| Title: | How To Compute Smart PPC Bids (3 min video) |
| URL: | http://www.rimmkaufman.com/rkgblog/2008/08/29/ppc-bid-formula/ |
| Printed: | November 21, 2008 |
| Source: | The Rimm-Kaufman Group Blog, info@rimmkaufman.com |
- August 29, 2008
- 5 comments
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:
- Predict the sales from each click on a given term (accounting for current daypart, seasonality, copy, matchtype, etc).
- Determine what fraction of sales you want to invest in advertising.
- Multiply those together.
- 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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