Pay Per Click Bid Management - Step Three

4. Effective PPC Bid Management, 4.6 PPC Bid Management-Step Three

Effective Bid Management - Step Three: Filter keywords that generate Conversions but Negative ROI or higher than your target CPA.

If your PPC account is structured keeping your business goals in mind and you have a solid keyword list in the account, you will only have a handful of keyword fitting this profile and for that matter only a handful of keywords converting in your account overall (80-20 rule always). Ask yourself questions:

• Is the Max. CPC too high?
• As a result is the Avg. Position too high and therefore generating a lot of junk traffic and bringing down your overall Conversion Rate?
• What is the CPA or ROI goal and how does it compare to the CPA or ROI of the keyword?

Based on your business setting, use any formula you wish to use to adjust those bids. I personally tend to use the following formula the most:

(Target CPA/Actual CPA) X Current Max.CPC

Notice I dint provide you with a formula to use if you are chasing an ROI goal. Reason being, using ROI as a an element in a formula can sometimes come up with outliers for bids and therefore I try to shy away from it. If You have an ROI goal, figure out what CPA value will help you achieve that goal and use the formula above to calculate bids. I am open to any suggestions for bid calculation using ROI as a metrics from any of the readers of this blog.

• It is advised that you base this decision on a large chunk of data - hence the first logic to check if there is at least 2 months worth of data available.
• Depending on your product/service, only a weeks worth of data might be enough for you to conduct this analysis due to the high volume of Impressions, Clicks, & Cost.
• Always keep track of your Ad Copy and Landing Page changes as that can effect conversions too.

This helps identifying Keywords that have:

• High PPC & High Conversion
• High PPC & Low Conversion
• Low PPC & Low Conversions
• Low PPC & High Conversions

Lost Impressions, Clicks, & Conversions:

• Could be due to Seasonality?
• Could be due to Increased Competition?
• Could be due to previous PPC Bid optimization (maybe a keyword was not converting as effectively, or bid was decreased aggressively)?

Related posts

• Pay Per Click Bid Management - Step One (0)
• Pay Per Click Bid Management - Step Two (0)
• Pay Per Click Bid Management - Data Storage & Filtering (0)
• Elements of PPC Account Optimization (0)
• Shopping for an Effective PPC Bid Management Tool (2)

@ August 14, 2008