Adjusting keyword bids will lower your CPA.
Every time a person searches for something on Google, a Google Ads auction takes place. All keywords (across all accounts) enter the auction with the goal of appearing on the search engine results page (ideally in a top position). Of all the factors determining the winners, the bid might be the most important.
The higher you bid, the more often you appear in search results, but the more you'll pay per click. Finding the right balance is essential. As you bid more, each click becomes less cost-effective.
You'll usually want to adjust a keyword bid based on its performance relative to your CPA target:
If a keyword is performing better than your CPA target, you should raise its bid to increase volume and the likelihood of conversions.
If a keyword performs worse than your CPA target, you should decrease its bid to reduce its cost and volume.
How does this improvement work?
Opteo only recommends adjusting a keyword bid if there is enough data to make a good decision. To make sure we’re looking at a combination of the most recent data but with enough volume, Opteo will:
Perform a ‘Minimum Clicks’ calculation which looks at, on average, for this keyword and keywords like it, how many clicks does it take to get to 3 conversions (minClicks = (1/AvgConvRate)*X). For example, if a group of campaigns has an average conversion rate of 10%, then minClicks = 30 clicks.
Check multiple look-back windows of 7, 14, 30, 45 and 60 days. In our example above, if a campaign has achieved 30 clicks within the last 30 days, Opteo will perform an analysis looking at this most recent data only.
Check when the last bid modifier was applied. We want to find a "clean" data window so that we're evaluating a keyword based on its performance at one bid amount only.
Once Opteo finds a clean look-back window with enough data to base a decision on, we analyse the keyword's performance compared to your CPA target (note, if you haven't entered a CPA target into Opteo, we will check performance against the parent campaign group average).
Where a keyword is performing better than the target, Opteo will recommend a positive bid modifier to increase traffic and conversions. Conversely, if a keyword is performing worse than the target, Opteo will recommend a negative bid modifier to try to bring performance back in line with your goal. Note:
If the keyword already has more than 90% absolute top impression share, Opteo won't recommend a positive bid modifier
If the keyword is in a budget limited campaign, Opteo will not recommend a positive bid modifier
All bid adjustments are capped at +/-30%
If a keyword's performance is more than 3x the target CPA, Opteo will recommend that you pause the keyword rather than adjust its bid.
Using our Bid Factory algorithm, we simulate performance at different bids and calculate the optimal bid adjustment to maximise the keyword's performance.
We present this data in a table within the Improvement, showing cost, clicks, conversions, and CPA. We also plot each bid against its simulated CPA on a scatter graph to see how performance is impacted at each bid level.
We'll also show you the keyword's search impression share, and absolute top impression share.
Once you've reviewed this data, if you agree, you can apply the Improvement in one click to Google Ads. If not, you can edit the bid modifier by clicking Adjust or dismiss the Improvement entirely.