November 12, 2015
If you are a consistent reader of PPC Hero, then you’ve read up on in-depth bidding strategies for the Search Network in Google and Bing. But what are the best strategies to utilize on other platforms? How should we be bidding on the traffic being received from our ever growing Facebook budget? How about managing the money in Pinterest? Or what are best practices for bidding on job boards such as Indeed?
We’ll go through a few different ways we can go about each of these areas separately in this article, but first let’s point to the common theme/formula across bidding on each of these platforms.
A key learning I have taken from the great Jeff Allen (is it obvious he is my boss?) is the utilization of goal establishment formulas in bidding that stay constant in all platforms.
For ecommerce, this formula consists of revenue per click data divided by your ROAS goal. For example – if in the past you are seeing a $10.00 value coming in per click received – and your ROAS goal is 250%, then take “10/2.5” in order to get the value you should be able to afford from a cost per click level and still hit your goals. This ends up being a bid of $4. It’s fairly simple math involved here, but this formula is one that can be used across all platforms, including Google, Bing, Facebook and more.
For lead generation accounts, the formula is a bit different. Utilizing conversion rates to come up with your goal is another fairly simple formula to utilize: “Conversion Rate*CPL Goal” would be the formula here. If you are seeing conversions come in on 5% of your clicks – and your CPL Goal is $75, then a bid of $3.75 should assure that you reach your CPL goal. Of course, conversion rates are not always this consistent, but it definitely works for accounts with any sort of consistency from a conversion rate standpoint.
Now that we’ve gone over best practices that can be used across platforms, let’s dig into specific strategies in certain platforms.
The first platform that comes to mind outside of Google and Bing is Facebook. Facebook might not be the trendy platform for the kids to use these days, but it is the trendy platform for advertisers. Why? Well, the user targeting capabilities that Facebook has provided are unlike any platform in terms of targeting individual users rather than targeting individual devices. Not to mention another trendy platform the kids are using these days, Instagram, is owned by Facebook. We have the capabilities to advertise here as well through the Facebook interface. With all of these great features and capabilities of Facebook, it is still unknown by many as to how to go about bidding. Here is the path I would suggest.
Step 1: Bid your max CPC slightly above the suggested max CPC in order to gain initial traffic.
Step 2: Monitor this performance. Potentially allow Facebook to take the reigns with conversion optimization strategies rather than using a max CPC in order to maximize your spend and garner more conversions.
Step 3: As you use strategies 1 and 2, check to see if you are pacing ahead or below goals. Check your revenue per click numbers and utilize the formula of (revenue/click)/ROAS goal. This formula could potentially lower your bids or raise your bids based on what type of initial performance you were seeing – but typically this would lower bids. If this formula ends up raising your bid dramatically, set a max bid change of 10-20% at a time rather than directly using this formula.
A common formula I’ve utilized to assure that I am not eliminating too much traffic by pulling back bids is to use ‘(Current Max CPC/Current Average CPC)*((Revenue/Click)/ROAS Goal). Essentially, this is the same formula used in the goal bid establishment, except it takes into consideration the average difference of your max CPC and actual CPC on Facebook.
You can also directly set a cost per conversion goal in Facebook. In this case, look into the average order value of your Facebook efforts, and use “AOV/ROAS Goal” to find what you should be willing to pay per conversion. Obviously, Facebook can not make a user buy something so this set up is all based upon projections. We’ve seen successes and failures with the cost per conversion bidding setup in Facebook.
Now that we’ve gone through Facebook bidding strategies, it’ll be fairly easy to go through Pinterest as the setups are very similar. Within the Pinterest interface, you will see that the bid is at Promoted Pin level. So for each Promoted Pin, you set the bid. Based on the targeting type (Traffic vs Engagement), you can bid based upon impressions or clicks. I’ve leaned towards setting up traffic campaigns and bidding by a CPC to assure we are getting clicks with our budget.
Similarly to Facebook, Pinterest gives a suggested range based on your targeting. Typically starting just above the higher suggested number is a good way to go, just like Facebook. Why are we bidding more than we have to? Well, this will get us traffic quicker and allow us to adjust bids to where we want to be at a performance level in a quicker manner. Once enough traffic is received to call the current bid a success or a failure, then utilize the same formula again: “(Revenue/Click)/ROAS Goal” in order to see where you can afford to put your bids at based on your goals.
As you add additional keywords or change other targeting methods, monitor the changes being seen at a revenue per click level and adjust your bid accordingly. Just like within Facebook, you can add to the formula in order to take into consideration the average difference between max CPC and actual CPC if you want to get more aggressive. All of this sound familiar, eh? As stated, the platforms all have similarities from a bidding standpoint.
The final area I am going to talk about is bidding on job boards such as Indeed. On job boards, we are typically looking at utilizing CPL goals for bidding. Sometimes, dependent on how quickly jobs need to be filled, the goals differ based on the job or job type. The chart below shows each job has a different goal from a CPL standpoint based on how high of a need the job is.
The formula being used is: “=conversion rate*cpl goal*(current max cpc/actual cpc)”. This brings us to our new suggested bids based on previous performance and CPL Goals. But going from a $0.75 bid to a $23.08 bid seems pretty drastic based off of 2 conversions coming in on 5 clicks. This is why no matter the interface I like to use a max change percentage. It is a smart strategy to have a different max change percentage based on how much data you are using to make the suggested bid change. In this case, we used 50% for 10+ conversions, 30% for 3-9 conversions and 20% for 2 conversions.
It makes much more sense to raise the bid on Job 14 by 20% rather than bidding up to $23.08 off of so little performance.
As can be seen, the methods in PPC advertising from a bidding standpoint all are done fairly similarly in an attempt to max out revenue or leads and stay within the ROAS or CPL goal. The Jeff Allen Formulas (or the JAFs?, I like it, we’ll use the JAFs) are very simple formulas, but formulas that can be used across all platforms. They help to assure you are meeting your goals you have set for each platform and maximizing revenue or leads while doing so.