Aug 292008

How To Compute Smart PPC Bids (3 min video)

If you find yourself wondering,

"What's the best way to calculate PPC bids, so I neither overbid nor underbid on a term?"

and you have three minutes to spare, here's a video for you.

The recipe:

  1. Predict the sales from each click on a given term (accounting for current daypart, seasonality, copy, matchtype, etc).
  2. Determine what fraction of sales you want to invest in advertising.
  3. Multiply those together.
  4. That's the upper cap on how much you can bid on that term right now, if you want to stay within your efficiency target.

Despite what I say in the video, the rocket science and secret sauce is in step 1, not in the multiplication.


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