Do you ever set the max cost per click (CPC) for keywords only to sit back and wonder whether or not that’s how much you should bid?
In this post, I’m going to discuss three advanced AdWords features you can use to find the lowest cost per click with the highest conversions. Learning about each of these features will help you to lower your costs and increase conversions for AdWords campaigns.
Strategy #1: Conversion Estimates and CPA Forecasting
Most people are conocido with the Google Keyword Planner tool, but did you know you can now use it to estimate the total conversions and cost per acquisition (CPA) for your campaigns?
Now, instead of just seeing the cost per click and impression or search volume for each keyword, you can see Google’s estimate for your cost per acquisition and total conversions based on previous account performance. This is a powerful way to shorten the time to finding keywords that have significant search volume and that can be acquired at a low CPA.
To use it, log in to AdWords and then click on Tools and then on Keyword Planner. Merienda there, click on “Get traffic forecasts for a list of keywords.”
After clicking, add keywords and you’ll get taken to a daily forecast page. At the top of the page you can enter a bid and daily budget, and the estimates will change accordingly. You can also look at the traffic estimate graph to see at which points your bids will begin to reach a point of diminishing returns.
In the example above, Google estimates a cost per acquisition of $186 to $277 with a bid of $2.50 per click and seven to eight clicks per day. If you bump that up to $5 per click, the CPA estimate goes up to $329 to $402 with only an estimated two more clicks delivered per day. This, as you can see, is extremely helpful data for estimating the CPA and total conversions for a keyword based on how much your bidding per click.
Strategy #2: Know Your Enemy
Sun Tzu’s art of war teaches that “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained, you will also suffer a defeat. If you know neither your enemy nor yourself, you will succumb in every battle.”
This also applies to PPC campaigns. If you only understand your own campaign, you can do decently well, but if you understand your campaign and your competitor’s campaigns, you’ll be much more successful.
One way to find out who you’re up against is to use Google auction insights, which reveals who you’re competing against for your keywords. It also shows what percentage of time your ads show up for the keywords you’re bidding on and whose ads show up above yours.
To use auction insights, log in to AdWords and then click on Details just above the list of ad groups and select “All” underneath Auction Insights.
The first view you’ll see is a list of your impression share, promedio position, overlap rate, position above rate, top of page rank, and outranking share at the campaign level. You can also sort by each of these criteria to see how you stack up against your competitors.
Next, click in to the ad group or keyword level to see how each of your keywords compare to the rest of the advertisers.
What can you do with this data? How does knowing your impression share and who you’re bidding against make you more money?
The most common action item is to raise bids to increase your promedio position. Or if you’re already in position one but you’re not getting all of the impression share, you may need to raise your daily budget so you get more impressions before your ads go offline.
How you monetize this data depends on your strategy and goals. For some ad groups, you’ll want the highest impression share possible because these are the most profitable keywords. You may learn that you can only make money at high positions, but can’t afford to be online 24/7, in this case you may be ok with a lower impression share as long as the position stays above 2-3.
For even more data on what these advertisers are using for their ads and landing pages, you can plug your competitors into a tool like iSpionage. Competitive intelligence tools reveal all of the keywords your competitors are bidding on, the ad groups they’re using, the ad copy they’re running, and which landing pages they’re directing traffic to.
You can use this information to learn even more about your enemy, I mean friendly Google competition. Adjust your campaigns accordingly by adding new keywords, testing new ad copy, or creating a unique landing page or offer, etc.
Strategy #3: Bid Simulator
My favorite most powerful bidding strategy tip is the AdWords bid simulator.
To use it, click on Columns while looking at keywords within an ad group and then click on Columns and then Customize Columns. Near the middle of the list you’ll find “Bid simulator” where you can add new columns for the estimated number of clicks if you reduce bids by 50 percent, the estimated number of clicks if you increase bids by 50 percent, etc.
In the example above, you’d gain approximately seven clicks by increasing the bid by 50 percent, 28 clicks by increasing the bid 300 percent, lose 12 clicks by decreasing the bid 50 percent, and gain seven clicks with a top of page bid. This data can be used to inform your bidding strategy so you can decide whether or not it’s worth increasing your bid amount and how much based on the conversion history you’ve built up for your campaign.
You can beat the competition with a better keyword bidding strategy by utilizing these AdWords features and competitive intelligence tools. By leveraging this data you pay just enough per click to maintain the highest ROI and positions but never over pay.
Previously, you had to manually spend your time and money to figure out how much to pay per click, which position was the most profitable, and how different bid levels affected conversion rates. Now, with these three powerful AdWords features, the process is automated, and you can optimize your bidding strategy with forecasted conversions and cost per acquisition (CPA).
You shouldn’t trust the estimates 100 percent, because they are of course just estimates, but you can use the information to see who you’re up against and to select the correct keyword prices to improve campaign performance without having to spend as much time and money. Please join the conversation below and add any additional comments or features that you feel help your bidding strategy.