Driving “Profit Maximization” in your PPC Bid Optimization Strategy

As a digital marketer, you might find yourself wishing your PPC bid optimization strategy could always maximize profit margins. Not so you can kick up your feet and watch the money flow in, but because you’ve considered it a potentially meaningful strategy—similar to why you would set revenue maximizing goals with a Return on Ad Spend (ROAS) efficiency constraint. The only way you can know is by constantly testing what’s possible.

Paid search bidding optimization is best done by bidding using your conversions or revenue data to inform the model. Obviously this leads you—or your algorithmic decision engine—to make bid choices that are directly informed by the results you want. But which one is best: revenue or conversions? Well, it depends on your targets and goals, what data is available, and what type of business you run. However, revenue-based goals tend to be the most powerful in driving business results if the data is there. And they are especially powerful (and necessary) if you want to focus on profits primarily in your paid search strategy.

PPC optimization tools have already done a lot to evolve paid search as a marketing channel, and one of the next steps will be to automatically optimize bids against a goal of driving maximum profit from each individual keyword. The availability of this strategy is not seen in many tools, but it’s a very powerful way to transform your SEM program into one that consistently drives peak performance. The bidding strategy is enabled because of value estimation, modeling, and calculation all executed on each individual keyword.

That said, you also need good revenue data. The more accurate your revenue data applied to your keywords, the greater the possibility of getting the best margin results from your SEM program. How? You’ll need clean, organized data and thorough integrations—even to your offline revenue, latent conversions, or LTV stored in CRM or third party database. That revenue data is imperative to driving profit focused PPC optimization.

As the ancient Greek adage goes, “change is the only constant,” and that especially applies to the digital landscape for marketers today. The only way to keep up in this fast-paced and rapidly evolving industry is by continually testing and constant iteration. Adopting a new strategy or technology might seem like a risk, but these steps are often required to become more profitable and take your SEM program to the next level.