CPA Keyword Bid Management

November 7, 2008

Bid management is where lots of your ppc campaign optimization is done. With proper ROI driven bid management techniques you will be able to create a profitable ppc campaign in Google Adwords within no time! The secret is tweaking your bids according to your conversion rates and CPA in order to maintain the highest possible bid & position in the Google results. this is what you must do...

In order to start bidding correctly your Google Adwords PPC campaign must accumulate a minimal amount of statistical data, only then you can start to optimize the bids mathematically.

Once you accumulate this min statistical data you must understand & calculate the following factors:

  1. CPA/CPL - Stands for Cost Per Acquisition/Lead - You must understand the value of every conversion/sale/lead you accomplish.
  2. You must track every conversion/sale/lead with Google Adwords conversion tracking or Google Analytics goals.
  3. Conversion % - is the percentage of conversions divided by the number of clicks. Since conversions at tracked per keyword every keyword has its own conversion rate.
Once you know your CPA, set up conversion tracking & accumulated the min statistical data to get solid conversion rates your ready to bid properly using the PPC bid formula:

CPA X Conv % = Max CPC

Since the average CPC is usually 10% lower than the max CPC bid you set this formula is bound to profit you 110% return on advertising spend. Let us know if it worked!

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