how to optimize bids for maximum ROI?

Discussion in 'Google AdWords' started by chemoul, Jul 4, 2007.

  1. #1
    I'd like to find a way to maximize my return on investment from Adword campaigns.
    So far I'm tracking how many sales each keyword generates, calculate my earnings per click (EPC) for each keyword, and adjust my bids based on this information.

    For example, if my EPC is 0.40 and I wanted to double the money I invest in my Adword campaign I would set my keyword bid to 0.20

    This system isn't perfect of course and doesn't take into consideration the following:
    - lowering the bid may result in a lower ad position which may lead to less clicks and therefore a lower overall ROI
    - a higher bid may result in a lower EPC, however an increased amount of clicks may result in more sales and ultimately I higher overall ROI (despite the lower profit margin)

    Ideally I am looking for a way to track and manipulate my keyword bids so that I can achieve the highest overall ROI. I do not mind lowering my profit margin if it means it will generate extra sales that will result in a higher overall profit.

    Is there a software/system that can help me achieve this? I would assume that such a solution would need to track the performance of keywords across multiple periods of bid adjustments and to then compare the performance and overall ROI for each adjustment.


    Thank you for your help.

    Steve
     
    chemoul, Jul 4, 2007 IP
  2. sarathy

    sarathy Peon

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    you may not know what your "highest overall ROI is", If a software can achieve what you are willing to, everyone would be using it.,

    Are you using only search campaigns or both contextual and search?

    If you have competitors and they have adsense on their site, try creating a CPM based campaigns on their sites (I tried it on some of our competitors and had some luck until they excluded our site)

    If you are satisfied with your current ROI based on the current bids, try identifying and adding some more keywords
     
    sarathy, Jul 5, 2007 IP