Surfside PPC Podcast Episode 3 - When Should I Change My Bid Strategy?
What's up, everyone? Welcome to episode three of the Surfside PPC podcast. Now I want everyone to get involved with the podcast. The whole point is that if you are a listener, I would like for you to ask your questions. Now with being a listener and asking questions, basically you just need to be a member of my school community, my Patreon, or my YouTube membership.
Corey:So one of those three options, you can ask questions from there and that's where I will answer them. If you're looking for information on all of that, go to surfsidepc.com. You can join any of those. Very manageable in terms of pricing and my goal is to give you way more in knowledge than what you're actually spending on that. So hopefully you save a lot of money on Google Ad just by listening to this podcast.
Corey:So if you wanna ask a question, that's how to do it. Today, have two questions lined up. We are gonna be talking more about bidding strategies, conversion tracking, when to make certain decisions when it comes to bidding. So the very first question is going to be
Question 1:My target CPA has been set to $50 for the last month, but our cost per conversion is around $75.
Corey:What is the best way to handle this if I wanna get my cost per conversion down? We have our conversion tracking is set up, and for the last thirty days, our cost per conversion is $75. For our campaign setting, we have our target CPA set around $50. So does it make more sense for us to try to get this cost per conversion down to 50 or where should we set our target CPA? What should that target be based on the results of the last thirty days and based on ideally a conversion being 50?
Corey:So very good question and kind of the battle that you go back and forth with in Google Ads. It's actually really funny. Like years ago when I would manage Google Ads, you would have a client that was consistently around $30 cost per conversion. And if it went up to $40 cost per conversion, the client was about ready to fire you. That's say, okay, you're just not managing my account because I know I can get $30 cost per conversion.
Corey:Now it's kind of like, you know, there's probably clients that still do that, but you're just gonna keep firing all of your agencies because the next month might be $25 cost per conversion. So a few different things about cost per conversion numbers. I really like to look at different trends. I like to look at my thirty day trends, my fourteen day trends, my sixty day trends, last month, the previous month, different time periods, and kind of get an idea of what does my cost per conversion generally look like. You also need to have an understanding like I have clients that tell me, hey, I want my cost per conversion to stay under $150 You know, enter any number there.
Corey:And when I have a number like that, it gives me a little bit more leeway as an advertiser to be able to bid a little bit more aggressively or vice versa bid in a way that's not so aggressive and trying to hit that So to answer the question, if you are at a $50 CPA target and your current cost per conversion is $75 if you're getting plenty of volume there and you're seeing good results, then basically what I would say is if your goal is to really lower your cost per conversion, if you're like number one priority, get cost per conversion down, even if it comes at the expense of conversion volume. So let's just say that's number one priority. Then I'm looking within the actual campaign itself. I'll leave my CPA target right where it is. Sometimes what I'll do is I'll actually increase my budgets because I wanna give Google more budget to work with.
Corey:That depends on where your budgets are at and whether or not you are limited by budget. But ultimately what I wanna do is I want to go in the campaign and I'm trying to find anything that is kind of dragging down my campaign. So for example, that could be something like a couple of keywords in the account that are getting clicks, getting activity that aren't driving conversions that are actively bringing up your cost per conversion or making your conversion rate slightly worse. So I'm looking for things like that in the account of areas of improvement. You know, if you're running three responsive searches, search ads per ad group, then look at your responsive search ads, see if anything is converting a little bit better.
Corey:If you're doing a landing page test, see if one of the landing pages is performing better. If you're not, maybe implement a landing page test. So in the case of, I really wanna get my cost per conversion down to $50 I'm generally looking for things within the actual campaign itself. So that's gonna be keywords, ads, assets. You could look at your devices, you could look at locations where your ads are showing.
Corey:Ultimately, it really depends on how much you're spending, how much volume you're getting and what your ultimate goals are. So if you're getting plenty of leads, then yeah, you can keep your target pretty low. And you know, if it's not a case where it's like we need more leads to survive as a business, then yeah, I think you would keep your targets pretty low and you're looking for those small opportunities within the actual account itself to lower your cost per click and improve your convert. So your bidding, improving your actual targeting itself. This is sometimes where I would go in and set up a portfolio bidding strategy.
Corey:And I would say, let's set our target CPA to $50 and maybe we wanna set a maximum bid limit. Go through your search terms for the previous thirty, sixty days. Look at some of your really expensive clicks and just, can we cut out a few really expensive clicks? If your keywords are generally 15 to $20 at convert, I still would set my max calls per click pretty high. I wouldn't set it at $20 So as you set more of these $50 target CPA, max cost per click, the limit of $30 for example, in a portfolio bidding strategy, what's going to end up happening is you're setting constraints on your Google Ads campaign.
