Will Decreasing Bids Improve Your ROAS?
Adwords CPC’s are of course set by Google’s auction. What happens though if some of the competitors in your auction withdraw, greatly reduce their budget or slow down their ad delivery? Shouldn’t you benefit from a reduction of bids even if it is only for a short time? When was the last time you thought about reducing your bids? Let’s take a look if decreasing your bids will improve ROAS.
Looking for a Better ROAS? Decrease Your Bids!
Decreasing your bids sounds like a no brainer, but you need to be careful. This is not a trivial point. In our experience if you decrease bids properly, ROAS will almost always increase. Depending on your business, the 4 or 5 positions may be much better from an ROAS perspective than a 1, 2 or 3 position. Similarly, a 3 position may perform much better than a 1 or 2 position. If you haven’t tried this lately, test it out with a few ad groups.
Keep in mind that this does not work for all accounts, especially if your account is starved for traffic. Advertisers with accounts that are spending their daily budgets and losing a large percentage of impressions to budget can greatly benefit from reducing bids. We recently had a client where we dropped their CPCs significantly and in turn significantly increased their click volume while their conversion rate remained constant. Same Budget + Same Conversion Rate + More Clicks = More Leads!
Advertising Below the Fold
If you are an advertiser who may be struggling to make the economics of Adwords work for you, try dropping your bids enough to get your ad to the bottom of the first page of paid search results. A very low CPC will almost always improve your Adwords economic performance.
Free & Bargain Offers – Run Below the Fold
If you have an offer that can’t be beat, or if you are offering bargain basement prices or something free, make sure you decrease your bids so your ad runs below the fold. Most shoppers who are searching for a bargain don’t mind scrolling!
Just think if everyone in your ad space attempted to advertise below the fold and dropped their bids together! Bids would go into free fall, especially for local advertisers. If you think this is a good idea, just send all of your competitors in your ad space a link to this blog! Maybe they will get the hint.
Best of luck!