PPC Bidding Basics

Before digging into unique bidding rules, let’s look at two basic truths of PPC bidding.

Truth #1 

You only have two objectives when making a bidding decision.

This is most probably oversimplified, but I do think it’s worth pointing out just to prevent us from getting too caught up in data analysis. The two key objectives are:

Objective 1: Decrease bids in low performing areas (keywords/ad groups/etc).

Objective 2: Increase bids in high performing areas.

There are many complexities that are involved in each of those objectives.

  • How much should we adjust the bids?
  • How do we determine what is a low performing entity
  • Are we tracking lifetime value or just utilizing the immediate data to which we have access.

These are important questions, but really at the core of what we’re trying to do is one of two things: 

  1. Should we adjust bids on these terms and, if so,
  2. Should we adjust them higher or lower?

It’s important to not get too caught up in everything else. Bidding rules, even complex ones, can be simplified into these two objectives. 

Truth #2

You need to focus on the right data to make a bidding decision.

Data collection is essential to making bid changes, however, the person with the most data doesn’t necessarily win.

What’s important is data quality. In google ads, there are hundreds of data columns we can use to analyse keywords, and for large accounts, it’s simply not necessary to look at all data points under a microscope.

Below are a couple of variables I ask myself before optimising are as follows.

Is there enough traffic?

To start off, you usually analyse data points such as impressions, clicks, or spend that ensures you have enough data to make a good decision. If you can’t get enough data for this point, then the best way to fix this is to increase your date range to 30 days instead of 7 or 180 instead of 60 etc. Having tested a wide variety of date ranges I find that for high traffic accounts, 7 days is best for immediate analysis, I’ll then use a bigger picture view of 90 days. This way, I can identify whether something used to be performing or has always been problematic.

If it was performing before, why not now? What has changed? These are the types of questions that improve you as a PPC marketeer

Is it profitable?

This is the one of which we’re all most aware. If the return on ad spend (ROAS) isn’t great, you’ll probably want to lower the bids. If the ROAS is great, you may want to consider raising your bids to be even more competitive and bring more sales.

If it’s a lead gen client, you’ll likely want to analyze CPA based on lead, or even better, based on ROI from the clients lead data.

The key takeaway from this is would definitely be to ensure that you analyse carefully before making any bid decisions. Remember, quality beats quantity!


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