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Need Help Determining Default Bid

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

I have determined that 1 in 92 visits to my site leads to a sale on average of $200. I am trying to use these numbers to determine how to proceed with my adwords campaign, most notably what Default Bid amount to set for the campaign to be profitable. Can anyone throw some information at me to help determine my budgets here? Thank you in advance. 

1 Expert replyverified_user

Need Help Determining Default Bid

Rising Star
# 2
Rising Star

Hi Scott,

 

You are looking at it back-to-front. 

 

 

The bid you need for your ad to show is determined by the marketplace (it is an auction), not what will be profitable for you.

 

And you won't know what bid is profitable for you until you start advertising and optimise based on the results.

 

The normal way is to:

 

determine the keywords that are most likely to convert
bid high enough to show in the top 4 ad spots

use conversion tracking to see if the keywords are profitable

refine bids and ad copy until the keywords are profitable

continue with the ads or give up

 

Need Help Determining Default Bid

Badged Google Partner
# 3
Badged Google Partner

You do need some more information and account history before you start trying to use this kind of bidding approach. If you know your conversion rates and CPA for profitable terms are, then you can get into some more advanced bidding and budget estimates/strategies. The theory is sound, but like @RobSkelton said, there's more to this equation, and you need to take that front end data into account.

Tom