Pay Per Click Bidding – Bidding is offering a competitive price that a bidder is ready to pay for a service. The term ‘bidding’ is always used in the context of auction. Bidding is very useful to set the value of an object, an art piece, a property, a commodity, etc. The amount itself is called as a bid.
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In the context of internet marketing, the amount an online business organization allocates for PPC advertising is known as PPC bid. The bids specify the maximum amount that an organization is ready to pay each time a user clicks your ad. This is called the maximum Cost-Per-Click (max CPC).
Factors that Affect Bidding
Bidding depends upon the following factors:
- Advertising budget of the organization
- The time the organization plans to use paid advertising.
- Keyword popularity
- Competition from other advertisers
What to Bid For?
With the help of bid management tools, you can bid for:
- Conversion events such as video views, contact forms, store directions, the time of ad display, etc.
- Keywords such as brand phrases, user phrases, direct response phrases, lead generation phrases, engaging phrases, etc.
Before you start bidding, you need to consult the seller to determine and set the price of the product or the service the seller is selling. The following list shows popular pricing strategies:
- Cost–Plus-Price – It is the simplest method of determining price. Here, you sell the product or service for more price than it took for making it.
- Competitor-based Pricing – It involves finding out the prices set by other businesses in the same sector, and then adopting the numbers, with some positive and negative marginal numbers according to how the seller’s product does for that day.
- Value-based Pricing – Note that the prospect is not all that interested in the manufacturing cost of a product; he is rather more concerned about receiving the full value for the price he pays. Hence, it is quite critical to research the other products available to the prospect and analyze what additional value do they offer, and price your product based on the value it provides.
How Much To Bid?
When it comes to pricing, what you pay for depends on overall media budget, aggressiveness, negotiation skills, and the business circumstances.
Factors to Confirm Before Bidding
Before bidding for the keywords or conversion events, here are the questions you must be ready with the answers:
- Is my goal defined and known? What is this PPC ad meant for: increasing brand awareness, increasing sales, or increasing number of subscribers?
- Is the budget set properly for this ad?
- Is the list of potential keywords ready?
- Is the list finalized into a targeted list of words manually by hiring professionals or by using a tool?
- At what times do I want my ad to be displayed?
- Which pricing strategy is appropriate for this particular ad?
- What is the starting bid price and the last bid price required to put for this product or service?