The Complete Guide to Keyword Bidding

Digital Marketing

Keywords help marketers get results. They help users find useful content, and they also help search engines to rank content. But to use them effectively, you must understand how keyword bidding works.

Taken together, keywords form a fundamental part of any search campaign. Using Google Ads (or a or Bing or Yahoo), you’ll see many options for choosing your keywords. You’ll also see the cost for those certain search queries.

We all turn to Google’s top results when trying to solve a problem or buy a product. That’s why it’s important that you choose your keywords carefully and bid on them with a clear strategy. You will use them to help your site rank organically and also to be seen first when you advertise.

Here’s what you need to know about keyword bidding, what it is, its types, and how to select keywords as well as a bid strategy. You will learn how to discern between the many possible keywords and smartly deploy them to achieve marketing goals.

Read on to explore our guide to keyword bidding designed to empower your campaigns.

What Is Keyword Bidding

Everything starts with a query and keyword.

When someone searches for a product on Google, the search engine mines its advertisers for matching keywords. This enable Google to display helpful ads. More than one advertiser can bid on the same keyword, competing for prominence.

A keyword bid is the dollar amount that you are willing to spend for a click on your ad. Your bids will determine whether and when your ads display in search results. The item you are bidding on is placement in search results for a keyword. Google calls the process of selecting what ads to display and when an auction.

Placement in search results is not determined strictly by how much you are willing to spend. Keywords also depend relevancy and quality score. Keyword relevance means: How relevant are the keywords you choose to the page on your site that they are advertising. Quality score measures how well your ad compares to your competitors. Your quality score multiplies your bid amount leading to an outcome for the auction with multiple bidders.

You manage keyword bidding from your Google Ads platform for many combinations of keywords, ads, and bid structures. Use it to set your daily budget, as well as the total budget for how much you want to spend. There are many ways that you can bid on keywords rather than merely “set, and forget.”

Instead, you will have to determine which style of keyword bidding works for your marketing goals and industry.

Types of Keyword Bidding

Google Ads offers eight types of keyword bid strategies for search (excluding the Display Network). This help you optimize and personalize your campaigns for a variety of goals. Let us work through each type, giving a short description and the best situation in which you can use it.

  • Manual CPC – Manual Cost Per Click (CPC) gives you control over bidding, meaning more time spent on monitoring and adjustment. Manual CPC is not a strategy for beginners, but it does allow you to quickly build ads that are successful. Lastly, Manual cpc bidding is the best way to get performance data for your campaigns prior to shifting to automated bidding.
  • Target CPA – If you want to optimize conversions, Target CPA (Cost Per Acquisition) bidding automatically sets a custom bid for each search. Some conversions will cost more than others but it will always average out to the amount you can afford to spend per customer.
  • Target ROAS – This bidding strategy sets bids to maximize conversion value based on your ideal return. For example, if you want to earn $100 dollars for every $20 spent on advertising, you would ideally use Target ROAS (Return On Ad Spend). It can help you observe the efficiency of your campaigns.
  • Maximize Conversions – The simplest bidding strategy offered, Google      automatically runs your bidding to get you the highest conversions for the amount you set. Their algorithms will spend your money wisely to avoid overly high, competitive bids. This is helpful if you want to quickly set up an ad.
  • ECPC – Enhanced Cost Per Click (ECPC) is a favorite strategy. Using “Smart      Bidding,” Google increases or decreases your bid amount based on the chance of driving a sale. Bids are averaged to meet your maximum cost per click, taking advantage of easy wins while remaining competitive.
  • Maximize Clicks – Maximize Clicks is also an automatic strategy. Based on your daily budget, Google will drive the greatest number of clicks this way, helpful for users seeking to focus on traffic generation. It’s the least recommended strategy because it doesn’t generate a direct result besides getting you clicks, but it’s good for getting more data if your campaign isn’t generate sufficient click volume with other bid strategies.
  • Manual CPC – Manual Cost Per Click (CPC) gives you complete control over bidding, meaning more time spent on monitoring and adjustment. This is not a strategy for beginners, but it does allow you to quickly pivot toward ads that are more successful.
  • TSPL – Target Search Page Location (TSPL) automatically lets Google adjust bids to show your ads on the first page of results or in the top four results. This is great for increasing your presence when staying top of mind is a primary objective for your marketing efforts.
  • Target  Outranking Share – This automated strategy is useful for targeting      competitors. You choose a website or competitor you want to outrank, and Google will increase your bids to outrank its ads, giving you superior brand awareness.

Selecting a Keyword Bid Type

The type of keyword bidding you choose should be determined by your marketing goals. If you want to focus on conversions, you might choose Target CPA or Maximize Conversions. You could use ECPC and Maximize Clicks if your more focused on generating traffic and interest. And, finally, you might be aiming to be more competitive and visible through Target Outranking Share.

  1. Your first task is to clearly articulate and identify your goal for the campaign, and Google Ads will walk you through this as you design your ad and plot its structure.
  2. Then, you will determine which keyword bidding type is most suited to your marketing goal for the campaign. In doing so, you will also determine      which metric will indicate success.
  3.  Finally, implement the bidding structure, and proceed to choose the best keywords for your product, service, and goals for the client.

How to Choose Keywords

Choose keywords for your ads using Google’s Keyword Planner. You will be given four basic options for choosing keywords, and each is important to consider when making intelligent selections:

  • New Keyword Search. When you type a phrase into the Planner, it generates a list of new ideas for keywords based upon the theme and intent of the terms you’re researching.
  • Keyword Lists. For multiple keywords, this process creates new keyword      combinations based on a list you enter manually.
  • Volume and Trends. The tool shows the historical trends and search volume for a given keyword.
  • Click and Cost Performance. These forecasts project the performance of given keywords based on your budget and can be used to back into forecasts for conversion and CPA projections.

When using one of these keyword planning options, you will identify keywords that historically perform, that work in new combinations, and which are related to a specific phrase.

If you are struggling, you can generate related terms by entering a landing page (such as a page from your site), a simple phrase for long-form keywords, and even choose a product category to discover trending terms.

Edit Your Lists

After you have generated your list of keywords, analyze them for their location, monthly volume, suggested bid, and competition. You can filter out keywords by how difficult they are, how much they cost, and where they are searched. This should significantly pare down the number of keywords that you will find worth targeting for high-performance marketing.

Choose Easy, Quality Wins

Digital marketing agencies know the competition level of a keyword term can inflate the cost per acquisition, click, and impression. Competition levels raise the stakes in the auction for appearing in search results. If you want to gain a top-level position, you will need to find keywords that match your budget while offering relevance to your campaign and, ideally, low competition.

Forecast Your Keyword Plan

To add a keyword to your search campaigns, add quality keywords to your plan. Once you have chosen these keywords, then set a daily budget, maximum bid, and geographic location. Google will use to this information to display your ad after auction. In this final stage, you can use Review Forecasts to estimate the performance of your ad in these key areas:

  • Estimated Clicks
  • Likely Impressions
  • Average Position
  • Mean Conversion Rate

Use these options, analytics, and forecasting features to isolate the best keywords for your goals and for scaling your search campaigns.

Final Thoughts on Keyword Bidding

We hope you found this guide useful in clarifying what keyword bidding is. Use the steps and information above to choose all of the possible keywords for your industry. Then choose a bidding structure that matches your goals.

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