AdWords Bidding and How it Works

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( — May 10, 2017) — Part of any AdWords management campaign is the ability to bid on the keywords you want to use. Through bids, you can decide how much you want to pay every time a customer searches for that keyword and clicks on the ad. This is known as your keyword’s maximum CPC, or cost-per-click, amount. You have two options when it comes to placing your bids: You can either place them manually or you can allow AdWords to do the bidding for you. Here, we will discuss the two processes and how they are different, as well as how to choose a bid and how bid estimates can boost your ad to the first page of the search engine.

Manual CPC bidding

With this option, you can manage your CPC bids yourself. You set the bids for an entire ad group as a whole, or for each individual keyword separately. If you set a bid amount for an ad group, that bid amount will automatically be applied to all of the keywords within that campaign’s ad group. You ca change your bid amount whenever you choose to, for individual keywords or for all ads in a group at once.

Using AdWords to help you choose a keyword bid

There are several ways in which AdWords helps you to decide on a keyword bid, and make the necessary adjustments to your keyword bids.

Opportunities are those instances in your account that identify which keywords might be good candidates for changes in your bid. The system makes suggestions where bids should be increased (which would help to get more clicks) and where your bids should be decreased, to help keep your budget in check.

The Bid Simulator allows you to run hypothetical scenarios through the system so you can adjust your bids accordingly. For example, you can run a scenario to find out how much more impact (impressions) your bid would have if you raise it by a specified amount, so you can make any necessary adjustments to your budget based on those predictions.

Conversion tracking

This feature allows you to see which keywords most often lead customers to take a certain action. For example, which keywords in your niche usually lead people to make a purchase? Which ones lead them to sign up for a newsletter? This information can be very useful in selecting how to adjust your bid for those high-performing keywords that are getting you lots of conversions. Through this kind of tracking, you can up your budget for those keywords that are performing well and decrease it for the keywords whose performance is lagging.

Enhanced CPC

This AdWords feature search out ad auctions that are the most likely to result in sales for you, and raises your bid to put forth a more aggressive competition for those clicks. Conversely, when an auction doesn’t look like it’s going to pan out for you, your bid will be lowered accordingly.