How you can decide ‘Should I bid?’
One age-old question that frequently comes up when I chat with clients that are new or new prospects is, “Should I bid on universal terms or my brand provisions where I rank in the top three organically?” This question is hardly trivial.
Before you begin, six essential questions to ask.
The best way to answer this question is using a multistage process of evaluation, followed by experiment. Let’s begin by assessing brand keywords.
Have you got a distribution channel that also bid on your keywords but carries services or competitive products?
Does your name or product/service give itself to a lot of broad match terms/phrases which might trigger competitive advertisements (unless your brand terms are negative-matched)?
Would you commonly get organic site links?
For paid search brand queries, are you currently using a landing page that is different from your home page (a popular approach which is generally undertaken after testing shows higher conversion rates)?
What percentage of your traffic AND impressions are on smartphones (vs. tablet/desktop computer)?
Three key concepts to understand
It ’s time to introduce a few economic notions that directly apply Should I offer?” issue. One is “opportunity cost that is ” — of not doing something, the cost/loss. The 2nd is the thought of net profit that is marginal. That ’s about understanding the relative profit of every one of the search and paid media you’re participated in.
Finally, there’s the concept of “an inelastic auction.” Inelastic auctions are said to exist when obtaining more volume results in dramatically escalated costs as you battle others for leading places.
That’s it for the economical notions (whew!). But there’s another factor that applies here: the concept of cannibalization — the primary driver of the “Should I offer?” issue. At these times, marketers need to visit my site get them anyhow, eventually.” and commonly attempt to pare back PPC spends, reasoning that “they typed within my brand Your own “cannibalization index” could be determined by assessing your answers to questions 1–6 above.
Okay, you’ve got the theories. Let’s move to solving the question.
Five steps to a solution
Step 1: Calculate CTR (click through rate) on Organic. Search Console may be used to ascertain this.
Step 3: Calculate overall cumulative CTR when the paid and organic listings coexist in the SERP. (Accumulative CTR lets us understand the incrementality on complete clicks and CTR of paid.)
Step 4: Compare conversion rate on paid vs. organic, including taking PPC and organic site links into account. (Regularly marketers use different landing pages due to their paid primary and site link visitors, and people tuned landing pages out-convert the organic pages. If this isn’t accurate in your case, then your computations are made easier.)
Step 5: subtract that number from your paid click count, Take the fall in organic clicks as a result of your paid listings getting the clicks, and re-calculate the ROI of the paid promotion, based only on the step-by-step clicks that the campaign that is paid provided.
Can I really do that?
“But wait,” you protest, “I can’t merely turn brand keywords off throughout a test. If sales drop, my boss will kill me! Furthermore, where else am I going to put that budget? I can’t, and most of the other keywords are already close to minimum satisfactory ROI use the brand dollars to bid upward those!”
OK, fair point. In many cases, it makes sense to bid on keywords that are branded, even after taking cannibalization. If you don’t wish to send too many ripples through your present efforts as an example, limit the scope of your experiment, at one time, by testing ends in five midsized cities. (You’ll need to utilize location bid modifiers/alterations to do this. See
Should you choose to run your evaluation in particular geographies instead of nationwide or globally, you’ll possess the additional advantage of conversion data that’s not subject to seasonality or alternative variables that may show up in a just longitudinal evaluation (evaluation over time with one time period being the control group).
Internal business politics also play a role. You might want to include a fudge factor to your own calculations predicated on a Marketing Mix model calculation, or in the event, you are still building a brand and desire to be recognized as a market leader.
If you’re like most marketers who run this test, you probably will realize that command on your brand keywords still is practical from an ROI, net search gain and budget apportionment evaluation. Others, however, may discover that paring back spend — or raising it — raises net search profit (profit after deducting all costs). For organic standings that are high, the solutions are far dependent on tail terms or head and landing page variations.
Something is for sure: if your manager is questioning brand spend or spend on high ranking keywords that are organic, run a test like the one above. You are to the proper path I’ll gain the assurance that you’re doing the correct thing or, at the very least.