How to Set the Optimum Bid for Maximum Profitability
Native ads at a Cost Per Click (CPC) of just $0.01–sounds incredible, doesn’t it? Are you wondering if you can get super cheap advertising? Yes, it’s actually possible. By making the tweaks, you might just end up paying just one cent for every click you get on native advertising editorials. But, does it make sense to set the bid so low? Read ahead for more information on when low bids make sense and how they can affect your marketing campaigns.
You’ll Set the Maximum CPC Bids by Contacting the Platforms
When running native advertising campaigns, you’ll set the maximum CPC you’re willing to or can pay. This you can do by contacting the platform, such as Outbrain or Taboola, and informing them. You do have the option of using their algorithm, but the option for manual bidding is also available. So, what happens when you set the bid at $0.01? Let’s try a few examples.
If you’re running an ad campaign in specific countries like India or Pakistan, you can set the bid for $0.01 per click. And that might work perfectly well for you. While this bid may sound super cheap, you’ll want to proceed with caution when advertising in countries like the USA. Selecting the lowest bid doesn’t always make sense because the one-cent click is unlikely to get any results. You’re targeting different types of GEOs, bids, and competitors in the US, and you’ll set bids accordingly.
As expert advertisers will inform you, the US is the largest market for native ads annually. With close to 50% of the international ad spends, you can’t set the bid at $0.01 and expect results. Especially when you run performance campaigns, you’ll need to work out your bids accordingly.
You’ll Set Bids According to Your End Goals
One of the first questions marketers ask is where they can purchase the cheapest traffic. Before you figure that out, you’ll start by identifying your end goals. If you’re looking to earn an Arbitrage income, you’ll purchase the cheapest traffic available. However, the game changes entirely if your goal is to run performance campaigns and get traffic for your eCommerce website. Setting your bid at the lowest possible level may not be advisable. That’s because low bids are unlikely to translate into conversions or sales.
Be Mindful of Only Attracting Trash Traffic
You could go with cheap clicks if you’re running an Arbitrage game using Google AdSense on a website. However, be mindful that it will influence your AdSense account quality. That’s because Google AdSense will likely ban you for purchasing the cheapest clicks out there. Then again, the cheapest traffic is also what advertisers call “trash” traffic that is essentially worthless. Trash traffic is website visitors who are unlikely to place orders because of irrelevant ads or incorrect targeting.
If you intend to run performance campaigns and get good-quality leads, cheap traffic is not advisable. Asking your Taboola or Outbrain rep what should be the bid per click may not be a good thing to do. You'll know your break-even point when you’re running an eCommerce company. Or when the campaign starts to get profitable. You’ll keep a close watch on these numbers. That’s because the cheapest traffic has no value for you if it isn’t converting. But, higher-value traffic is more likely to convert into actual sales and raise your profit levels.
Stay Focused on Your Break-Even Point
Ultimately, you’ll focus on the Cost Per Acquisition (CPA) at which you break even. Or the level at which your campaigns become profitable. At this point, you can start crunching the numbers again. You’ll account for factors like:
- Cost Per Click (CPC)
- Click Through Rates (CTR)
- Costs of creating the editorials and offer page
- Offer itself or price
- Shipping costs
All of these aspects influence your calculations for the maximum CPC you should bid for.
Timing Plays a Crucial Role
Savvy advertisers also account for the time of the year. For instance, when running campaigns in November, just before Black Friday, the CPCs are through the roof. However, that is not a cause for concern because your conversions are also likely to be higher. You’ll likely finalize more sales around this time than you would in, say, April. Around Black Friday, you’ll see higher CPCs and higher CPMs, but also much higher conversions.
Essentially, you needn’t worry a whole lot about the higher CPCs during the Holiday season. Of course, you can play around with lower CPCs, but it makes sense to do that only on large campaigns. Or when you’re optimizing the final stages of the campaigns. You’ll leverage editorials customized for the Holiday season with slick, compelling content, images, and headlines.
Platforms Like Taboola and Outbrain Have Algorithms
When calculating CPCs on platforms like Taboola and Outbrain, remember that they have algorithms. You’ll set up a basic bid, and the algorithm changes the bid automatically, raising it up or down within a preset percentage limit. That’s because platforms like Taboola and Outbrain gather much more data behind the scenes than is available on the surface. They use tracking pixels or marketing pixels, which are a 1×1 pixel graphic.
This graphic tracks the user’s behavior and movement through the funnel. It can identify conversions and traffic on the website and perform other functions similar to a cookie. AI-driven tracking pixels can deliver much better decisions than humans. They can work to your advantage because when you’re running performance campaigns for an eCommerce store, you’re looking for good quality leads.
Smart Bid Campaigns vs. Fully Automated Bid Campaigns vs. Manual Bids
When setting the maximum bids, you can run a smart bid or a fully automated bid campaign. Though, it could be more advisable to use the manual bidding process and set it as low as possible. Finding that sweet spot between trash traffic and super expensive traffic is like navigating a thin area. And, you may have to play around a little. At Purple Black, we have perfected the technique of running super-cheap ads. We have developed a fair understanding of the sweet spot thanks to the data we have collected.
While we can estimate optimum bids, it’s hard to predict with certainty. What we can do is conduct extensive testing to ascertain what happens each time we raise or lower the bid. And, how the numbers crunch. So, yes. Most of the work we do is about analyzing data at every step of the funnel. We must not just search for the cheapest CPCs, but we must also understand the data and KPIs.
Working out the optimum CPC to stay on top of your break-even point and ensure you get conversions is an intricate process. Even the experts must work extra hard to get it right. So, rely on the folks at Purple Black to get you there. Contact us here for your free consultation, and let’s get started.
