Google AdWords Bidding Process

1. Google AdWords Bidding
Process
By: Kumar Abhishek

2. Google AdWords
 Google AdWords is an online advertising service where advertisers pay to display
brief advertising copy to web users.
 Google AdWords' system is partly based on cookies and keywords predefined by
the advertisers.
 Web pages from Google and from partner websites are designed to allow Google
to select and display the advertising copy selected.
 Advertisers pay when users divert their browsing to seek more information about
the copy displayed, and partner websites receive a portion of the income that is
generated.

3. Bidding System
 Advertisers choose which keywords they would like to target and set price they are
willing to pay for single click from that keyword (Which is known as Pay per click).
 The same bid is compared to other advertisers bidding on the same keywords in
same locations

4. Comparison among the Bidders
 Comparison is done on the basis of Ad-rank of your advertisement which is
determined by certain factors.
 Quality Score.
 Your click-through rate (CTR):
 The relevance of each keyword to its ad group.
 Landing page quality and relevance.
 The relevance of your ad text.
 Your historical AdWords account performance.
 Ad extensions: Basically the Ad format you’re providing to google to place your ad.

5. A Walk Through

6. How to Set a bid?
 Setting a Bid depends on these factors:
 Conversion Rate:-
 A conversion happens when someone clicks your ad and then takes an action that you’ve
defined as valuable to your business, such as an online purchase or a call to your business from
a mobile phone.
 Calculation:
 (Total Clicks on Ad) / (Total Impressions) = Click Through Rate.
 This value is also available by google analytics provided you are an old user or via browsing similar ads.
 Life time Value:
 It is Important to understand how much each new customer is worth on an average.
 Nature of Business.

7. Continued…
 Conversion Rate x Life time value = Suggested Starting Bid

8. Walk through

9. AdWords UI

10. Thank You