subject: How To Make Ppc Bid Management Profitable? [print this page] Online ad campaigns with major search engines are costly and confusing and PPC bidding is worth only when you can afford to spend realistically. PPC bid management begins by identifying the maximum CPC (cost per click) for a given keyword phrase. It changes over a time period and varies from one search engine to another.
If you dont know the actual value, start with an educated guess. Either it could be based on thumb rule or internal factors such profit margins. For instance, lets assume you bid on the keyword shoes but are unaware of your max CPC.
First Method
One way to estimate CPC is by taking top 5 bids on overture and computing the average. Current bids range from USD 0.310 to USD 0.51. This becomes your max CPC. Another approach is by using profit margins as a base to determine CPC.
Supposedly your profit margin is thirty percent and your average sales price for a pair of shoes is USD 90. This leaves you with a profit margin of USD 27 for every shoe. Lets assume you have a one percent conversion rate, that is, you expect one sale for every 100 visitors from a PPC ad. If you have an ad of USD 27 spread over 100 visitors, you get 27 cents per click.
Second Method
The other way to approach CPC is by having an ad spend based on revenue. For instance, if you wish to spend fifteen percent of revenue on advertising, then the ad spend works around USD 13.5 for each shoe.
Again, assuming a conversion rate of one percent, it leaves you with 13.5 cents for each click. You can adjust the CPC based on the ad campaign progress and actual conversion rate.
PPC has increasingly become an effective, flexible and fast way to boost online web presence and attract traffic. When combined with dedicated and strategic PPC Bid Management service, PPC takes online marketing to an entirely new level.
