Day 33 of 100 days of AdWords help is here! If you missed the last post catch up here. Today we are discussing why bidding more, not less, will take your campaign to the next level.
Why Bidding Less Won’t Get You The Results You Want
Most conventional advice will usually advocate for spending the least amount of money. This is something we are used to doing in our daily lives, look for the best deals. While in most cases getting things for the cheapest amount can make great business sense, the adage of “You get what you pay for” rings true when it comes to paid search.
The need for a good budget is that it’s the easiest way to beat the competition. Having a high CPC makes you very competitive as you are setting a bar that other competitors cannot reach. Also, bidding on those high priority keywords and positions allows you to gain more traffic, which inevitably leads to more conversions. Ranking on search is a high priority for a reason, so make sure you have the budget to be competitive.
How Do I Stay Profitable?
The next question is how do you stay profitable while also bidding on these higher CPC keywords and positions? This is when strategy comes into play! Creating strategy for increased AOV(Average Order Value), increased CR(Conversion Rate) and increased Lifetime Value allows you to bid high and stay profitable. That is why having a great strategy and plan backed by numbers comes into play.
An easy calculation to see where your target CPC should be is (CR * AOV)/ Target ROAS. Using this calculation is a quick way to see where you can improve your bids and get the most out of your ad spend. At the end of the day bidding high, usually, leads to more returns than losses.
The two key points in PPC are traffic and conversions. Seeing which strategies can be created to increase the likelihood of someone clicking on your ad, and then maximizing the chance that they will convert and become a patron. Bidding higher just allows for these goals to happen with more frequency.
So watch this week’s video to learn a little bit more!