Stop Wasting Your Ad Budget! The Secrets of PPC Bid Management Exposed

To err is human, but some mistakes can be costly, especially in pay-per-click (PPC) bid management. Since its inception in 2000, Google Ads has undergone drastic changes, making PPC a complex and dynamic field that demands a strategic approach.

Many PPC agencies struggle to adapt to the new changes and end up wasting valuable budgets. While securing the top spot in ad placement remains the primary goal, it’s crucial to adopt a smart and balanced PPC bid management approach to maximize return on investment (ROI). 

In this article, we’ll walk you through the ins and outs of PPC bid management, including Google Ads strategies, advanced bidding techniques, bid management tools and platforms, and common mistakes to avoid. By understanding these elements, you can steer your clients’ PPC campaigns towards success. Let’s get started!

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What is PPC Bid Management?

Online businesses participate in PPC auctions to secure a top spot in search engine result pages for relevant keywords. In these actions, typically, the highest bidder wins. Your bids affect how much you will pay for each click and your ads’ visibility.

However, spending more money on specific keywords for a top position does not necessarily guarantee more conversions. A balanced approach is the key to driving better results. The strategic process of adjusting bids based on ad spend and campaign goals is known as PPC bid management. 

You may wonder how search engines determine ad rank, which dictates whether your client’s ad appears first, second, or third. Google uses a set of values to calculate ad rank that includes competition, ad quality, and the context of a user’s search.

To ensure the quality of ads, Google imposes a minimum ad rank threshold that the ad must meet to appear on the above or below search results. Moreover, the ad rank influences the cost-per-click (CPC) you pay. With a higher ad rank, you outperform your competitors and earn the top slot at a lower cost. 

The advertisers can also adjust their bidding strategies based on the cost-per-acquisition (CPA) goals. In this approach, the advertisers set a specific budget to acquire each customer, conversion, or any action taken by the user on their website. 

Should Advertisers Have a Strategic Bidding Approach Rather Than Just Bidding High?

Yes. Advertisers need to have a well-thought-out strategic bidding approach that maximizes the likelihood of conversion while using funds efficiently.

You should tailor your client’s bids based on various factors, such as demographics, device type, location, and time of day. This precision ensures that their ad reaches the right audience, leading to higher engagement and conversion rates. 

With a strategic bidding approach, you can allocate the budget more effectively across different campaigns, ad groups, or keywords. By prioritizing high-priority areas with more funding and reducing budgets for lower-priority ones, advertisers can optimize their spending.

High bidding wins immediate ad placement, but it can lead to wasted resources if not managed carefully. So, the focus should not solely be on winning the top spot but rather on implementing optimal PPC bid management strategies. 

Pro Tip: If you’re running a PPC agency that handles multiple clients, having a sophisticated PPC management tool will save you time and money. Try MatchCraft’s PPC Campaign Management Solutions to amplify your client’s ROI. 

Key Factors in PPC Bid Management 

Here are some important things to note that will help you master effective PPC bid management and stretch your dollar further. 

Quality Score and Its Impact on Ad Rank and Costs

The quality score gives you a sense of how your client’s ad performs relative to their competitors. More importantly, a higher quality score lowers CPC while getting the top position in ad placement within budget. Plus, the quality score serves as a valuable metric for enhancing a landing page’s experience, keyword relevance, and ad quality. 

Keyword Relevance and Search Intent 

Uncovering the most relevant keywords with strong search intent enables you to precisely target the audience, optimize your client’s PPC budget, and achieve better results by reducing irrelevant clicks that are less likely to convert.

The keyword search intent typically falls under these four categories:

1. Informational: Users seeking information or answers. 
2. Navigational: Users searching for a specific website or company.
3. Commercial: Researching products or services. 
4. Transactional: Looking to make a purchase.

So, you should focus on terms people normally search that are relevant to your client’s business and optimize your PPC bidding management strategy accordingly. 

Competitor Landscape and Bid Landscape 

While developing PPC bid management strategies, you will gain valuable insights by understanding what your client’s competitors are up to

Remember, pay-per-click advertising is a race to the top, and you must be well prepared to change your strategies in the ever-evolving bid landscape. Analyzing what you’re up against will give you an idea of the industry trends, keywords that are growing in popularity, and changes in the competition level. 

