How to set your Ad bids per product so that the ROI does not turn negative. Its easy when you have 1 product. But how does one calculate and set bids accurately on hundreds or thousands of products?
Every business owner knows their approximate Operating Margin. The Profit Margin on the product itself is easy as well. So we only need to know how many Clicks it takes to sell that product.
( ( Product Profit Margin – Operating Margin ) / Clicks ) = Bid
Have you ever noticed how Amazon and Walmart consistently get the first spots in Shopping Ads every single time? They have the resources to do that. I imagine Amazon has the resources to simply over-spend (on Ads) while making up for the loss elsewhere. We can’t complete with that, but we can compete within the boundries of an acceptable ROI for your business.
The first step is to achieve precision in your bids – programatically. Once you know down to the penny the correct bid for each product, we can then employ real-time strategies that will increase your ROI without risking losses at month end.
We leave this subject here. It may be a short post, but the scope is too broad. The many complex strategies that can evolve from this juncture could fill a book. And we have only talked about eCommerce and Shopping Ads here, but the same concept can be applied to Keyword Ads for those businesses that advertise online but sell offline.
Gain the confidence of ROI perfection and expand your online revenue with Ad Automation.