How to Manage Your Bids in AdWords

Live auctions can be stressful and loud and confusing. Thankfully, the digital
auction of PPC advertising is much more manageable with a lot less gavel
pounding.

But don’t be lulled into complacency. You could be wasting money or missing
valuable opportunities if you don’t manage your bids with the same attention you
would bring to a live auction.

So how should you manage your bids?

1. Use the Help

Google gives recommendations when you
initially launch an AdWords campaign. These recommendations can be a bit
vague, and are certainly not the only things to consider, but they are at least a
starting point.

2. Make your Bids Competitive

It’s important to place your ads high
enough to be noticed, but you can’t simply muscle your way to the top – higher
bids do not automatically mean higher placement. When figuring out whose ads
to display, Google considers your bid price and your quality score, so getting
Google to trust the quality and relevance of your ad is equally important.

3. Fine Tune

Once you’re able to raise your quality scores (with time and a good click-through-
rate), you can start managing and fine-tuning your bids. If you’re lucky, this can
mean lowering your bid price for certain keyword groups.

What are some signs that you can lower your bid?

Look at your Average CPC (cost-per-click) and check if your Max CPC is
significantly higher. If it is, and the keyword has a good quality score, you can
bring your bid down a bit. Bring it down to slightly above the Average CPC.

4. React and Adjust

Once you make a change, compare the resulting trends and adjust accordingly.
Make sure to document your average position, average CPC, and CTR (click-
through-rate) for the whole campaign so you can make sure your numbers are
still going in the right direction. If your ad drops (which makes your CTR drop),
then bring your bid back up to a competitive level quickly before you start
negatively affecting your quality score.