Quick guide to PPC bidding for digital marketers

If you’re a digital marketer, you probably have a lot of experience working with pay-per click (PPC) ads. For many advertisers, PPC is the go-to option for driving targeted traffic, boosting brand visibility, generating leads and more. That’s why paid ads account for around 60% of total digital marketing spend for the average marketing team.

To get the most out of your PPC campaigns, it’s also important to understand PPC bidding. This process can be difficult to navigate. That’s why we’ve created this ultimate guide. It covers everything from PPC strategies to keywords and tips to maximize your return on investment (ROI).

What is PPC bidding?

PPC bidding is the process that determines which advertiser gets to display their ads in search results or on websites. Instead of paying a flat rate, advertisers set bids for specific keywords or phrases, which determines how much they are willing to pay each time a user clicks on their ad. Platforms like Google Ads use these bids to select which ads appear on a results page.

Your bid directly influences your ad’s placement, visibility and cost-per-click (CPC). Advertisers with the highest bids, combined with relevant ads and landing pages, are more likely to secure those coveted top positions on search engine results pages (SERPs).

How does PPC bidding impact costs?

PPC costs vary depending on many factors, including industry competition, ad quality and your bidding strategy. The average CPC on Google Ads is around $2, while on Facebook Ads it’s slightly lower at $1.86. However, CPC can range from as little as $1 to over $30 per click in high-stakes markets like the legal or insurance industries.

Understanding these variances in cost-per-click, competition and keyword performance can help you set more realistic PPC budgets. That helps you choose a bidding strategy that aligns with your specific goals, whether it’s maximizing clicks, achieving a target cost-per-acquisition or optimizing your return on ad spend (ROAS).

Types of PPC bidding strategies

Here are some of the most common PPC bidding strategies you can choose from:

1. Manual bidding

Manual bidding gives you complete control over your bids, allowing you to set a specific maximum CPC for each keyword. This is ideal if you want to closely monitor your budget and adjust bids for high-performing or low-performing keywords in real-time. However, manual bidding is time-consuming and challenging to scale for larger campaigns, especially if you’re dealing with hundreds of keywords.

2. Automatic bidding

Automatic bidding uses machine learning to adjust bids in real-time based on various factors, such as user location, time of day and device type. Google’s algorithms automatically optimize bids to achieve a specific goal, such as maximizing conversions or clicks. This strategy is more efficient for large campaigns with multiple ad groups and keywords. It saves time for marketers who want to focus on other aspects of their campaigns.

3. Enhanced CPC (ECPC)

Enhanced CPC is a hybrid strategy that combines manual bidding with automated adjustments. It allows advertisers to set a base bid, while Google adjusts the bid based on the likelihood of a conversion. This strategy is particularly useful for improving performance without giving up full control. It’s an attractive option for marketers who want a balance of manual control and automation.

4. Target cost per acquisition (CPA)

Target CPA bidding automatically adjusts bids to help you get as many conversions as possible within a target cost per acquisition. This strategy is ideal for businesses looking to optimize for conversions at a predictable cost. It works particularly well for lead generation campaigns where each conversion has a fixed value, such as SaaS companies seeking to drive sign-ups.

5. Target return on ad spend (ROAS)

This strategy adjusts bids to achieve a desired return on ad spend (ROAS). It’s ideal for online retailers looking to balance ad spend with revenue generated from conversions. With this approach, Google’s algorithms use machine learning to analyze vast amounts of data (user behavior, search context, historical performance, etc.) to adjust bids in real-time for each auction. This allows the system to optimize for high-value conversions and maximize revenue while keeping within the advertiser’s target ROAS.

6. Maximize clicks

This is an automatic bidding strategy designed to get the most clicks possible within your budget. While this can increase website traffic, it may not always lead to conversions, making it better suited for campaigns where brand awareness or traffic volume is the primary goal.

7. Maximize conversions

Maximize conversions automatically sets bids to help get the highest number of conversions for your budget. This strategy is widely used by digital marketers (45% of PPC specialists), as it optimizes campaigns based on the actions you want users to take.

The role of keywords in PPC bidding

Keywords are the foundation of any successful PPC campaign, because they trigger when your ads appear. They’re also directly linked to your bid costs.

Importance of keyword selection

A successful PPC bidding strategy always starts with choosing the right keywords. Long-tail keywords, which are typically more specific and less competitive, make up 70% of all search traffic. These keywords usually have lower CPCs and higher conversion rates, making them a cost-effective option for advertisers. In contrast, short-tail keywords are more general, tend to be highly competitive and are often more expensive.

Long-tail vs. short-tail keywords

Long-tail keywords are longer and more specific search phrases that are less competitive but highly relevant. These keywords typically drive fewer clicks than short-tail keywords but can deliver higher conversion rates due to their specificity. For example, a keyword like "buy boxing gloves online" is a long-tail keyword, whereas "boxing gloves" is a short-tail keyword.

Negative keywords

Creating detailed negative keyword lists helps you optimize your campaigns and prevent wasted budget. Negative keywords prevent your ads from being triggered by irrelevant searches. For instance, if you sell premium shoes, you may want to add "cheap" or "discount" as negative keywords in your ad platform to avoid wasting ad spend on users looking for budget options.

Drive growth with the right PPC bidding strategy

With the right PPC bidding strategies, you help maximize your company’s return on investment and get the best possible performance from your campaigns.

For most fast-growing businesses, an automatic or hybrid (ECPC) strategy makes the most sense, as it saves time and automatically optimizes your ad spend for the goals that matter most, from increasing traffic to maximizing conversions or hitting a target ROAS. Just remember to also optimize your keyword approach, especially by adding negative keywords to ensure your ads reach the right audience and avoid wasted budget.

No matter your growth stage, Channable provides all the key solutions businesses need to successfully advertise on Google, Amazon and other platforms. Find more information here.