Pro Tip: If you’re wondering how to do a competitor landscape analysis for a small business with a limited budget, we have a white-label PPC software that can do the job for you in seconds. Check out Vendasta’s PPC and digital advertising solutions.

Conversion Rates and Values

The average conversion rate for Google search ads ranges from 3.1% to 6%. However, the conversion rate may differ across industries. The following are the factors that influence conversion rates:

• Target audience 
• Target location
• Keyword bids
• Negative keyword list
• Relevance 
• Clarity 

Profit Margins and Max CPA Targets

Understanding profit margins and setting maximum CPA targets are crucial to achieving success in your client’s advertising efforts. 

So, how do you calculate the ROI of your PPC campaigns? Here is the formula:

ROI (%) = ((Total Ad Revenue – Total Ad Costs) / Total Ad Costs) x 100

For example, if your total ad revenue is $500 and the total ad cost is $100, your ROI will be 400%. It would look something like this:

400% = (($500 – $100) / $100) x 100

The max CPA target is the highest amount your client is willing to pay to acquire a customer. To stay within your CPA targets, you should consider employing product search tools that can help measure the effectiveness of your PPC campaigns. 

Google Ads Bidding Strategies

When it comes to PPC bid management strategies, there is no one-size-fits-all approach. Advertisers must pick specific strategies that align closely with their campaign goals. Google Ads offers a range of bidding strategies tailored to different campaign types and targeting methods. Let’s explore each strategy in detail. 

Target Cost Per Action (CPA)

This automated bidding strategy focuses on increasing conversions from your ad while maintaining the average CPA you set. Google’s machine learning algorithm adjusts bids to achieve conversions at or below the target CPA.

This bidding strategy saves you time and is an ideal option for generating leads and products with similar pricing, but it may not be the best strategy for e-commerce businesses with diverse products. 

Target Return on Ad Spend (ROAS)

This smart bidding strategy aims at getting the maximum return from your ad spend. Using AI, Google analyzes and predicts the conversion value of your ad or products you want to sell. Based on these inputs, the bids are automatically adjusted to get the maximum return.

Although this is a great bidding strategy, you have to be realistic about the number you set as Target ROAS. Go for it if you need to hit a specific ROI. 

Maximize Conversions Bidding 

It’s a simple bidding strategy that allows you to set the budget, and Google’s AI will take care of the rest to deliver maximum conversions based on real-time data, historical information, and contextual signals.

This bidding strategy is straightforward, as it will try to spend your daily budget fully, but it may not be suitable if you’re currently spending much less than your average budget. 

Maximize Conversion Value Bidding

In this bidding strategy, you can define the value, such as profit margin or sales revenue, and Google’s machine learning adjusts bids and delivers maximum return on ad spend. Although it works much like ROAS, this bidding option will fully utilize your daily average budget. 

Enhanced Cost Per Click (ECPC) Bidding

Enhanced cost-per-click bidding partially adjusts your manual bids so that the campaign is optimized to maximize conversions. For optimal results, Google recommends setting up conversion tracking that tracks clicks and conversions and compares them to past results. 

Maximize Clicks Bidding 

This bidding strategy aims to generate maximum clicks within your client’s budget regardless of traffic relevance. This is an ideal option for increasing brand awareness and driving more traffic to your client’s site. 

Manual Bidding Techniques

While automated bidding strategies are gaining popularity for its ease of use and convenience, they entail relinquishing bid control to Google.

Manual bidding still remains the default setting in Google Ads, and it allows you to set bids and change at any point in time. However, this method demands experience, insights, and manual keyword bid management.

Let’s look into some of the ideal manual bidding techniques that will help maximize conversions. 

Calculating Ideal Bids Based on Targets

Target CPA: You will need to manually set the maximum amount your client is willing to pay per acquisition. The following formula helps you calculate the current CPA.

Current CPA = Total Ad Spend / Total Conversions

Target ROAS: This allows you to set the minimum return your client desires from each dollar spent on ads. Use the following formula to calculate their current ROAS. 

Current ROAS = Total Revenue / Total Ad Spend

Bid Adjustments

Adjusting bids based on devices, locations, and ad schedules allows for more precise optimization of PPC campaigns. 

