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Google Adwords Bidding:Video Tutorial

Google Adwords is the advertising wing of Google used by advertisers all over the world. This video tutorial would explain the basics of Adwords bidding in an easy way.

Goal of an Ad

Every advertisement has a goal and this goal is tracked by way of a successful conversion.

Cost Per Acquistion (CPA)

The business must find out the exact cost per acquisition which is calculated as follows:-

Selling Price - Cost Price = Revenue (Total profit per successful conversion)

Conversion Rate

The rate at which successful conversion happens. It is calculated as follows:-

Conversions/Clicks = Conversion Rate

Value of a Click

Ater you have determined the CPA and the Conversion rate, the next  step is to determine the value of a click. It helps you to analyze the maximum amount you are willing to spend on every click (CPC). If the value of a click comes out to be $10 then you must bid at a rate of less than or equal to $10 per click.

CPA * Conversion rate = Value of a Click

Incremental Cost Per Click (ICC)

Incremental Cost Per Click = Cost of Incremental Clicks (CIC) / Number of Incremental Click (NIC)

Where:- CIC = difference in the amount of cost by changing the bidding
              NIC = difference in the amount of clicks by changing the bidding

When to change the bid based on the value of a click (Image credit:- thesearchagents)

Rest you can learn by watching the video below:-

Also See:-

Steps to Optimize Your PPC Campaigns
Why Seo is Still Favored by Organizations
Adwords Quality Score
Basics of Google Adwords
Seo Vs PPC Comparison
Determine a Keywords Overall Worth
How to Calculate CTR