Every time a user performs a search in Google a process called an auction takes place to determine what ads will show and where they will appear in the search results. Google calculates an Ad Rank for all ads in the auction and those with the highest rank will generally be positioned highest among ads shown. Ad Rank is determined by six variables: bid amount, quality of the ad, ad rank thresholds, competition from other ads, context of the user’s search, and expected impact from ad extensions & other ad formats. In this series we will focus on the first variable and take a look at different bidding strategies.
Manual CPC bidding is a strategy in which the advertiser sets a maximum cost per click (CPC) for their ads. The advertiser only pays when a viewer is interested enough to click the ad. Often the actual CPC is less than the max that was set. The actual CPC is determined by a couple of factors; the Ad Rank threshold sets a minimum for all ads in the auction and the position of the ad in relation to competitor’s ads finalizes the cost. Deciding what maximum amount to set for your bids depends on your business. It is important to take into consideration aspects such as how much the product or service you provide costs or how often you have repeat customers. There are multiple options for applying maximum CPC bids to work for you. For Search Network bids you can assign different maximums to different keywords. If you expect certain keywords to perform better than others you can allocate more ad spend behind them. For Display Network bids you can set maximums for placements, topics, or other targeting methods. Using bid adjustments can help you target a specific audience. You can set your max to decrease or increase when searches are performed on mobile devices or in specific locations. This strategy is more hands on than Google’s automated bidding feature, it is recommended that you evaluate your bids regularly.
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