms a small component of the overall picture, multi-event attribution can matter.”
This is also what other experts found when digging into to the attribution reports (formerly search funnels): only a small percentage of keywords can justify their existence based purely on assists. In other words: attribution is no excuse to keep ‘upper funnel keywords’ running that are highly inefficient. If you want awareness, effective display campaigns will offer you just that, at CPM’s that are hundreds of times lower.
Or as George Michie states in one of his comments in the Cardinal Sin of Paid Search: “paid search is a very expensive channel for brand building. If we think of an advertising impression being a visit to your website (I don’t think there’s much of an impression given by the little text ads), then a $0.50 click translates to a $500 CPM. That’s an awfully expensive way to show people you exist.”
And for those of us that would like to be more sophisticated when it comes to attribution, but don’t want to lose a lot of time recalculating bids, there’s good news.
In their livestream in May this year, Google announced that advertisers will be able to select an attribution model (including data-driven attribution) in AdWords and that automated bidding will then be based on the chosen model.
Watch the part from my fellow Dutchman Joan Arensman about making attribution actionable to see how this would work.
Let’s hope this will be released soon, because until then, the alternative is to do quite some manual work analyzing the attribution reports and trying to calculate bids based on your chosen attribution model.
Setting bids for new keywords
If you just added a new keyword to your AdWords account, you may wonder what would be a good starting bid. As you have no click or conversion data yet, there are several options in this case:
The estimates you get for that keyword from Google’s Keyword Planner
Somewhere between the first page bid and the top of page bid estimate. But be careful: these estimates are often (way) too high when you just added a keyword. So wait at least a couple of hours (or days) before using these estimates.
The expected value per click based on your expected conversion rate or revenue per click for that keyword. You’ll find the formulas to calculate the value per click below.
Depending on your budget, aim for an average position between 2 and 4 to start with, so you can accumulate the necessary data to refine your bids later on.
Manual bidding with formula’s, filters, rules, scripts and the bid simulator
As stated in the beginning, manual bidding is best for lower volume accounts. For the purpose of this post, I’ll define lower volume as having less than 60 to 100 non-branded conversions a month. You’ll see why in the part about flexible bid strategies.
Manual bidding is fine for lower volume accounts because the time you need to calculate the right bids is limited and because you probably won’t benefit from the advantages of automated bidding, as automation works best with lots of (predictable) data.
Manual bidding can also be a (temporary) necessity during major sales, as algorithms will need at least a day (or more) to adjust to the effects of sudden spikes in volume, competition or conversion rates. That could mean the sale is already over once the bids have been adjusted to the right levels.
Value per click formula’s
Once a keyword has converted, you can easily calculate its value per click based on your target CPA or ROAS. Obviously, you’d rather have multiple conversions so your bids are based on solid data. Ideally, you’d calculate the bid based on the last 10 to 20 conversions.
For some keywords that means looking back 7 days and for other keywords you may need to look back 12 months.
The formulas to calculate the value per click of a keyword are as following:
For CPA targets: (keyword conversion rate) x Target CPA
So if a keyword converts at 1.8% and your target CPA is $75, then the value per click of that keyword is 1.8% x $75 = $1.35.
This is the CPC you’re willing to pay to reach your target CPA with this keyword. You could bid a bit higher than this as your average CPC will be lower than your max CPC.
For ROAS targets: (average revenue per click) / Target ROAS
So if the average revenue (or value) per click of a keyword is $8 and your target ROAS is 500%, then the value per click of that keyword is $8 / 5 = $1.60. Again, you could set you max CPC a bit higher than this amount.
Download a spreadsheet with the right keyword data.
Add a column in Excel that calculates the right bid by using the one of the formula’s above.
Copy and paste the calculated value per click as values in the Max CPC column.
Manually review the new max CPC’s, especially the extremes (highest and lowest max CPC’s): feel free to adjust these based on your own insights and CPC limits.
How to calculate your bid adjustments for mobile, locations and within ad scheduling has already been covered in the Campaign Settings & Bid Adjustments part of this series.
Nevertheless, it’s important enough to shortly recap and update this topic in this post.
