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How much should I bid for a keyword?

How much should I bid for a keyword?

Why is important?
Finding how much revenue your keyword generates allows you to set up the most profitable bid for your keyword and to make strategic decisions about bidding and budgets.

Keyword Planner | Get search volume and forecasts
TOOLS & SETTINGS > Keyword Planner > Get search volume and forecasts.

Type in the keyword you want to advertise > GET STARTED > HISTORICAL METRICS.

Google Ads shows you ‘Top of the page bid (low range)’ and ‘Top of the page bid (high range)’.

‘Top of page bid (low range)’ shows the lower range of what advertisers have historically paid for a keyword’s top of page bid, based on your location and Search Network settings. ‘Top of page bid (low range)’ is the bottom results on the first page.

‘Top of page bid (high range)’ shows the higher range of what advertisers have historically paid for a keyword’s top of page bid, based on your location and Search Network settings. ‘Top of page bid (high range)’ – this is the top results on the first page.

In this example, the keyword ‘Top of the page bid (low range)’ shows £26.66, and ‘Top of the page bid (high range)’ £51.72.

These are just estimations, and your CPC (Cost per click) may vary once your keyword enters the Google Ads auction.

However, predicted clicks and estimated conversions can give you an approximate idea of how a keyword may perform for a given bid.

Bid simulator
The bid simulator allows you to see how your ad may perform with different bids.

In this example, the keyword is marked ‘Below first page bid’ (£7.38).

Select your keyword and click the bid simulator.


The bid simulator evaluates your ad’s performance for the past week, and you get an estimation of Top impressions, Clicks, Impressions, Conversions and Total conversion value.

This info helps you to decide how much you should be bidding for your keyword.

However, before you increase your bid, consider that a higher bid does not automatically translate into a higher number of conversions.

In this example, the keyword’s current bid is £6.40 for 5 conversions, and the cost per conversion is £100,40.

To potentially increase to 6 conversions the suggested bid is £21,90. This is an increase of £15,50 per click. Although the keyword has a good transactional and commercial intent, it is not worth increasing the bid as it would increase the cost per conversion from £100.40 to £260.00 (estimated cost £1,560/6 conversions).

Columns
The clicks and cost columns will only appear if you have met a minimum threshold of clicks within the last week.

The Top of page impressions column only appears if you are estimated to receive at least one top of page impression for any of the bids simulated.

The Conversions and Total conv. value columns only appear if you’re using Google Ads conversion tracking, and you have received a minimum threshold of conversions within the last week.

The Additional budget/day required column may only appear in the bid simulator at the campaign level.

If your keyword does not receive enough performance data, when you over the square icon beside the keywords Max CPC, you may see a message saying Keyword bid simulator is not available.

64-keyword-simulator

Watch Video.

Est. first position bid | Est. first page bid | Est. top of page bid
Find out how much you should bidding to get to the top positions.
Keywords > COLUMNS > Modify columns > Attributes.
Check Est. first position bid | Est. first page bid | Est. top of page bid.

Google Ads gives you an estimation of bids and positions.

However, irrespective of the estimation, your Quality Score influences your bid.

A high Quality Score allows you to bid lower than your competitors, but your ads could still show up in a higher position.

Best practices
Experiment with different bids
– If you are not sure how much to bid for your keyword, create a new Experiment to change your existing bid.
Test your Experiment for a couple of weeks to find the optimal bid based on your keyword’s performance.

Bidding Strategy
– Your ad rank is influenced by your CPC (Cost per click) bid, your Quality Score and other factors.

However, your bid should not just be based on clicks and impressions and positioning.

Your bidding strategy should be based on your goals, such as conversions, conversation rate, profit, ROI, ROAS, etc. instead, and these should determine your best position.

Analyse and compare your historical data to evaluate how much revenue your keyword generated and if it is worth increasing or decreasing its bid.

Ultimately, bid for the position that converts the most.

Target impression share
– Recently, Google has launched a new Smart Bidding strategy: Target impression share.

There are three options for this strategy:
Absolute top of the results page – the first position at the top of the first page of search results.
Top of the results page – among the ads at the top of the first page of search results.
Anywhere on the results page – anywhere on the search results page.

If you implement this strategy, Google Ads automatically set your bids to achieve your shared goal.

Watch video.

Watch it on YouTube (Larger version)


Extract from my Book ‘Making Google Ads Work’.

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