Tips to Create an Effective Paid Search Bidding Strategy

When you bid in paid search, it pays to have an effective paid search bidding strategy to extract the most out of each click and keyword. Here are some important tips that need to be implemented to create and implement your strategy.

Even before you create your strategy, you need to ensure that you have a perfect Quality Score since you need to maximize your Quality Score so as to lower your average CPC on aggressive positions. You need to check the structure of your account and indulge in ad-copy testing before you proceed.

In addition, you also need to confirm if you have a stable ad group structure since the past few weeks so as to extract historical data based on keywords, ad groups, and your campaigns. Once you have done the above, you need to extract keywords buckets based on different performance levels from your paid search program. For example, you can create a bucket named as Bucket 1 that is based on Brand keywords with a 5 Dollar CPA and which requires 20 clicks to reach a conversion.

Similarly, you can assign different buckets with different numbers and base them on Generic keywords, your Competitors keywords, etc., with different CPAs and clicks required for conversions. After defining the desired buckets, you can analyze them to study the behavior of consumers, the LTV or lifetime value, and specific rules for bidding on specific buckets.

Once you analyze the number of days as well as clicks required for each specific bucket to achieve 90 percent of total conversions or any other percentage that you wish then you may witness behavior trends by your consumers. As the default AdWords cookie window is for 30 days, you may not be able to do a lot regarding consumer trends and you may anyway be able to use the last-click model as your revenue attribution model. However, other tools can be used to set complex revenue attribution models for more days, which in turn will help you optimize keywords at the top of the funnel.

Next, you need to extract reports based on your users rather than on keywords. This will depend on your reporting tool. However, you need to get data on conversions and revenue generated by unique users rather than only getting reports based on keywords and clicks leading to conversions. This step will help you calculate the LTV of each bucket while remembering that generic terms may deliver higher LTVs.

These LTV figures can now help adjust your CPA and Return on Advertising Spend targets when combined with Average Order Value analysis. You can also dig deeper to separate existing customers from new ones as there is a high correlation in LTVs for new customers as compared to existing or repeat ones.

Once you extract reports for each bucket, you can begin creating customized bid rules logic for every bucket. Your bid rules should focus on CPA targets that are adjusted for LTVs and should be based on cookie windows and click-thresholds that were calculated earlier. You can even adjust long-tail keywords from keywords data extracted right from ad groups and even from account levels.

The above paid search bidding strategy is based more on the behavior of your consumers rather than mere clicks and will certainly help in making goal adjustments and automate your bids from a better-structured account. You will also be able to take advantage of specific marketing promotions and seasonal trends by further fine-tuning your bidding strategy.

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