First of all, the most important bid adjustment (that most people get wrong): the mobile bid adjustment. Google provides a clear formula and example in their Bid Like a Pro guide:
Why most people get this wrong, is because they don’t include the full value of mobile which can include more cross-device conversions, phone calls, in-store visits and app downloads. Google’s example clarifies this point:
Location and time bid adjustments are easier to calculate, by comparing the specific location or time efficiency with the campaign average.
I’d not recommend to compare it with the campaign goal (as Google does), as you’ll bid towards your goals at the keyword or ad group level, and bid adjustments are just a way of compensating for the deviation from the average.
And remember: once you use the target CPA or target ROAS flexible bid strategy, you don’t need to apply these bid adjustments anymore in the selected campaigns, as these bid strategies will factor in real-time data on device, location and time to adjust bids. Any bid adjustments you may have will be overruled by these target CPA or ROAS flexible bid strategies, with the exception of a mobile bid adjustment of -100%.
Using filters and rules
Not all your keywords have conversions and even those that have may need a closer look after applying the formula’s above.
That’s where filters and rules come in. I mention these 2 together as rules are essentially filters with a specific evaluation period and action set attached to them.
There are many ways to filter your keywords and attach bid rules to them, but my favorite framework when it comes to keyword filters and bid rules has to be Chris Haleua’s 3×3 Performance Segments. In this framework, you start by dividing your keywords in 3 main segments:
Back to keywords with data: you complete the framework by applying the following sub-segments to the main segments above:
Volume leaders: keywords with many conversions, clicks or impressions
Efficiency threats: inefficient (too high CPA/CPC or too low ROAS) or low quality keywords
Visibility Struggles: keywords in low positions
Once you combine these segments, you get a beautiful framework that can help you quickly zoom in and take action on the different kind of keywords. With filters and rules, we’re mostly interested in the outliers we need to take action on.
To get you started with the 3×3 performance framework (including the cool names for each segment) I’ve created the visuals below:
And to dive deeper into this framework and related materials, I’d highly recommend the following downloads from Chris Haleua:
Note: These downloads have been taken offline.
With the last Excel download you can even create a fancy 3×3 performance segment bubble chart that will surely impress your boss or client:
Once you get familiar with a set of filters that work well for your account, you can set up automated rules whenever you find yourself taking the same action under the same circumstances. The Bid Rule Playbook and Template Library downloads above should give you more than enough inspiration to create your own rules.
Bidding with AdWords Scripts
Not every ‘if then’ rule you can think of, can be translated into an automated rule. Besides, automated rules can’t run more often than daily and can’t use data outside of AdWords.
This is where AdWords scripts come in. To give you an idea of the possibilities of scripts when it comes to bidding, I’ve assembled bidding related scripts from the resources below, where you’ll also find the instructions to implement these scripts.
You don’t need to be a coder to implement existing scripts, just read the instructions carefully and copy-paste in your own account.
For a good introduction to scripts, I’d recommend these 3 presentations at SlideShare:
For your highest volume keywords, you may want to check out the bid simulator data every once in a while, as it’s the only place where you’ll get an estimate of what you can expect at different bid levels.
This is based on the last 7 days of data (including Quality Scores, competition and search volume), but doesn’t necessarily predict the coming 7 days.
If you have no reason to believe the coming 7 days will be very different in terms of competition and search volume, it should give you a good estimate of what to expect for each bid.
Let’s use the screenshot below as an example:
For this keyword, we can calculate the following based on the bid simulator data above. If we would increase our bid from €0.25 to €0.50, this would lead to:
An increase in average CPC from €0.15 to €0.30 (100%)
An increase in clicks of 62%
An increase in CTR from 1.59% to 1.71% (7.5%)
An increase in cost of 214% to €3,490
An increase in revenue of 60% to €10,100
A decrease in ROAS from 568% to 289% (€10,100 / €3,490)
This can help us in selecting the optimal bid: would we rather keep the current revenue of €6,300 at a ROAS of 568% or would we rather increase our revenue to €10,100 but half our ROAS to 289%. Or any of the scenario’s in between?
Please note that you may not see the conversion and revenue estimates if there isn’t enough conversion data in your account. In that case you could multiply the click estimates with the expected conversion rate (and average order value) for that keyword yourself.
