April 10, 2020

Understanding Keyword Bidding in Google Ads

5 min read

Written by: Weslee Clyde  |  Share:

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As buyers, we all turn to Google when we have a problem or are trying to find out more about a product. I don’t know about you, but I tend to only look through the top few results, and sometimes I don’t even make it past the first two. Because of that, it’s important to show up the top search results on Google. 

While there are a ton of things you can do in hopes of getting Google to put your website as a top result organically, that can take time and is hard to control. But, companies that are willing to pay to be seen can appear first. 

These ads will display first based on how well your ad copy and message aligns with the keyword that you are going after, as well as how much you decide to bid to rank for that keyword. 

What is Bidding? 

A bid represents the amount of money you are willing to spend for a single click on a given keyword in Google Ads. Those bids will dictate where your ads show up in search results. 

“The best way to think about bidding and all of paid advertising is like an auction,” says Guido Bartolacci, Head of Demand Generation for New Breed. “The auction is for placement in Google search rankings for a search term that is made.” 

Every time a search is made in Google, Google will run the results through their algorithm and rank them according to how much people are willing to pay for that term as well as your quality score for that term. 

You manage bidding inside of your Google Ads platform. The platform can seem overwhelming at times, especially if you are managing large accounts or a lot of different campaigns. But, it can be broken down and thought of in smaller chunks. 

All of your keywords, bids and ads live inside an ad group, which lives within a campaign. A campaign can contain multiple ad groups, each with different sets of keywords and ads. Campaigns are also where you go to adjust your daily budget as well as how much money you’re willing to spend in total for that given day on that keyword. 

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How Do You Adjust Your Bids?

You can go into Google Ads and make changes to your bids as often as you like to try to optimize for the best results possible. One of the most important things to note about bidding is that changing your bids will not alter the budget you have set for your total ad spend. 

When it comes to the amount you should be spending on a bid Google will tell you the range from low to high that is typically spent for that keyword, but it is ultimately up to you how much you spend.

There are two different methods you can use when it comes to adjusting your keyword bids, manual and automated. 

Using an automated method will allow Google to maximize for whichever strategy you choose, based on the budget you have set. 

Automated bid strategies include cost per action, target return on ad spend, maximize clicks, maximize conversions, maximize conversion value, target impression share and manual cost per click.

Google will base the changes it makes off of past performance, but it can’t be used to account for things like recent events that may affect the performance of your ads.

“Generally speaking, I always recommend people are as hands-on as possible in controlling their bids,” says Guido. 

Depending on your level of familiarity or experience with paid ads, it may be worth going with an automated bid strategy to take some of the guesswork out of it for you. But, if you have time to understand the bidding system, there is a much greater opportunity for results with a manual strategy.  

How to Optimize For Keyword Ranking

We said earlier that a bid is how much you are willing to spend for that keyword, but the bid alone will not determine where you rank. 

Just like with organic search, Google doesn’t just want to give the top result to the person spending the most money without validating the content or page an ad is promoting.  

The other factor that comes into play in where you show up in a ranking is your quality score. 

“All things equal, if two companies are bidding the same amount on the same keyword, but one has a higher quality score than the other, the company with the higher quality score will rank higher,” says Guido. 

Your quality score for a given keyword is a representation of three primary factors:

  1. Ad relevance 
  2. Landing page experience 
  3. Expected click-through rate 

Ad relevance

Your ad relevance score is a measurement of how closely your keyword matches the message in your ads. 

“For instance, if we were to bid on the term ‘Demand Generation’ at New Breed, and then our ad said ‘Get the Ultimate Guide to a Website Redesign’ that would have a very poor ad relevance score because those two things are not aligned at all,” says Guido. 

Landing page experience

The landing page experience is very similar, and that score is based on how relevant the landing page is for the people who click on your ad. It’s essentially how well the messaging on your landing page aligns with the ad that the visitor initially clicked on. 

So, if we ran an ad for the term “demand generation” but when users click through to our landing page the copy was all about how to fix your website, and we didn’t even use the term demand generation, that would garner a poor landing page experience score.

Expected click-through rate 

Expected click-through rate measures how likely it is that your ad will be shown based on click-through rate. 

This number is an estimation, so it’s important to remember that it is not the same as the actual click-through rate which you see as CTR in your account metrics.

This is the most complex of the three factors that Google uses to determine quality score. This measures how likely it is that your ad gets clicked on when shown for a particular keyword. This is based on your keyword’s past performance based on your ad’s position. 

In each category, you will be given a score of above average, average or below average. When trying to improve this score, your best bet is to take a look at how relevant your ad truly is for that keyword. Evaluating this metric can help you find the keywords that you may not want to make a priority or bid on at all. 

All three of those factors will give you your overall quality score, but Google will show you how you are scoring in each area so that you can adjust if need be to increase your score. 

Final Thoughts 

When it comes to paid advertising and choosing how much to bid and what keywords to go after, it’s all about analyzing and adjusting. Be sure that you are going after relevant keywords for your business and be sure to regularly check on how they are performing so that you can make updates to your ads and bids along the way for better results.

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Topics: Website Strategy, SEO & Paid Search

About The Author

Weslee Clyde is an inbound marketing strategist at New Breed. She is focused on generating results using inbound methods and is driven by the customer experience. When not at the office, you can find her binging a docu-series on true crime or perfecting her gluten-free baking skills.

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