Corey:I think constraints are a good thing because ultimately if you don't set constraints, Google's happy to just spend your budget wildly. So these constraints that you set, basically then you are able to have more predictable performance, but it comes at the expense of volume. So over time, what could potentially happen is if costs continue to rise and you're not actively managing your account and maybe you have a down month or two where conversion volume starts to drop, then you can see at times where, okay, cost per conversion has now doubled because we're just not getting enough conversion data into the account. So very first thing is I am all for being more efficient and keeping your CPA target set lower than what your actual cost per conversion is trending at for the last thirty days. The main thing is keep in mind, you're getting consistent volume, when I say volume, generally that means multiple conversions per day over the course of a month.
Corey:If you're limited volume, that means one or less conversion per day, 30 or less conversions over the course of a month. Generally, when you're at that number, you're you're somewhat limited in what you're actually getting. You know, one conversion per day is not volume, but two to three to four leads per day is volume that is more predictable. And, you know, on a Monday, Tuesday, Wednesday, I can say, okay, we drove eight leads. We we spent, you know, $500, and it costs x amount per lead for those leads that came in that.
Corey:So it's more predictable when you have that level of of numbers coming in. It's why the challenge of when you say, okay, over the last five days, we've spent $225 and we've driven two conversions and we're just not quite getting enough data. You know, we're not getting enough volume to actually optimize. So basically long way of saying, if you're interested in more volume, I would increase my CPA target. If you're like, I'm comfortable spending a cost per conversion up to $125 that is usually when I would say, I'm gonna set my CPA target up to basically 125.
Corey:Maybe I'd go up to even 150 to kind of open up my campaign a little bit. As you increase that CPA target, basically you're giving Google more ability to actually spend your budget, bid more aggressively. You're gonna enter more auctions. So finding out what the right CPA target is, is really a balancing act. It's a balancing act of determining how many leads do we really want every month.
Corey:So I have a few clients that are like, we want volume. Those clients, I set their target CPA higher than what the actual cost per conversion ends up being. So cost per conversion might be $60 at the end of the month. Our target CPAs are set to like a 125. Why?
Corey:Basically, I don't want Google to stop spending because they are not confident that they can drive me an additional conversion or two in a single day. So I wanna leave those flood gates kind of open where my budgets are set very high, my bids are set very high. And basically I'm just looking within the actual campaign itself to make sure my targeting looks good, make sure my landing pages are converting. So that's kind of the way that I like to handle that situation. For a client who's very cost per conversion focused, like it needs to be under $50 for example, to use our same example.
Corey:Basically I'm setting my CPA targets lower and I'm more comfortable with understanding that, hey. We may only get 50 leads at the end of the month. We may only spend, you know, $3,000 or whatever it might be over the course of a month, but we're gonna have more consistence. More consistency in terms of we're getting two leads per day are coming in and we're paying x amount per two leads. So those are kind of the two scenarios.
Corey:The scenario where this doesn't work is when budget is too low, target CPAs are set like way too low and cost per click is way too high and you're just not really giving yourself enough data to actually optimize. So if you're not getting really, I mean Google Ads, the guideline is 15 conversions in a thirty day period. To me, 30 conversions in a thirty day period is truly what you want. More conversion data, especially if it's good qualified lead conversion data, the better. So if you're getting leads from your ads and let's just say you get like seven or eight leads a month and seven or eight conversions a month, you're really gonna struggle to use smart bidding strategies effectively because they're really based on data.
Corey:So that's kind of why I talk about volume and data a lot is you need to feed the Google Ads beast with data and if you don't have enough, you're kind of treading water at times. So that is going to answer that question. If you have a $50 CPA target, 75 cost per conversion, what's the best way to handle it? Basically, your CPA target if you're looking for more volume, if you're comfortable spending more per conversion, if you're looking to spend more of your advertising dollars. Obviously, nobody wants to spend more advertising dollars, but that leads to sales, it leads to revenue, it leads to clients, it leads to customers.
Corey:So if you're a little bit more cost focused, keep that CPA target low, consider using a port CPC bidding target. If you're consistently spending, you know, and doing pretty well over the course of a month, where for the most part you're hitting that $50 cost per conversion, Sometimes a thirty day, you know, you might have a stretch that's a little bit slower than another stretch. You know, one month it's $50 cost per conversion, one month it's 75, one month it's 45, one month it's 62. You know, it's kind of gonna bounce around like that. You wanna keep it lower, you gotta keep bringing down your CPA target.
Corey:But if your cost per click is like $20.30, dollars 40, you're not gonna be able to drive leads for really cheap costs. Roofers, I'm spending $30.40 a click. A roofer comes to me and says, I need 40 or $50 leads, they're gonna say it's impossible. Like there's just no way to do it using Google Ads under the current, you know, the way it's currently set up. So that is how I would handle CPA targets.
Corey:So next up, we are going to answer a question, a pretty common one that I get is
Question 2:How do I know when I have enough conversion data to switch to maximize conversions or target CPA? What is the minimum number of conversions I need to switch effectively?
Corey:When how do I know when to switch? I'm currently using maximized clicks bidding. We have conversion data coming into the account. At what point do I know that I can switch to maximized conversions bidding? And this is a really great question.