Also note that real profit maximization happens when you take incremental cost per click (ICC) into account instead of average CPC. For an introduction on this topic, watch the classic Google AdWords Bidding Tutorial by Hal Varian. If the second half of this video seems a bit puzzling, I’d highly recommend reading Averages Lie! Bid Simulator and Incremental Marketing by George Michie for a deeper understanding, thanks to banana stands (as there’s always money in the banana stand).
Combine your newfound ICC knowledge with the estimates from the bid simulator and Tenscores’ free Bid Optimizer tool and you can find the ultimate profit-maximizing bid!
Obviously, this whole process takes quite some time, so it’s mostly worthwhile for your highest volume keywords.
Automated bidding with AdWords flexible bid strategies
I know, some people are fundamentally opposed to bid automation. And they especially have a hard time trusting Google to manage bids in the advertiser’s best interest.
But if they have thousands of keywords generating hundreds or more conversions a month, and they’re still bidding by hand, they’re missing opportunities.
Used correctly and under the right circumstances, AdWords flexible bid strategies can improve your results and save you lots of time when it comes to bidding. I’m talking about the target CPA and target ROAS strategies here as the other strategies are awareness-based.
You can use these strategies once the campaigns or ad groups you want to apply it to have received 15 conversions in the last 30 days. However, automated bidding works (much) better when you have more monthly conversions.
How many monthly conversions you ask? Well, Google has recently published conversion thresholds in their Setting Smarter Search Bids guide. This guide is a must read to fully understand how automated bidding works within AdWords.
And for the thresholds, I’ve summarized them in the table below:
As you can see, you need more monthly conversions for the target ROAS strategy and Google admits that target fluctuations and learning periods aren’t optimal below the 60 or 100 conversions a month.
If you’re below these thresholds, you could still benefit from Enhanced CPC (ECPC) and combine this with one or more of the manual solutions mentioned above. Or try your luck with target CPA or target ROAS, knowing it needs more learning time and target fluctuation is higher.
Once you’re above 100 non-branded conversions a month, it can work wonders and save you lots of time calculating and setting bids and bid adjustments.
There are 3 reasons why it can beat you at bidding, as you can read in the Setting Smarter Search bids guide:
True auction-time bidding: bids are set and signals are evaluated for each individual auction.
Adaptive learning at the query level: when keyword-level conversion data is scarce, it uses and learns from query-level data across your account.
Richer user signals and cross-signal analysis: when determining bids, many contextual signals (like user location, browser, device, etc.) are evaluated, including how certain signals work together and influence conversion rate.
The picture below shows the signals AdWords evaluates when determining bids at auction-time:
So if you have enough recent conversions in your campaign(s), it’s definitely worth trying out the target CPA or ROAS flexible bid strategy.
However, always keep the following in mind when automating your bids:
Keep monitoring your results and bids, especially when seasonality plays an important role. If you expect sudden changes on your website, your stock or external events that influence search or conversion behavior, it’s probably best to temporarily revert to manual bidding.
Realize the algorithm needs to re-learn after every change you make in the selected campaigns or ad groups. So minimize changes if possible, but obviously make changes whenever necessary, like testing new ad copy and adding negative keywords.
If your account has more than 500 monthly non-branded conversions, and especially if you’re advertising on multiple search engines or channels as social media and display, then it’s definitely worth investigating a third-party bid management solution.
Such a platform could save you many hours and improve the performance of your campaigns at the same time by providing 1 interface to manage your bids, reports and attribution across channels and campaigns. Obviously, each platform has its own algorithms, rules and capabilities and it’s important to make sure you select the one that best matches your needs.
Below you’ll find a list of well-known platforms to manage your paid media. Most of these platforms are targeted to enterprise advertisers spending $50,000 – $100,000 a month or more on paid media.
However, a few also have solutions for mid-market advertisers (let’s say between $10,000 and $50,000 monthly ad spend), those are indicated with *).
Most of these of these platforms charge on a percentage of ad spend model, usually somewhere between 1% and 5%, with the percentage decreasing as the spend increases. Next to this, most of them also charge an initial setup fee.
