Hey Guys! Ever wonder how to determine your initial default bid? Should it be $0.75, $1.00, $1.50??? Does it even matter? KW bids play an important role in shaping your overall PPC performance, so yes, it matters! Well, there's a cool way to more accurately determine a good default KW bid. To do this, you'll need to know your conversion rate, selling price and target ACoS. For example, let's say you are selling a $20 product and have a target ACoS of 30% with a 10% conversion rate. First, determine your max spend, per KW, by multiplying your selling price by your target ACoS ($20 X 0.3 = $6). This tells you the max amount of spend ($6), per KW, to hit your target ACoS (30%). Now, you need to factor in your conversion rate. This is done by multiplying your conversion rate by your total spend to get your suggested initial max KW bid (0.1 X $6 = $0.60). This gives you a good starting bid to use to hit your ACoS goals. Make sure to monitor impressions along the way as $0.60 won't get you far in some markets. Of course, bids, CPC and ACoS will vary by KW, match type, etc., but this is a good rule to follow when starting out. This also clearly demonstrates that it can be very hard to compete with low priced, high competition products. HAPPY BIDDING!
David Goldstrohm is the owner of PL Prominence, an expert listing and PPC optimization service for Amazon sellers.