AdWords Bidding: Learn What should be the Max CPC for your keyword?

Google AdWords bidding cannot be static; therefore, a single bid amount is not accurate for everyone. Several factors can help you set an optimal bid for your campaign keywords. In this article, we would like to share the most common factors we use at Markovate to set the bids for our customer accounts.

1. Value per lead – It is important to find a balance between cost per click (CPC) and cost per conversion to optimize your campaigns. If your max CPC is lower than your competitors’ set max CPC bid, then you would get a lower Ad Rank on Google and a high cost per conversion overall. To set a max CPC on your keywords, calculate the value of an online lead to find the break-even cost (advertising cost = sales) for your product or service. Let’s say you make $10 per product, and out of every 10 visits to your website, 1 customer buys your product. To make a profit on each item sold, you need to set your bid below $1.

2. Monthly Budget – Use a monthly budget to determine your max CPC. Divide the total daily budget by the number of expected clicks you need per day to meet your conversion goal. This will give you the max CPC bid for your keywords. However, if your max CPC is too low and below first-page bids, then you might lose potential clicks.

3. Google Suggested Keywords’ Bids – You can also start your campaign by keeping your bid as low as a dollar. Once you run the campaign, Google will automatically recommend Top of the page and First-page bids. Even though it is not mandatory to match these bid amounts, they are good benchmarks to consider while setting keywords bids.

4. Business Goal – If your business goal is to show the ads, at the top 2 ranks, then your bidding strategies must be very aggressive. The keyword bids should match the top of page bids and must be optimized regularly. Make sure the overall click-through rate of the keywords is higher than your competitors’ ad copy to get a better ad rank; otherwise, you will pay more per click for a lower ad position.

5. Location or Device – It is a good strategy to set different bids for your campaign locations and devices. You can maximize the opportunity to get more clicks by setting max CPC differently for a high versus a low performing location/device.

Avoid using Google Bid Optimizer on new campaign setups. Automated bid management tools or strategies are best used on an existing and active AdWords account, with at least 30 days of historical data.

We hope this article will help you decide how to set the max CPC for your keywords. If you want to know more about increasing conversions, please contact us.