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:

CPC = CPA × CVR
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!