It’s important to realize that all these platforms evolve quickly, so their capabilities could have changed by now, compared to when these reports were released. So it’s always worthwhile to ask the platforms about their most current and upcoming capabilities.
There you have it! Probably the longest post ever written about AdWords bid management. I’m curious to hear your thoughts in the comments and hope you’ve found it well worth your time!
Bid Management: Your Audit Checklist
All Advertisers: Have you ensured that the relationship between search queries, keywords, ads and landing pages have been thoughtfully managed and optimized, before investing heavily in bid management? Do you bid towards a profit-driven efficiency target, based on the value per click? Do you track all the value that your campaigns deliver?
For lower volume accounts and campaigns: Do you make optimal use of bulk uploads, bid adjustments, filters, rules, scripts and the bid simulator?
For accounts or campaigns with more than 100 monthly non-branded conversions: Have you tried the target CPA or target ROAS flexible bid strategies?
For advertisers with more than 500 monthly non-branded conversions that also advertise significantly on other search engines, social media or display networks: Do you work with one of the established third-party platforms?
This is a guest post by Wijnand Meijer, Sr. PPC Strategist at iProspect Netherlands, an online media agency based in Amsterdam. He created his first AdWords campaigns in 2006 and is currently helping advertisers and coworkers alike to get their Paid Search to the next level.
Opinions expressed in the article are those of the guest author and not necessarily Certified Knowledge. If you would like to write for Certified Knowledge, please let us know
There are several different factors that affect Google AdWords Quality Score. It’s time to walk through each in detail and list the major contributing factors to each.First, it’s important to note why Quality Score matters. One’s Ad Rank(the position an ad shows on a search result or across the content network) is based upon max cost per click and quality score. The current formula is:
Ad Rank = [(keyword / ad group] quality score) X Max CPC
The reason keyword / ad group is in brackets is that for search the keyword quality score is used and for content the ad group quality score is used.
It’s very possible to pay less than your competitors and have a higher ad rank. Instead of raising bids, there are times when it’s more appropriate to raise quality score.
For keywords, every keyword has a quality score associated with it. So, when talking about the below factors, they exist at the keyword level. This is important to keep in mind when talking about ad copy (and possibly landing pages) as it will be associated with multiple keywords.
It’s important to note, this is the CTR on Google.com only. The search network CTR does not matter. The click through rate on the content network does not matter. Google.com is the only search interface that Google can completely control and measure, therefore, it’s the only place where CTR matters (in terms of quality score, there are some other reasons CTR matters for ad serving).
The CTR is normalized by position. AdWords understands that an ad in position 1 is going to receive (on average) a higher CTR than an ad in position 5. Therefore, they aren’t going to penalize the advertisers in position 5 for having a lower click through rate than the advertiser in the first position.
The CTR is predicted by keyword. Search intent differs by keyword. The search term ‘TV’ is very ambiguous. It could be a search for TV repair, plasma TV, TV guide, TV instructions, etc. Therefore, it’s predicted CTR is low. There are times that a 2% CTR may be well above the predicted, and hence 2% could be a very high CTR. In other cases, 2% may be quite low because the term is very commercial, the user intent well known, and those search results could have CTRs in the 8%+ range.
All time history is used. A keyword’s all time CTR history within your account influences the ranking algorithm.
Most recent CTR history. The most recent impressions for a keyword matter more than the all time history. In essence, a keyword can always be saved’.
Ad Copy
How closely does your ad copy reflect your keywords? Ad Group organization is key to starting this process. Your ad copy should describe each keyword in the ad group. Each search has a different user intent, therefore, your ad copy needs to take a user’s intent for that keyword as it relates to your website in mind.
Does your ad contain the keyword? Of course, each ad can not contain every single keyword. Google understands themes, stemming, and latent semantic indexing. If your ad does not contain the keyword (the closest match), does the ad copy contain the overall theme of the keyword? (Again, please read the ad group organization article as themes can be quite granular).
Note: the use of dynamic insertion does not mean your ad copy contains the keyword.
Quick Tip: If you split test ads, you can run an ad copy report that lists the CPC by individual ad. This may give you insight into how the ads are affecting your quality score.
