To get the best results from your AdWords campaigns, it's important to know how to bid strategically. Strategic bidding first involves identifying how much your keywords cost in comparison to how much revenue they bring in. Once you've done this, you can start adjusting your bids to maximize your return on investment.
Watch this short video to learn why ROI is important to your AdWords account:
Video: Introduction to ROI
| Track your conversions |
To help gauge the value of your keywords, we suggest setting up conversion tracking. Conversion tracking is a free tool that will tell you how many clicks on your ads turned into conversions on your website.
Because online traffic can fluctuate significantly day-to-day, we recommend that you wait one to two weeks after enabling conversion tracking to analyze your statistics.
| Evaluate your advertising profits |
Once you've collected sufficient data, you'll be able to identify how profitable your keywords are with their current cost-per-click (CPC) bids. You can then adjust their maximum CPCs accordingly.
If a keyword has a high conversion rate and a low average CPC, for example, you may try increasing its maximum CPC. This could improve the keyword's position, giving your ads more exposure and potentially increasing your ROI.
Similarly, if a keyword has a low conversion rate and a high average CPC, you may try reducing its maximum CPC. A lower maximum CPC is likely to decrease the keyword's average position, the number of impressions and clicks it receives, and as a result, the cost it incurs. Not only can this strategy improve your ROI on low-performing keywords, but it frees up part of your budget to invest in more valuable keywords.
| Experiment to see what works |
We recommend adjusting CPC amounts in small increments. Allow your keywords to accrue conversion statistics with your new maximum CPC amounts before adjusting again. Also, remember that internet traffic is continuously changing. It's important to re-evaluate your CPC bids regularly.