Corey:For me, my answer is generally switch as quickly as possible. I think the ultimate goal is to get to using smart bidding strategies because they're taking into account so many different data points that maximize clicks is not taking into account, that manual CPC will not take into account. So to me, as quickly as possible, get to maximize conversions. What is that threshold? If I have, let's just say I'm running my ads and over the five day stretch, I'm able to drive five conversions.
Corey:Let's just say though that exact number, five day stretch, five conversions. I am literally switching to maximize conversions and seeing if my campaign continues to spend. So my general process with this is when you first get started with a brand new account, a lot of times maximize conversions is just not going to run. There's no conversion data in the account for Google to maximize your conversions. So what I usually do is set up my conversion tracking and then I'm either using maximize clicks with exact match keywords, or I'm using manual CPC with phrase match keywords.
Corey:I don't know that there is a singular right answer for this, and I think it varies based on what you're actually targeting. But for me, I would say if I had to pick one, I'd probably go maximize clicks exact match, but I I kind of go all over the place with this. Like, I've tested broad match at times to start just to get search term data in for a client that wanted to spend more and spend quickly. So if you're willing to spend more, willing to spend a little bit quicker and open to, there's gonna be a little bit of an investment and a little bit of waste as we launch. So broad match keywords with manual CPC is not the end of the world either using that.
Corey:It's just one of those things like you really have to watch it and if you're using broad match keywords, you really wanna use a limited set of keywords. So basically for me, the way that I determine when it is time to switch is usually like seven conversions in a, you know, generally in that box. So when I first launch, and it it depends on the client. Sometimes this data comes in very quickly if they're spending a lot. I did this recently, and for a small spending client, which is when this is really a challenge, they have a $2,000 monthly budget.
Corey:It is a family friend who wants to run ads. $2,000 monthly budget, which isn't a bad budget, honestly. It's just for their industry, the average budget is probably, you know, 10 to 50,000. So they are a national company. They provide a a national service.
Corey:I don't wanna get too deep into the details, but average cost per click for this service is around, I would say $20 I had ran their ads several years ago and it was around 11 to $15 at the time. I remember our cost per click a lot of times is $11 Now it is probably around 18 to 22. So our costs have increased, costs have doubled per click in this industry really without me doing anything. No matter what I do, that's what the cost is. So for this client, I ended up getting, I think we ended up having about five conversions come in, lead forms come in, not overly ideal in terms of costs.
Corey:I mean, our cost per lead probably spend about 1,000 to get five lead forms in. Now people are gonna be like, that's terrible, but it's $20 a click. So you're really only getting a limited chances of clicks and it's not like they are a national leader. This is manual bidding with no conversion data. So explaining to the client, hey, it's gonna take a little bit while to get this going, but once we do, we should be able to kind of get more consistent results.
Corey:Basically, once I had those initial conversions come in, for me the number is generally in that five, six, seven, eight. If I'm getting more in a shorter time period, then I'm definitely more open to switching to maximize conversions quicker. If you run ads for a thirty day period, you get like five conversions, you're kind of in that in between point. Like really just consider that 15 conversions in the thirty day threshold. But if you have a ten day period where you've driven 10 leads and your lead quality is looking good, that's coming in, then you're in really good shape, just switch to maximize conversions.
Corey:And then from there, I'll usually run maximize conversions for, let's say a month, you know, a couple weeks to a month. It just depends on how those results look. And then from there, that's when I usually start to set a target CPA or a target return on ad spend depending on what the actual costs are looking like and the return is looking like. So that's kind of my overall process with everything. I would say the threshold you're looking for is can you get seven conversions in one week?
Corey:Can you get, let's just say seven conversions in two weeks? Like if you can hit kind of those around those numbers, it's a lot easier to kind of make that switch to maximize conversions. If you get your first two, three, four conversions, I'm still like, let's use manual bidding for a little bit longer. Really pay close attention to your search terms, your landing page traffic that's coming in, like really pay close attention to all of those things as much as you can. And from there, that's usually I'm making the switch to maximize conversion.
Corey:Once I kind of reach that, let's say seven conversions in ten days, seven conversions in fifteen days is kind of the numbers I'm looking for. If you run for a full month, you know, really hitting that conversion threshold, probably having at least 10 helps. So answering our two questions today about bidding, basically, when do we switch to maximize conversions and how do we know what the right CPA target is to use? A lot of it is testing CPA targets, set them higher to bid more aggressively, set them lower to be more efficient and always focus on what's actually happening within your campaign and have an understanding of if you start trying to become a little bit more efficient, it could come at the cost of your competitors getting leads that potentially you would have gotten if you were bidding a little bit more aggressive. That will wrap up episode three of the Surfside PPC Podcast.
Corey:Again, go to surfsideppc.com to ask your questions, to join my Patreon, to join my Surfside PPC premium and get all the information you need to get about Google Ads. There'll be a lot of good content coming out this year, a lot of premium content and obviously you can ask your questions if you join there. So thanks for listening and I'll see you on the next episode.
