Why Your PPC Bidding Needs to Evolve

Search marketing campaigns are evolving, ever-changing organisms. Performance can shift for any number of reasons, and new maneuvers are required to pivot successfully. Using a proactive approach that aligns bidding strategies with recent keyword performance is a good way to stay ahead of the curve. As with anything in your SEM campaigns, your bidding approach should evolve as well.

Utilize Ad Group Level Settings

One of the major changes in the way that AdWords operates is the ability to set bidding options at the ad group level. Before this change, you had to select CPC, CPM, or CPA at the campaign level, and this would apply to every ad group. Now, you can have ad groups running on a CPC model in the same campaign as another ad group running on a CPA model.

This adjustment to AdWord’s options signifies encouragement to develop your bidding strategy. You no longer need to move an ad group into a new campaign in order to transition from CPC to CPA bidding. Therefore, you can keep your campaign and ad group themes completely intact.

If you are utilizing varying bidding strategies within a single campaign, be sure to clearly mark each ad group. Also, make sure that your ad group naming convention displays which bid strategy is being utilized. For fast and easy sorting, analysis, and optimization, I highly suggest implementing a uniform label schematic. 

Launch New Keywords

In terms of bidding, let’s start at the beginning: new keywords. To gain traction with new keywords, you need to use cost-per-click bidding (CPC). As a specific term gains impression volume, you can adjust your CPC bid to either increase or decrease ad positioning based on performance.

Don’t launch new keywords with cost-per-acquisition (CPA) bidding, because the algorithm will not have enough historical performance to make bid adjustments. New keywords will struggle to capture impressions and could appear to garner low traffic, when really it’s just the algorithm misfiring due to lack of data.

If you want to give your new keywords a leg-up on generating impressions, then you can create a bid rule that automatically increases CPC bids on terms that are ranking below a certain ad position. For example, if a keyword has 100 impressions but an average position of three, you can increase the bid to get that specific term to the top of the SERP more regularly. 

Often, it seems like this is where a keyword’s bidding evolution stalls. CPC bids are constantly tweaked, but never really make any significant strides to generate greater scale and volume.

Segment Keywords That Have Potential

Once a keyword has proven that it has impression volume and can convert within your KPI parameters, then you need to keep it progressing to maturity. Here is where the algorithms come in.

Algorithms need data to optimize correctly. This is why you should only use CPA bidding in AdWords for terms that can feed the algorithm everything it needs to be successful. Don’t try to use CPA bidding on low-volume terms, because there will be a lack of data which will result in poor performance.

Folks often think that setting a CPA bid will solve all their problems and that “the machine” will just fix everything. This is not the case. Sometimes people think, “My CPA is $100 right now. Well, I’ll just turn on CPA bidding and set my bids to $50… Bam! Problem fixed!” More often than not, this approach will create another problem and tank your impression volume.

You need to be in that “sweet spot.” In other words, a specific keyword needs a steady impression volume that is already fairly close to your desired CPA KPI. Establish your initial CPA bids by setting bids to your current CPA, or even slightly higher. This will help bridge the gap between bidding strategies and minimize impression loss. Once you have a good sense of the bidding algorithm, you can start adjusting to increase volume or improve ROI.

Promote Proven Keywords

You’ll probably find that certain keywords are your “bread and butter”: these are the terms that generate awesome results on a consistent basis. I call these keywords the “golden corral,” while others refer to them as “head terms.” Whatever you call them, they need to be given special attention. You may even want to develop bidding progression strategies for each individual keyword.

Your golden corral keywords may remain on CPA bidding, if that works for you. However, I’ve found pushing these keywords even more aggressively also works very well. If these terms convert at an acceptable rate with a positive ROI, then you should push them to the top of the SERP in order to gain as many impression shares as possible.

The next step in a keyword’s evolution can be a flexible bid strategy such as Page Placement, which focuses on position one or two. Another flexible bid strategy is Competitor Out-Rank, which automatically out-bids specific competitors.

A Word of Caution:
Flexible bid strategies are pretty aggressive. Be sure to watch them closely.

To achieve the same effect but with a bit more control, you can always create bid rules with similar parameters to these flexible bid strategies. These rules let you include limitations regarding CPA, CPC, CTR, or any other metrics that indicate success for you.

If on a third-party platform, utilize the bidding algorithms contained within each platform to achieve some of the same effects. One benefit of a third-party platform format is that it allows you to use the same rule across engines without being contained in the AdWords ecosystem.

Summary

Head-term bidding progression could look something like this:

  1. CPC Bidding: Get started by establishing some historical performance to see which terms rise to top. These are the candidates for bidding progression.
  2. CPA Bidding: This applies to terms that have proven their salt and you want to push their performance to possibly increase impressions. Just remember CPA bidding has the potential to lower impressions, and that this is contingent upon whatever happens with the keywords. 
  3. Flexible Bidding: These are your top performers. You want to gain as much impression volume as possible. Go ahead and push these terms to see how many clicks they can gain, while maintaining their positive performance.

As you can see here, bidding strategy should not be stagnant – it should change as a keyword matures. You may find that for certain keywords or CPC bidding always works best, and that is fine. But, consider testing these alternatives, especially for your golden corral and head-term keywords.

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