AdWords Bid Management: Our Essential Starter Guide

Pay-per-click advertising is an excellent way for a business to increase their online presence. If natural SEO techniques are taking too long to improve your visibility in search, PPC can provide the answer. However, it’s also a form of advertising that’s easy to get wrong. One of the trickiest things to get right is your AdWords bid management. If you’re successful, you can create campaigns that give you a good yield in terms of ROI. However, poorly managed PPC activity can end up costing more money than it generates.

Newcomers to PPC and AdWords should definitely get some assistance. Whether you spend time researching articles such as this one, enlisting an agency, or purchasing software, it can give you a massive boost. In this article we’ll cover all of the basic details you’ll need to successfully manage your AdWords bids, from the research stage to analyzing and adjusting. We’ll also demonstrate why TEA Software can help, particularly with providing insight and improvements.

How AdWords Works

Hopefully you’re already somewhat familiar with what AdWords is and how it works. Just to be sure though, we’ll recap the basics of how AdWords work in relation to PPC. AdWords is Google’s advertising system. It allows businesses or individuals to purchase advertising space in Google’s search engine results page (SERP). You can create ads that appear when certain keywords are searched for. The ads appear as clickable links with an ‘Ad’ marker next to them, usually at the top and bottom of the SERP. Google charges per-click for this ad space, meaning that every time someone clicks through to your site on one of these ads, the pre-determined cost per click (CPC) is charged against your account. It means you get more visitors and Google gets more money.

As an advertiser, you can set how much you want to bid per-click. If you’re amongst the highest bidders, your ad will likely appear, and you can set a budget and time scale for how long you want it to be active.

We say ‘likely appear’ because there are other factors that affect which ads appear. One such factor is your Quality Score; this is a measure of how relevant your ads are, how long you’ve been producing good-quality ads, and how good your ad copy and landing pages are. Your actual CPC is calculated by the ad rank of the next highest ad below you divided by your Quality Score. The only exception to this is if you’re the only one bidding on a term, in which case your highest bid price is charged.

Now that we know how AdWords works in principle, let’s look at the steps you need to take for successful AdWords bid management.

AdWords Bid Management: First Steps

Your first task is to determine what keywords you should be bidding on. Google’s own keyword planner is an excellent resource for this, and there are many other tools that offer good insight. You’ll want to find keywords that your customers and potential customers will relate to your business. This is often quite a length task, as you’ll want quite an extensive list.

Once you have your keywords list, it’s time to utilize tools such as SEM Rush and Google’s AdWords planner to find out how much you should be bidding for on each one. You may not want to aim right for the top of the ads results to start with; it can be costly and may not yield the results you desire. Instead, try and aim for the middle of the pack. This gives you leeway to adjust your ads and improve your Quality Score. Try and check what your competitors are doing (again, SEM Rush is great for this) to try and get a better idea of how to position your bids.

AdWords Bid Management: Going Live

Going live with your bids requires a number of elements to be in place in addition to your bids. The keywords you are bidding on should be grouped together by relevance, the more relevant the better. Each group should have some compelling ad copy and an excellent landing page. All of these components will contribute to your Quality Score, so it’s more than worth effort to get this right.

The key metric you’re looking to maximize here is your cost per action, or CPA. This metric represents how much your business pays in order to attain a conversion. When taken into account along with your sales, operating costs, and margin, you should have an idea of how much you want to pay per conversion. As Wordstream outline, CPA can be calculated by dividing your total costs by total conversions for a given period. In terms of PPC ads, your cost is the number of clicks you get multiplied by your CPC. CPA can also be found by dividing CPC by conversion rate, and therefore, CPA multiplied by conversion rate will give you your CPC. With these figures in mind, you should be able to determine your ideal CPA, and place AdWords bids accordingly.

AdWords Bid Management: Adjusting Bids

Once your ads are live, hopefully the traffic comes rolling in and the sales increase. However, your work is far from done. Successful AdWords bid management requires considerable attention. Your initial bids should test the waters. You should soon have sufficient analytics data to be able to identify the ads that are working, and the ones that aren’t. Hopefully you have some goals in mind as to what you want your PPC advertising to achieve. This could be a CPA as we’ve mentioned, or a particularly conversion or sales rate. You’ll likely need to hone your ads to achieve these.

The biggest mistake when running an AdWords campaign is to set up your ads and just leave them running without checking back in. It’s usually a waste of money, and the time you’ve invested to get that far. Look at how your ads are doing; is one group far outperforming another? If so, it’s maybe worth diverting funds to the more successful one. A/B testing can really help with this. Is the CPA too high on certain groups? You may want to slightly lower the bid on these, or focus on groups with a better conversion and lower CPA. Regardless, you’ll need some solid analytics to assist with your bid adjustment.

AdWords Bid Management: Leverage Analytics

We can’t stress the importance of using your analytics to improve your AdWords performance. When used correctly, it can boost the ROI of your PPC activity, identify areas of your website to improve, and gain valuable customer insight. Although your conversion rate, CPC, and CPA are key metrics to look for, one of the oft overlooked elements of PPC is clickfraud. As you know, you’re charged every time someone clicks on one of your ads. But what happens if the source of this traffic is malicious? It’s not uncommon for automated botnets to hijack your PPC campaigns by sending traffic through your ads that will never convert. Not only does this skew the results you get, it costs you money.

Identifying clickfraud can sometimes be hard, but doing so means you can both block this traffic and ask Google to refund you for money spent on it. Analytics can also help you move quickly in adjusting your bids. Google’s automated service for bid adjustment can sometimes take 18 hours to refresh, meaning you might miss valuable opportunities to save money if you rely solely on that system. It’s in both of these areas that TEA Software comes in useful. It can help prevent clickfraud and make your AdWords bid management easier.

AdWords Bid Management: Use TEA

You may be asking, ‘what is TEA software?’ TEA stands for thread and engagement analytics. It’s a powerful software suite that we’ve developed to assist businesses with their PPC activity. There are a range of features that are designed to prevent clickfraud and give you in-depth customer insight. Below are some of the unique and exciting features TEA provides:

Clickfraud Elimination

We’ve mentioned what a blight clickfraud can be on your AdWords activity. The advanced TEA algorithm is capable of identifying real customers and bot traffic. By examining how the user interacts with the webpage, TEA can spot clickfraud and block the IPs it is coming from. It will also generate a report that you can use to get a refund on ad money spent on this traffic.

Ad Campaign Optimization

Our automated AI system can help you make the most of your AdWords account. It closely monitors real-time data in order to make adjustments by the hour, rather than by the day. This means that opportunities aren’t lost and you can hopefully decrease your CPA.

Customer Engagement

TEA can give you valuable insight into how visitors to your site interact with it. With this data, the thousands of algorithms that power the software can identify trends amongst your customers. It then suggests actions you can take to improve conversion rate.