If you aren’t using an auto­mated bidding tech­nol­ogy or Google’s bidding strate­gies and like to have full control of your bidding, how do you manage bidding in bulk to drive effi­cien­cies at scale? This blog post will provide you a basic formula you can use when bulk editing paid search bids.

Before you begin, you need enough front end and back end perfor­mance data collected to make good deci­sions; you need to make sure your data is statis­ti­cally signif­i­cant enough to base deci­sions on. Ideally you should shoot for a minimum of about 100 clicks per keyword.

Before esti­mat­ing your new keywords, you need to keep two things in mind:

  1. Cost per Clicks are the product of your CPA and your CVR. So if you set a target CPA and you know your current Conver­sion Rate, you can calcu­late your new CPCs.
  2. Although you can calcu­late your ideal CPC, you must remem­ber that number is an Average CPC; you will need to figure out what Max CPC to set in order to end up with your target CPC.

With these in mind, here are 7 steps to manual keyword bidding in paid search.

Step 1: Down­load a Keyword Perfor­mance Report. Select a date range long enough to give you signif­i­cant data. Keep in mind that if you’ve made some drastic changes recently, your recent perfor­mance data may not be helpful in project­ing future perfor­mance.

  • In order to be able to calcu­late your new bids, you’ll need to include the follow­ing perfor­mance metrics: Clicks, Max CPC, Avg CPC, Conver­sion Rate.
  • I also like to include other metrics to get a better sense of the keywords’ perfor­mance: Impres­sions, Cost, Conver­sions, Avg. Posi­tion, and CPA.

Step 2: Based on your current perfor­mance, target a CPA goal you’d like your bids to support.

  • Use your perfor­mance data as well as the rela­tive impor­tance of that keyword to make this deci­sion. For example, think about a campaign that’s currently hitting a $10 CPA and you think you can achieve a lower CPA. That would mean lower­ing your bids, which will lower your average posi­tion and ideally get you cheaper clicks. On the other hand, if you have some conver­sions that are so valu­able that they are worth higher CPAs, you can raise their bids to increase the amount of conver­sions you can expect those keywords to drive. If you need more insight on this process, see our previ­ous post on setting budgets and CPCs.

Step 3: Based on your target CPA, calcu­late your new desired CPCs and add them as a new column. The calcu­la­tion for this new bid is:

Which breaks down to mean:
Cost/Clicks = Cost/Conversions × Conversions/Clicks

Step 4: Since you’ve calcu­lated your desired Average CPCs, you now need to calcu­late the Max CPC you must set. Do so by divid­ing your current Max CPC by your current CPC to under­stand the percent­age differ­ence between them. Multi­ply your desired Avg. CPC by that number to arrive at the Max CPC you should set.

Step 5: Copy the formula down the entire keyword report to calcu­late all your new CPCs. Some will be higher and some will be lower than your current average CPC; they will be priced to maxi­mize your return and drive effi­ciency.

Step 6: Spot check. You’ll find that this process may end up leaving with some wonky CPCs. For example, it could be that a given keyword may have had unusual perfor­mance during the date range you’ve selected, so calcu­la­tions based on their perfor­mance will be out of line with the rest. So keep your eyes open for new bids that are unusu­ally high or low. Also, if you have some keywords that are already in top posi­tion, there’s no benefit in raising their bids; grey them out and don’t modify them. Finally, there may be some keywords you don’t want to modify; you may want to keep bids up on some keywords for aware­ness or some other strate­gic goal.

Your sheet will end up looking some­thing like this:

Step 7: Submit your new keyword bids to the search engines.

Enjoy your effi­cien­cies!