Bidding is a key part of managing your Sponsored Search account. An effective bidding strategy can help you:

• Better manage your bids.
• Allocate your advertising spend to help you receive the maximum amount of targeted traffic.
• Gain a higher return on your advertising spend.

Bidding at two levels

You can bid at two levels: keywords and ad groups.

• At the ad group level, you set separate bids for Sponsored Search and Content Match campaigns.
• At the keyword level, you can only set a custom bid for that specific Sponsored Search keyword, or use the default bid from the ad group.

For example, if you set a custom bid of $0.50 for a keyword, it will set the bid for that keyword at that price. But if you set the keyword to use the default bid, it will use the bid you set for the ad group.

Bidding tools

Our bidding tools enable you to view:

• Estimated monthly clicks you’d receive for a given bid
• Your share of all the available clicks, showing how many clicks you’re leaving to your competitors
• The estimated bid to get the highest potential amount of traffic¹

Your ad’s position in the search results is determined by two things: your bid and your ad’s quality index score. For a given bid, ads that have a higher quality index may be displayed in higher positions in search results. The quality index displayed for your ad can be a good indicator of its expected performance.

How to determine your bid

To determine how much to bid, consider the following factors:

• Maximum budget needed to acquire one new customer (cost per acquisition)
• Number of visitors who convert into customers (conversion rate)

Then you can use the following formula to help calculate your bid: cost per acquisition x conversion rate = your bid (Example: $20 x 1.5% = $0.30)

To learn more about bidding strategies, see the Improving Your Results section.

¹ Please note that these calculations are estimates only and are not guarantees of click volume.