Profitable Bidding Strategies Or Max CPC For Keyword In PPC (AdWords & Bing Ads).

Rajat Kumar (Tech Head)   |   Last Updated: June 05, 2018   |  
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    Profitable-bidding-strategies-or-max-CPC-for-keyword-in-PPC-(AdWords-&-Bing-Ads).

    Background:

    Profitable bidding strategies or max CPC of keyword is very important factor in terms of profit margin of any product and service. Although we can find some of the best methods to get profitable bidding value based on conversion cost of per click, avg. conversion value and conversion rate. By using conversion value you actually know what your ROI & ROAS is. So this is the right way to set your bid for you ads in digital marketing.

    If you don’t know concept of ROI, ROAS & Conversion value, then before go further, you can read this article about concept of ROI, ROAS & Conversion value. Because to finding profitable bidding strategies you need to have some basic knowledge of Profit Margin, Return on investment (ROI), Return on ads spend (ROAS) & Conversion value.

    Without wasting any time lets jump into main requirements & needs of profitable bidding strategies.

     

    Requirements:

    To finding maximum cost per click or profitable bidding you need to know your ROAS & revenue per click (avg. conversion value) & conversion rate. We need to know all the things because we want to get more click within your bidding cost.

    Before go further you have to enable or put you conversion code to your website, then enable your conversion value per click column in you PPC account campaign for Google AdWords / Bing Ads.

     

    Conversion cost / Click == Revenue / Click

     

    Formula Calculation Factors:

    Average conversion value – are calculated by simply total conversion cost divided by total number of conversion we got for adgroup, ads & keyword.

    Conversion rates - are calculated by simply taking the number of conversions and dividing that by the number of total ad clicks that can be tracked to a conversion during the same time period.

     

    For example, if you had 100 conversions from 1,000 clicks, your conversion rate would be 10%, since 100 ÷ 1,000 = 10%.

     

    ROAS – are is simply measure by total revenue divided by cost of Ads spend (we already discussed this topic in deep in previous article).

     

     

    First formula based on conversion value & conversion rate:

    Maximum CPC formula:

    Max cost per click (max CPC) = (Avg. Conversion Value / Desired ROAS) X Conversion Rate

    Note: You can use this technique to account level, campaign level, adgroup level, ads level, & keywords level to find profitable bidding strategies.

     

    Let’s assume:

    We have to find keyword level bidding strategies with keyword [Web Development Company] then for this keyword we got

    Avg. conversion value = Rs. 2,000

    Conversion Rate = 10%

    Desired ROAS = 200%

    (Desired ROAS - Means you want to double you profit by spending each Rs.100 the return should be Rs. 200). This all data based on your historic data for conversion tracking code for signup, sales, service, leads & visitor.

     

    Put all the value into max CPC formula:

    (2000 / 200) x 10 = 100

    Max CPC should be Rs. 100 for keyword [Web Development Company]

     

     

    Second formula based on revenue per click:

    Maximum CPC formula:

    Max CPC = Revenue per click / Desired per click

     

    Let’s assume:

    We have to find keyword level bidding strategies with keyword [Web Design Company] then for this keyword we got

    Conversion or Revenue per click = Rs.1,000

    Desired ROAS = 300%

     

    Put all the value into max CPC formula:

    (1000 / 300) = 3.33

    Max CPC should be Rs. 3.33 for keyword [Web Design Company]

     

    Conclusion:

    In above two formula of profitable bidding strategies or Max CPC formula are very important in terms of conversion, so In order to increase you conversion you have to work on your website content to engage your customer to page for making web page less latency of page load time, make your page more relevant for users to convert users into customers. In this article we discussed about both the Max CPC formulas that are very clear In terms of you ROAS & Conversion that you received.

    If you want to get our Digital Marketing services you can choose one of these plan mantion in following service link Digital Marketing / PPC Plans.

     


    If you find this article worth to you please hit kudos, comment, & share to your friends and family to make worth to us being writing technical articles. Thanks very much see you in next session.


     


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