• Device-Based Bid Adjustments: Campaign performance varies significantly in different devices such as mobile, tablet, and desktop. Identifying device trends and adjusting bids based on devices can help optimize ROI. 
• Location-Based Bid Adjustments: Analyze your campaign performance based on geographical data and find out which locations generate the best and worst results. Consider asking your client to increase bids for high-performing areas and lowering bids for locations with weak performance. 
• Ad Schedule-Based Bid Adjustments: Ad performance varies based on the time of the day or day of the week. Adjust the bids based on this data to get better results. For example, if ads perform exceptionally well during evenings from 5 PM to 10 PM, you might want to adjust bids higher for this specific time slot to capitalize on peak traffic and improve campaign results. 

Bid Testing and Incremental Bidding 

Bid testing and incremental bidding are essential techniques used in manual bidding that empowers advertisers to adjust bid levels based on performance and test results. You can create several ad groups and analyze the performance for multiple metrics such as CPA, ROAS, CTR, and overall spend. From there, adjust the bid levels based on the test results. 

Similarly, incremental bidding involves gradual adjustments to bid amounts over time until reaching an optimal level. To do this effectively, ensure you have sufficient data because small sets of data can lead to unreliable conclusions. The following scenario will help you understand how incremental bidding works:

Scenario: Your client’s current CPC for a keyword is $1.00, and you are aiming to improve ROAS.

• Week 1: Increase CPC by 5% to $1.05.
• Week 2: Increase CPC by another 5% to $1.10 (if performance improves).
• Week 3: Decrease CPC by 5% to $1.05 (if performance drops).

While doing incremental bidding, you should also consider seasonal trends, competitor actions, and market changes that can influence the performance. 

Leveraging Automated Rules and Scripts 

Google Ads allows you to set predefined rules in PPC campaigns that automatically trigger specific actions. These rules help you eliminate guesswork and manage your clients’ campaigns efficiently. Using automated rules, you can adjust bids, schedule ads, manage budgets, monitor performance, and more. 

Google Ad Scripts are much more advanced than automated rules, providing you with greater flexibility and customization. All you have to do is to run the JavaScript code in your PPC account and automate tasks, generate reports, and make bulk changes. Here is what you can accomplish by leveraging Ad Scripts:

• Modify bids based on performance in different geographic locations.
• Send email alerts with detailed performance reports. 
• Manage keywords by regularly adding negative keywords to prevent budget wastage. 
• Test different ad copies and pause less effective ones. 
• Automatically allocate more budget to high-performing campaigns and ad groups. 

Bid Management Tools and Platforms

The PPC advertising landscape is highly competitive, and brands must leverage PPC bid management tools and platforms to snatch the coveted ad placement position and maximize conversions.

Here’s a bit of what MatchCraft has to offer:

• Streamlined Campaign Management: Consolidates your clients’ campaign insights into a single, unified view, enabling your agency to monitor performance and make data-driven decisions efficiently.
• Intelligent Budget Optimization: Automated bid and budget management system that automatically raises and lowers bids to consistently deliver optimized CPCs, evenly paced campaigns, and an improved cost per lead.
• Seamless Scalability: Designed to support your agency’s expansion, providing the flexibility and reliability you need as you scale.

With automation tools like MatchCraft, your agency can seamlessly manage multiple campaigns under one roof. But how do you pick the best tool for your agency?

Here are some tips:

1. Evaluate your clients’ PPC goals to select a tool that aligns with their needs.
2. Choose a solution that fits your budget.
3. Assess your clients’ industry and competitive landscape.
4. Consider the level of automation and control you want.
5. Measure the success of your tool, assess, and reiterate if needed.

Pros and Cons Of Using Bid Management Tools 

Pros: 

• Most tools come integrated with AI-powered features. 
• Robust performance reporting.
• Automated budget management.
• Advanced bid optimization techniques to generate a better ROI. 
• Customizable dashboard.

Cons:

• It can be expensive, especially for small businesses.
• Some tools may not include all PPC platforms. 
• It can be complex for beginners. 

Tips for Effective Tool Implementation and Use

With hundreds of PPC bid management tools available in the market, it’s crucial to find the one that best fits your needs. Before picking a PPC tool, assess your needs and identify what features are more important for your clients’ campaigns.

