One of the recent blog posts by Google Performance Ads Marketing Director, Matt Lawson describes the concept of Profit driven marketing.
As per this concept, businesses who bid higher for their ads generally receives more clicks and this leads to more sales. In order to make huge profits, more money should be invested in adwords. An effective bidding strategy shouldn't be focussed on a particular budget or cost per acquisition (CPA). For example, would you prefer an $100 CPA or a $110 CPA? if the profit per sale is higher then the bid should always be kept higher because this will lead to higher sales and profits. The crux is "don't overvalue your investment, undervalue it".
More information can be found here:
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