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30 AdWords Tips in 30 Days - Day #27 - Create a Bid Strategy

AdWords is a unique advertising medium in that advertisers can only pay when potential customers take action on their Ads, and they determine how much they'll pay for that potential customer by setting a Max CPC Bid.  Strategically managing those Max CPC Bids can help with performance.


Tip #27 - Create a Bid Strategy


To launch any AdWords Campaign advertisers must set Max CPC Bids.  Max CPC Bids determine the maximum amount an advertiser is willing to pay for a click from a potential customer; essentially controlling all AdWords advertisers' costs.  Advertisers should carefully, thoughtfully, and strategically set Max CPC Bids.


First, let's take a look at what Max CPC Bids do - Max CPC Bids multiplied by Quality Score determine where an Ad will be ranked when searchers query Keywords.  Typically the higher the Quality Score, the more efficient Actual CPCs will be, but Max CPC Bids still play a big part when determining Ad Positions.


Carefully selecting CPC Bids, and applying them to Keywords, Campaigns, and Ad Groups is setting a Bid Strategy.


How to Create Bid Strategies?


There are many different ways advertisers can create Bid Strategies - the important thing is that advertisers set Bid Strategies in-line with their AdWords performance goals.


  • Priority Keywords/Products - Often advertisers are willing to pay more for Clicks on their priority Keywords and/or products.  A Bid Strategy could be created just for these Keywords.


  • High Converting Keywords - If certain Keywords are leading to great Conversions, consider create a strategy to attract even more Conversions, at an efficient CPA.


  • Low Converting Keywords - If Keywords have not led to a Conversion, consider adjusting the amount paid for those Keywords.


  • High Volume Keywords - Advertisers may consider adjusting Bids based on the volume of Impressions Keywords receive.  High Volume Keywords typically have more competition so Bids may have to be higher, and Position possibly increased in order to stand out.


  • Branded/Non-Branded - Typically Non-Branded searchers are higher up in the funnel, researching different options/Brands.  Branded searchers are more specific, and probably have a better idea on what exactly they want.  Based on that, advertisers could create Bid Strategies to have a different approach to where searchers are in their journey.


What can help with Bid Strategies?


Fortunately AdWords has several free resources that are available to advertisers, all within the AdWords Account - 


  1. Conversion Optimizer (only available for advertisers with Conversion Tracking enabled, and with 15 Conversions in past 30 days) - Conversion Optimizer will manage Bids based on advertisers' Conversion Goals.  When using Conversion Optimizer, advertisers set a maximum CPA amount, and the tool will adjust Bids accordingly.
  2. Automated Rules - Remember Tip #17 - Automated Rules?  One of the best uses of Automated Rules is to automatically adjust Bids based on certain criteria.  Rules can be set based on Conversions, based on positioning, based on Estimated First Page Bids, etc.
  3. Flexible Bid Strategies - Flexible Bid Strategies is probably the most powerful tool AdWords offers advertisers to manage their Bids.  By Setting up a Flexible Bid Strategy, advertisers can create strategies based on positioning, CPA, Return on Ad Spend (ROAS), etc.  What's especially nice about Flexible Bid Strategies is that they can be shared across Keywords, Campaigns, and/or Ad Groups.

There are also many third party tools that help advertisers manage Bids, advertisers just have to pay extra for those.


Finally, to reiterate an important point, when creating a Bid Strategy, make sure to select and manage one that it is right for your performance goals.

about Brian Valentini

Chicago-based husband and father who likes sports, traveling, and laughing. Excited about the field of Digital Marketing, especially Paid Search. Work-life = Vice President/Director of Search Marketing at DigitasLBi, a global digital marketing and technology agency.