The Bidding Strategy That is Guaranteed to Be Profitable

guaranteed ppc profit

If you want to experience a true case of information overload. Go to every Pay-Per-Click website you can find, find a place to ask questions whether in the forums or otherwise, then ask “What is the best bid optimization strategy”. I would be surprised if you got less than 100 responses in 24 hours. Some people will tell you low, some people will tell you high, some people will say just below your competitors, some people will tell you just above your competitors, there is literally an endless list of combinations. Some but not all, have a high probability of being profitable, but it takes a keen eye & a steady hand to make it happen. What I am talking about is a quick dirty bidding strategy that will end in profit.

The strategy you ask? Before I reveal the secret you must go on a quest to find some data about your campaign. Here is the information you will need:

Landing Page Conversion Rate-

Average Lifetime Profit/Conversion-

Desired Profit Margin-

Once you have those numbers I will reveal the secret to you. Let’s make up some fake numbers so you can get the picture. Let’s say Joe want’s to start a campaign for his personal training service. He has a spiffy website with clean landing pages & easy to see call-to-actions. His landing page conversion rate is 2%, the average lifetime value of a client is $2000 dollars profit, and doesn’t want to spend more than 50% of his profit to acquire a customer, or its not worth it. So how much should Joe bid? Well let’s break it down.

Joe will have to send fifty people to his to get one conversion. That conversion will be worth $2000 to him in the long run, but he is only willing to spend $1000 to get that customer. So that means he will have to pay for fifty clicks with $1000 that averages out to paying $20/ click. Joe should pay $20 click indiscriminately of how that keyword performs. This is a strategy that ensures you meet your goals of profitability, not that you maximize your profitability. Keep that in mind. So now I can literally feel the questions through the computer as I write this.

Shouldn’t that change over time? To maximize profitability, Yes. However remember you wanted a bidding strategy that was guaranteed to profitable. There is nothing wrong with getting a safe ROI. However, if you want to maximize your profits, you will need to take risk & experiment to find what works best for your website & your budget.

What if my landing page is brand new? Aim low. It’s always better to underestimate your pages than to overestimate. Look at the outcomes for both. Joe in scenario A) thinks his page will be at 1% conversion rate when it is actually 2%. He bids $10/click. True it may take him longer to get clicks, but he will end up only have to send 50 people to his site when he thought it would take 100. That’s a win. Joe in scenario B) feels confident about his page & assumes a 4% conversion rate when it is actually 2%. He will bid 40$/click and end up sending twice as many people as he thought he would & and he will pay more for it. That’s a loss.

But it will take me forever to get conversions that way! Remember you wanted safe not fast. Slow and steady gets slow and steady profits. Fast occasionally gets profit fast & occasionally crashes & burns. If it’s moving too slow for you try and find different keywords with lower CPC, or consider changing your client acquisition model.

My budget is too small for that kind of bidding, how does that work? I’ll go over in a later post the most profitable way to set your budget & why that is, but for now you have a few options. Option A) embrace the fact that you have to spend money to make money & get a bigger budget. Option B) Be patient. If Joe’s budget is only $500/month, he may have to wait two months to get a conversion. If Joe was smart, he would take the other $1000 he didn’t spend and re invest it back into PPC, so this time he doesn’t have to wait two months. However, be realistic. If you are a tax attorney with a free $100 dollars from Google that’s a great start, but it would be a stroke of luck to get a conversion with that unless you have 95% conversion rate.

Well I hope I’ve answered most of your questions. I also hope you can see that while this will not maximize returns, it will provide you with steady returns. If you have any comments, concerns, or think this is the dumbest strategy you’ve ever heard please comment & let me know! If you want some advice on your landing page i’d be happy to take a look, just let me know where to find it via the contact page.

About Chris

Chris is a marketing consultant based in Memphis, TN. He specializes inSEO Audits & AdWords Management . Follow Chris on twitter(@KentKineticSEO) for more marketing strategies and techniques.

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