Adwords Bid Management Tips

If you’re on a tight budget it’s important that you use a Google Adwords bid management strategy that will maximize your profits.

If you’re profit margins are small you might be tempted to start with low bids on most of your keywords in order to spend as little money as possible. It’s important to realize that in such a situation the position of your ads (Adrank) would also be low on the search results pages.

This will result in your ads having a low click-through-rates (CTR’s) which will have a negative impact on your quality score (QS) which will cause an increase in click costs.

Keep in mind that your Adrank is a function of your bid price and your QS. If your bid prices are low and your QS is poor the position of your ads would be low.

On the other hand if you have a better CTR/CPC combination than that of your competitors you’ll get a higher Adrank.

So, it’s better to start bidding high to ensure a top 3 position which should result in higher click-through-rates. The ads in the top positions usually get more clicks and the higher CTR’s will help you to build a good account history.

Adwords Bid Management: Don’t Reduce Bids Too Quickly

Let’s assume that you start bidding R7.00 to get the number 1 position and because of that your click-through-rates are great and your average cost per click is going down.

However, although you’re getting conversions it’s not enough to break even yet. You notice that you’re first page bid estimates are down to R1.50 and you quickly adjust your bids to just meet the minimum bid requirements.

That could be a risky bid management strategy, especially if haven’t given the Adwords system enough time (impressions) to give your campaign the thumbs up.

A bidding strategy that would make more sense is to gradually reduce bid prices and monitor the impact on the position of your ads. As soon as you move out of the top position increase your bids slightly.

As you’re busy managing your bids, make sure to optimize your account for even higher CTR. What will happen over time is that Google will tend to push the position of a keyword up without increasing the bid price.

That is why it is so important to try and increase your CTR’s in order to get better ad positions than your competitors without paying more.