Landing Page
The landing page is where a visitor is sent after clicking on an ad. Often, the quality score of a landing page and the usability of a landing page overlap from what is relevant to quality score versus what a business should be doing to provide a good user experience. Remember, Google thinks of searchers as their users, so they want them to have a good search experience so they come back to Google to search again.
The landing page should, just like the ad copy, contain the keyword or the keyword’s theme. It should also provide a unique experience for the user. Every time someone does a search, they are looking for an answer. Does your page help them find that answer?
A good example is a mortgage form. If someone searches for ‘3 year arm mortgage’, are you sending them to a mortgage form fill? Do they have the opportunity to understand the difference between a ‘3 year arm mortgage’ and an ‘interest only mortgage’?
Here’s a quick checklist for landing pages:
Does your page collect personal information?
If so, does it have an SSL certificate and a privacy policy?
Do you have an ‘about us’ page?
Do you have a ‘contact us’ page?
Do you have relevant information to the search query?
I’ll dig into the account quality score more in-depth later. However, the account quality score is used in the keyword quality score formula, so it’s important to define it somewhat.
If you think about all of your keywords and how many impressions and clicks each one received, you could ‘roll up’ your entire account into a single quality score. This is essentially how high (or low) of a quality your entire account has. While this has little impact upon the keyword quality score, it does have some influence. Therefore, under performing keywords can hurt your quality score.
Other Relevancy Factors
“There are over 100 factors that can affect quality score. However, not all will be triggered depending on the conditions involved.†– Google Engineer.
These other factors are items which you will have little or no control over, and won’t even be used at all times, therefore, it’s important not to get too concerned about this ambiguous statement.
If you think about the query ‘plumbing repair’ there are generally two main search intents:
Someone looking for a plumber
Someone looking for information to do it them self
In this instance, additional weight for IP targeting may not matter at all. (Other’s may, but in this instance IP targeting won’t make a huge difference).
When changing the query to ‘plumbing repair services’, or ‘Maryland plumbing repair’ odds are one is now looking for a plumber. Suddenly the geographic keywords can trigger IP targeted campaigns. And since it’s most likely a local query, a plumber who is serving ads only to Maryland may receive a little bump over someone bidding on just the keyword ‘plumbing repair’.
However, if the query were ‘plumbing repair books’, that’s not inherently a local query. So now the IP targeting isn’t helping at all, in fact, since one is most likely looking for book reviews or information to do it them self. In this instance, the national book chain bidding on ‘plumbing repair’ may get a bump over the IP targeting campaign bidding on the same keyword.
While these factors could be IP targeting, ad scheduling, personalized search, user location, user intent, demographic targeting, etc – they are small factors and should be understood, but not fretted over.
Closing Thoughts
Once upon a time, Google used a straightforward CTR X CPC method of determining ad rank. This maximized profits. The higher your CTR and the more you bid, the more Google made from each ad position. Quality score doesn’t maximize short term profits – it a move to maximize long term revenue. Google thinks of searchers as their users. If a searcher has a good experience on Google.com, they are more likely to come back and search again, click again, and increase lifetime visitor values.
What quality score does is try to ensure that searchers are having a good experience. If you make decisions around maximizing the user experience, odds are you will be maximizing your quality score in the process. This is not only good from an AdWords quality score standpoint, it’s also good for your website as users are more likely to come back to your site when they have a similar question.
If you are using automated software to change bids based upon some criteria, you shouldn’t just rely on the technology to make all of your decisions, you should also make sure you have a high quality score so that the technology isn’t just changing bids for low quality score keywords and ad copy. Since PPC is the new SEO, how do SEOs do their work? I don’t think you’ll see too many good SEOs automating all of their decision making processes (some – yes, all -no). The same goes for PPC.
Quality score can sound intimidating. It can be frustrating at times. However, once you start to break it down into each factor, and then maximize each of those factors, it’s a very manageable process.
Your quality score is one of the most important items you can understand and improve to help your AdWords rankings. The higher your quality score, the less you are going to pay per click, and the more potential exposure.
Doesn’t everyone want to pay less than their competitors and yet have their ads show higher in the search results?
Have you ensured that the relationship between search queries, keywords, ads and landing pages have been thoughtfully managed and optimized, before investing heavily in bid management?