To use the tool effectively, set your PPC campaign goals clearly to achieve better results. Try to train your team thoroughly on how to use the tool, and if possible, take advantage of the training and resources provided by the tool provider. Lastly, keep up with the updates and new features of the tools to improve your campaigns. 

Pro Tip: If you want to evaluate your PPC agency performance and explore how advanced PPC tools can help scale your advertising business, MatchCraft has got you covered. Contact us to schedule a demo today! 

Monitoring and Optimization

Adequate campaign monitoring and bid optimization enable organizations to maximize their ROI. Here are the key metrics for monitoring bid performance and optimizing campaigns for success. 

• Click Through Rate (CTR): A high CTR indicates your ad is relevant and engaging. Monitor this to ensure your ad is attracting the right audience. 
• Cost Per Click (CPC): The amount you pay for each click. Monitoring this helps understand the competitiveness of your keywords. 
• Cost Per Acquisition (CPA): It helps you understand the effectiveness of your campaign. Lowering CPA and improving conversion is the primary objective of every PPC campaign.
• Quality Score: Reflects the quality and relevance of your ad, keywords, and landing pages. Monitoring this helps in earning the top position in search engine results. 
• Return on Ad Spend (ROAS): Helps you assess the overall profitability of your campaigns. 
• Clicks: The number of times your ad is clicked. This metric helps you understand the engagement level of your ads. 
• Impressions: This indicates the number of times your ad is shown. 
• Ad Spend: The total amount of money spent on your campaign. 
• Bounce Rate: The number of visitors who leave your client’s site after visiting once. This metric helps you improve the landing page experience. 

A detailed analysis of these key metrics helps in optimizing your PPC campaigns by taking necessary actions. 

A/B Testing and Experimenting with New Strategies 

A/B testing is a popular process that allows you to compare different variables of an element and choose the one that works best. This test is usually long, as you need a significant amount of time to collect sufficient data for reliable results.

You can conduct the A/B testing for the following variables in PPC campaigns:

• Ad copy
• Keywords
• Landing pages
• Ad extensions
• Bidding strategies

PPC is an evolving landscape, and experimenting with different strategies can yield desirable results.

For instance, you can identify and test long-tail keywords that might capture more specific queries, implement remarketing campaigns that reach out to audiences who have already visited your site, experiment with running ads during specific days and times of the day when your audience will be more active, and adjust bids based on device performance.  

Aligning Bids with Changing Business Goals and Market Conditions

Every business goes through some type of transformation over a period of time. The changes may occur due to market conditions, technology, cultural shifts, or trends. In the evolving business landscape, it’s important to refine your marketing efforts for sustainable growth. Identify your client’s business goals and keep your PPC bid management strategies flexible to increase profitability for you and your clients. 

You can align bids with the following business goals:

• Revenue growth
• Profitability 
• Lead generation
• Market penetration
• Brand awareness

Tip: As a PPC agency dealing with many clients, keeping track of diverse business goals and refining bidding strategies can be daunting. That’s why you need PPC campaign management services to do the heavy lifting so you can focus on acquiring more clients. 

Advanced PPC Bid Management Tactics

Advanced bid management tactics always come in handy to optimize bids more precisely and dynamically in response to various factors.

Let’s dive into some smart techniques you can adopt. 

Portfolio Bid Strategies for Multiple Campaigns

Portfolio bidding strategies, previously known as “flexible bid strategies,” are automated bid management approaches that can be applied across multiple campaigns, ad groups, and keywords collectively.

Here’s how you can set up a portfolio bidding strategy:

1. Go to ‘Shared Library’ in your Google Ads account and select ‘Bid Strategies.’
2. Click on ‘Create portfolio bid strategy’ and choose the desired strategy type.
3. Configure the settings, including target CPA, target ROAS, budget, and other relevant parameters.

Bid Scheduling and Auction Insights

Bid scheduling is a frequently used feature in PPC advertising that allows advertisers to adjust bids based on the time of day or day of the week. Using this strategy, you can increase the bids during peak times when your target audiences are likely to convert and decrease bids during off-peak hours to save your budget. 

Auction insights in Google Ads is another remarkable feature that lets you measure your campaign performance against your competitors. You can check performance across different parameters, such as keywords, ad groups, and campaigns.

