How to Calculate Adwords Bids for ROI Perfection

The typical problem a large eCommerce vendor eventually encounters is how to set 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

Managing large inventories requires automating this – that may mean hundreds of calculations per day. This requires some programming. This is called Ad Automation.

Have you ever noticed how Amazon and Walmart consistently get the first spots in Shopping Ads? They have the resources to do that. We offer our resources and experience to small-medium sized businesses to give you the same ability.

The first step is to achieve precision in your bids programatically. Once you KNOW down to the penny the correct bid for each product – you are enabled to flourish – to imagine strategies that will increase your ROI without taking chances with unknowns to your business.

Once you have automated your Google Ads, you’ll see that there are many other possibilities to increase your overall ROI or allow you to expand into other business segments.

We leave this subject here. It may be a short post, but the scope is too variable depending on your business. 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.

Contact us if you would like to explore how to apply Ad Automation to your business.

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