PPC bidding rules: a simple example strategy

If you’re managing a small PPC account you may think you’re not using rules to govern how you manage your bids, when actually you use rules every time you change bids. If your keywords are performing well you might raise the bids, if they have a low CTR you may want to investigate the search queries behind them, and if they’ve spent a fair bit of money and not converted you might pause them. Whether they’re automated or not, or you’re aware of them or not, they’re still the rules you’re using to optimise your bids.

a consistent approach

When not consciously using rules, chances are you use variations of the same rules every time, but it’s important to have consistency throughout your bid management strategy. This makes it easier to measure the impact of the work you’re doing and to improve it. If your strategy isn’t working and needs to be changed, then you need to know exactly what it is that you’re doing so you’ll be able to quickly hypothesise what needs fixing.

A clear thought out strategy is also much easier to develop and add extra layers to. You might start off optimising based on your overall ROI target, but then decide to refine it further by optimising each product line based on their individual margins. Maybe you set a spend threshold across all your adgroups and when reached, if not converted you’ll pause the adgroup. After a while, you may realise that this needs refined and set different spend thresholds based on the average order values of each of your adgroups.

Whatever the case, the only way to really progress is to record your steps and steadily build upon what you’ve learned.

example bid management strategy

So where to start? Simple is always better – you’ll get to the sophisticated models in time once you know what you need. Think about what you’re actually doing already when you’re optimising your bids, and analyse it for flaws or loopholes. What’s the absolute, always true rules that you could apply? What disasters could happen to these rules? Can you put measures in place to make you aware of problem areas before they turn into disasters?

Here’s an example of a starting block of rules, with the premise of the strategy being:

  • All good keywords in good positions
  • Otherwise find the most cost efficient position
  • Let me know if it still isn’t working

Notice that for every action there’s a rule that performs the opposite. This is important because otherwise you may find your bids being pushed too far. If your rule raises the bids of your best performing keywords each month, then every time they have a good month their bids will be raised, and then stay at this level during the bad months. Ensuring there’s a counter-rule may mean some bids constantly fluctuate, but at least they’ll never be extreme.

Also there’s nothing too drastic in the strategy above – the worst that’s going to happen is you’ll be notified when things aren’t working, and no doubt be able to add an extra layer to the rules to help filter these notifications. Maybe there should be an impression threshold too? Maybe these under-performing keywords should be caught earlier before they spend too much, by notifying you of low click through rates?

automated rules

Once you’re confident that your base rules are robust enough to run on their own then why not automate them? This will free up your time to start testing your next layer of rules and start refining them. In other words, once you’ve automated how you optimise, you can then start optimising how you optimise!

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2 thoughts on “PPC bidding rules: a simple example strategy”

  1. Melinda says:

    Hi Steve,

    Great article, one question can you please define what you mean by On Target, Off Target, Below Threshold and Above threshold? What specific metrics are you referring to if I was optimizing towards a Cost Per Lead goal as opposed to a sales or ROI target?

    Thanks in advance

    • Thanks Mel. For lead-gen sites on and off target refers to how close your actual Cost Per Action is to your target Cost Per Action. So in the first rule, if I’m happy to pay up to £25 for each lead, and the campaign is converting at a cost of £20 for each lead then it’s on target (actually better than), so I’d raise the bids if it’s in a bad position. In the second example where the campaign hasn’t converted yet, it might be OK if the campaign has only spent £15 so far and so hasn’t yet reached the threshold where I’d consider the campaign to be failing. In the last example, maybe my campaign has spent £40 and still not converted, so I’d say this is above the threshold of determining if it’s working, and I’d take the actions of either lowering the bids or pausing it. You’ll have to decide where your threshold is depending on how much risk you’re willing to take. If your target CPA is £25, you may take action if a campaign spends £26 and hasn’t converted, or you may give it the benefit of the doubt and wait until it’s spent £50 without converting. Hope this helps!

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