Every PPC campaign has a cost of running. And this is factual.
No matter how well you optimize your landing pages or ad sets, a cost will always be there. However, what that cost is and what returns you get against it, depend a great deal on the bids that you choose.
Set in a PPC auction to secure ad placements for your business, a PPC bid is the amount you pay for every click that your ad gets.
This simply means,
Your campaign’s cost x Number of clicks your ads got
Which is why you must smartly decide bids. But, there’s always this question of how?
Well, this chapter will help you with that. Here’s everything you need to know about deciding how much you need to bid for your campaigns to produce fruitful results.
Starting Off: Factors Affecting The Bid Amount
For starters, it would be good to have an idea about the factors that affect bid choices.
1. Average Monthly Revenue Per Customer
Considering the amount of money you make from a customer every month is important.
It’ll give you a clearer view about what you want to achieve through these campaigns. This way you can come up with a bid amount that seems reasonable, abiding to your expectations.
So, as you start off with deciding the right bid amount for your business’s niche-specific PPC campaigns, make sure you first know how much you make per customer every month.
2. Customer Retention and Tenure
Second thing that matters is how well your organization can retain customers and for how long it can keep them.
Studies show it costs 5% more to acquire a new customer than to retain an existing one.
Do you see how simple it is?
Customer retention is important and so is knowing how good your organization is at it. Just like the average revenue per customer every month, customer retention and tenure will make you aware of how much you can spend, considering your current retention rates and average customer tenure.
3. Customer Lifetime Revenue
Another important metric that you need to look up to before deciding your campaign’s bid is the average lifetime revenue per customer.
The profits that you make from a customer throughout their entire lifespan with you is a major factor affecting the bid. If the customer lifetime revenue doesn’t justify the bid amount, you are clearly bidding too much. So, stop there!
4. Close Rate
Even after you get a qualified lead, what are the odds that it’ll convert/close?
The close rate is a major factor affecting the amount that you set the bid for.
It’s because a thousand leads may not mean a thousand sales. And, ugh! Ugh! It’s sad when you realize, leads don’t get you money, sales do.
So, understand this. The number of leads you get out of a PPC campaign must matter, but you must never neglect a close rate as well.
General Bidding Mistakes That Most Marketers Make
Choosing the right bidding amount for your PPC campaigns is no different than walking a rope.
You make a small mistake, you fall. But, that can’t be afforded, right? For that reason, it’s important for you to go through some of the most common bidding mistakes that most PPC marketers make.
Bidding Too Low
The idea of bidding too low may seem appealing in imagination, but in reality, it can always backfire.
Spending a few more cents and getting results out of the way is better than pending a smaller amount of money, and getting nothing out of it.
Understand this, setting your bid rates too low will be of no benefit as your ads may not even be visible to your desired LMS buyers.
So, be wise. Follow the method below for finding out your optimal CPC bid value.
Not Trying And Keeping Up With The Innovations
One reason why something can go wrong with your PPC campaigns is lack of innovation.
The moment you become too comfortable and satisfied with your campaign and its results, you stop thriving.
This can seriously affect your PPC campaign.
Lack Of Strategy
One of the most common mistakes is jumping into the world of PPC ad campaigns with too much ambition and no strategy.
Many marketers fall prey to this one. And it’s not even a surprise. As marketers, we have all approached a number of ideas without the thoughts of “What if this doesn’t work?”
In a number of cases, this ideology has produced magnificent results. However, when we talk about PPC and bidding, we talk about money. Which is why it becomes more crucial than ever to be careful and move forward only with a strategy.
The basic idea is to create a Learning Management System buyer persona and identify its needs and interests. This will greatly help in targeting your PPC campaigns better and in coming up with better LMS buyer intent, saving you fine deals while bidding.
Some Bid Management Goals To Look Up To
Coming up with the right bid amount is a task in PPC marketing. However, once you get there, you're already halfway through.
And while this half consisted of formulating the PPC bids for different purposes, here's a list of bid management goals that you can look up to.
1. Improving Branding
One of the most conventional goals of any marketing campaign can be to increase branding.
With PPC you can optimally do that if you are able to acquire as many impressions as possible while staying under a target CPM.
2. Boosting Site Traffic
Another major marketing goal is to boost site traffic. This is no surprise that quality web traffic is essential but hard to gain.
With a niche-specific PPC platform, you can reward yourself with this distant goal.
The main aim should be to stay under a target CPC. That’s the way to optimize bid rates.
3. Increasing Leads
Leads are fuel to any business in the world, we know it.
Having said that, it’s no surprise that increasing lead generation/conversion rates while managing to keep your bids below a CPA target can certainly be one of your major PPC marketing goals.
4. Getting more Sales
As it goes without saying, getting more sales is definitely one of the major goals of any marketing campaign.
However, when we connect it with PPC bids, it becomes crucial to ensure that bids are priced smartly to create a positive ROI.
Keep this in mind, and consider the steps and factors mentioned in the sections above for coming up with the right CPC bid value for your campaign.
To optimally run a PPC campaign, it’s necessary to decide your bid amount.
Too much can cost you a lot of money and too little will keep you behind your competitors. The best that you can do is consider the right factors that matter and adapt the right techniques to come up with a PPC bid that actually gets your campaigns to the promised land.
This chapter was about the same. Hopefully, this helped you understand bids and how to know how much you should bid.