Choose a bid amount that works for you
- If you're just starting out in AdWords, go with a budget and bid amount that you’re comfortable with. Use bid adjustments to increase or decrease bids based on your customer’s device, location, time of day, and more.
- After your ads have run for awhile, evaluate which keywords are more effective in bringing in sales, using reports in your account.
- Adjust your bids to spend more on keywords that are proven to work. This can improve your ad position for those keywords and attract more customers.
- Use Google tools to get custom bid estimates based on your advertising goals and performance history. You can also set up automatic bidding to let Google do the work for you.
Choosing your first bids
Bids are like hairstyles: there's no one recommended bid amount that works best for everyone. The right bid for you will depend on the cost of your keywords, the type of campaign you're running, and your profits.
Most people starting out in AdWords use cost-per-click bidding to pay for each click on their ads. With this option, you set a maximum cost-per-click bid (max. CPC bid) that's the highest amount that you're willing to pay for a click on your ad. So think about how much an ad click is worth to you. If you’re unsure what bid to start with, try setting a max. CPC bid of US$1. This max. CPC bid will be applied to the keywords you choose for your ad group.
Let's say you own a skateboard shop and you make US$10 from every skateboard purchase. You've seen that on average, one in 10 visits to your website results in a purchase. If you set a max. CPC bid of US $1, you’ll break even (advertising costs = sales).To make a profit, you should spend less than US$1 to get a click on your ad, which means you’ll want to set your max. CPC bid below US$1.
You can change this ad group default bid at any time. If certain keywords are more relevant than others for your business, you can choose to set different bids for them in order to increase your chances of having your ad appear when people search with those keywords. With enhanced campaigns, you can also set bid adjustments to increase or decrease your bids based on whether someone is searching from a mobile device, at a certain time of day, or from specific locations.
Say you run a store in San Francisco and you’ve set a max. CPC bid of US$1. You could use bid adjustments to increase your chances of showing your ad to customers in your neighborhood. For example, you could set a +20% adjustment for nearby zip codes, resulting in a final bid amount of US$1.20. Here's the math:
Starting bid: $1
Location adjustment: $1 x (+20%) = $1.20
Resulting bid for nearby searches: $1.20
Evaluate your costs and revenue
Once your ads have been running for awhile, evaluate their performance. Some questions to consider, if your goal is to drive sales and website traffic:
- What keywords lead to the most clicks on your ads?
- What locations and devices are your customers searching from?
- What are the peak days and times for business sales?
To answer these questions, dig into the AdWords reports in your account. For instance, to see how many clicks you’re getting per keywords and how much they cost, go to the Keywords tab in your account. Try filtering your keywords by clickthrough rate to see which keywords get you a lot of impressions, but few clicks. If your goal is to generate sales, these are the keywords that are probably not working so well.
You can also find similar geographic and time reports on the Dimensions tab. To see what devices people are using when they click your ad, segment your statistics by device.
To understand whether clicks are leading to actual sales, we recommend setting up Conversion Tracking for your account. This free tool shows you what happens after people click your ad, whether they purchased your product or signed up for your newsletter. With this information, you can calculate your actual AdWords return-on-investment (ROI).
- Don't have the time to evaluate your bids? Let Google do the work for you. With automatic CPC bidding, you set a daily budget, and AdWords will help adjust your cost-per-click bids to receive the most possible clicks within your budget. Or if you have specific performance goals in mind, try flexible bid strategies to have AdWords adjust bids based on your goals.
Adjust your bids to increase your ROI
Once you’ve identified which keywords, locations, times, and devices are leading to great sales, you can adjust your bids accordingly.
For instance, if a keyword has a low average CPC but each click converts well, you may try increasing its max. CPC bid. This could improve the ad’s average position for that keyword, giving your ads more exposure and potentially increasing your ROI. If a keyword has a high average CPC but clicks seldom result in conversions, you may try reducing its max. CPC bid. A lower max. CPC bid is likely to decrease your ad’s average position for that keyword, the number of impressions and clicks it receives, and, as a result, its cost. Not only can this strategy improve your ROI on low-performing keywords, but it frees up part of your budget to invest in more valuable keywords. Over time, if it continues to perform poorly, you may wish to delete that keyword entirely.
Similarly, consider boosting your bids in locations where your performance is stronger. Or if you tend to see less foot traffic to your store during certain hours, you could increase bids for that time period and run ads with promotional offers to drive more people to your business.
A couple things to keep in mind when thinking about bidding changes:
- We recommend changing your bids in small increments. Once you've made edits, see how many clicks and conversions your keywords begin to accrue before editing again. Also, remember that Internet traffic is always changing, so it's important to re-evaluate your bids regularly.
- Remember it’s possible to improve your ad's position by improving the quality of your ads, keywords, and website, without increasing costs. The higher the Quality Score for your keyword, the less you pay for a given ad position, and vice versa.
- Clickthrough rates are often lower on the Display Network, because it can be harder to get a reader's attention. If you’re showing your ad on the Display Network, you can set a Display Network Max. CPC bid for clicks that happen just on the Display Network. Similar to how you would evaluate keywords, if your ads perform well on certain placements, you can consider raising the bid for those placements. You can also set bid adjustments to increase or decrease bids for different targeting methods.
- Instead of paying by clicks, you can pay by the number of times your ad is shown. That's called cost-per-thousand impressions (CPM) bidding, since you pay for every 1,000 times your ad appears. If you're mostly interested in getting your name or logo in front of lots of people, this is a smart option.
Besides automatic bidding, Google offers several other tools to help guide you in choosing a bid that will work for your goals. After your campaigns run for a few weeks, our tools will have enough information to give you more personalized recommendations:
- Bid Simulator: Get answers to "what-if" scenarios, such as "How many more impressions would I get if I raised my bid by $0.10?". This tool can help you tweak your bids to just the right level for you. Learn more abut the Bid Simulator
- First-page bid estimates: Want your ad to show at the top or within the first page of Google search results? See how much you'd need to bid to get there.
- Opportunities tab: Visit this area of your account to see opportunities to improve your CPC bids, which can help you get more traffic, improve your Ad Rank, or improve your performance.