Auction insights give you the following six metrics:

1. Impression shares – It’s the total number of impressions obtained divided by the number of estimated impressions you’re eligible to get. 
2. Overlap rate – How often your ad and the competitor’s ad receive the same impression share.  
3. Outranking share – How often your ad has won over a competitor’s ad.
4. Positions above rate (Search campaigns only) – Indicates how often a competitor’s ad was shown above yours. 
5. Top of page rate (Search campaigns only) – Tells you how often your ad or a competitor’s ad was shown above unpaid search results. 
6. Absolute top-of-the-page rate (Search campaigns only) – Indicates how many times your ad appears in the first position above the search result. 

These crucial insights help you adjust your bidding strategy and budgeting decisions.

Bid Layering and Micro-Bidding

Although Google’s smart bidding process is one of the most sophisticated automation use cases, it isn’t foolproof. When the ad performance goes unmonitored, it can lead to budget depletion. That’s when bid layering comes to your rescue.

PPC automation bid layering involves implementing a third-party platform to act as a failsafe when something goes wrong. If your ad campaign goes off the track, it can pause the process and alert you to the issue. With automation layering, you can set rules and limits to automatically pause ad groups, ads, or campaigns when the budget reaches a certain threshold. 

Micro-bidding allows you to make precise bid adjustments at a granular level across various dimensions. You can do micro-bidding for individual keywords, ad placements, devices, times of day, geographic locations, and more. Using this technique, you can gain meticulous control over your bidding strategy, aligning bids closely with specific business goals and key performance indicators (KPIs).

Adding Audience Signals

Incorporating audience signals in PPC advertising enhances targeting precision and boosts the relevance of ads, leading to improved campaign performance. Audience signals enable advertisers to tailor their bids and ad content to specific audience segments.

These signals can include:

• Demographics: Age, gender, income level, education, and more. 
• Geography: Location data such as country, region, city, and even neighborhood.
• Behavior: Past interactions with your website or ads, purchase history, time spent on site, and more.
• Interests: User interests based on browsing history, social media activity, and other online behaviors.
• Device: Information about the devices users are using, such as desktop, mobile, or tablet.
• Time: Time of day, day of the week, seasonality, and other temporal factors.
• Engagement: Levels of engagement with previous ads, such as clicks, conversions, and page visits.

Common Pitfalls and Mistakes

PPC advertising offers significant benefits in driving traffic and conversions, yet it also comes with potential pitfalls that can undermine its effectiveness if not managed carefully. Here are the most common mistakes advertisers make with PPC bid management. 

• Bidding too high or low: Bidding too high for keywords may get your client to the top spot in search ads but can exhaust your budget without adequate conversions. Conversely, underbidding is also a poor practice that can diminish your ad visibility and lower CTR. To avoid this mistake, you can adjust bids and allocate the budget more efficiently to get a high ROI at a low cost. 
• Not aligning bids with goals: It’s a common mistake in PPC that can lead to suboptimal performance, wasted budget, and missed opportunities. Ensure your bidding strategy aligns closely with specific campaign goals, whether it’s lead generation, brand awareness, sales, or customer engagement.
• Ignoring quality score: Quality score is a numerical number that tells you the quality and relevance of your ad, and it’s important to lower your CPC and CPA. Ignoring this score can cost your client more money. 
• Failing to test and optimize: Testing and optimization are essential for refining campaign performance. Failure to implement testing can lead to poor ad performance and budget wastage. Some of the common pitfalls in testing and optimization are having insufficient data, ignoring negative results, and lack of follow-up. Conduct A/B tests on ad variations, keywords, and targeting parameters to identify what resonates best with your intended audience. 
• Not monitoring performance regularly: Regular performance monitoring is critical to identifying issues promptly and optimizing campaigns effectively. Monitor metrics like CTR, conversion rate, CPC, and Quality Score regularly to detect trends, address anomalies, and make data-driven adjustments for improved campaign performance.

Do you want to avoid all these potential pitfalls and maximize ROI and conversions? Boost efficiency, deliver better results, and build strong client relationships with MatchCraft’s innovative advertising solutions. Schedule a demo today!

Author: Maria Selvam Amalraj