How do you determine initial bid amounts for new keywords or ad groups?

Determining initial bid amounts for new keywords or ad groups is crucial for setting a campaign up for success. Starting too high can waste budget; starting too low may result in missed opportunities or low ad visibility. Here's a structured approach to help you determine optimal starting bids for new keywords:

📊 Step 1: Understand Your Campaign Objective
Maximize Conversions: Start with a bid that will allow your ads to be competitive enough to generate traffic, then let the system optimize.

Maximize Visibility: Start with an aggressive bid to ensure your ads appear in top positions, particularly for broad or competitive keywords.

Target ROAS or CPA: If you're using Smart Bidding (like Target CPA or ROAS), the system will adjust the bid, but you'll need an initial budget to feed it. Start with a moderate bid to capture enough data for the algorithm to optimize.

🔑 Step 2: Use Google's Recommended Bid (as a Baseline)
Google Ads offers a recommended bid range for each keyword or ad group based on competition and historical data.

Why use it? Google's suggestions are grounded in auction data, so they offer a solid starting point.

Example: If Google recommends $1.50 for a keyword, you can use that as your starting bid.

⚙️ Step 3: Research Keyword Competitiveness and Search Volume
High-competition keywords (e.g., insurance, real estate) typically require higher initial bids to appear in the auction.

Check Auction Insights to understand how competitive your target keywords are.

Low-competition keywords might allow for lower initial bids.

Search Volume: Use Google Keyword Planner to assess how often your keywords are searched and adjust the bid accordingly.

High search volume = higher bid to ensure visibility

Low search volume = lower bid but be mindful of performance

📉 Step 4: Consider Cost-Per-Click (CPC) Estimates
Estimate CPC for the keyword based on your industry and keyword competitiveness.

You can use Keyword Planner to get CPC range estimates.

Example: If the average CPC for your keyword is $2.00, start your bid in the lower-to-mid range of that estimate to gauge performance before scaling.

📈 Step 5: Factor in Historical Data (if Available)
If you've run campaigns with similar keywords or ad groups before:

Look at your historical CPC data to see what bids you've used successfully in the past for similar terms.

Adjust for inflation—bids may need to be slightly higher in more competitive times (like holidays or peak shopping seasons).

For new campaigns, start with conservative bids, and let the system gather enough data to adjust bids over time.

🔄 Step 6: Leverage Smart Bidding (if applicable)
If you're using Smart Bidding (e.g., Target CPA, Target ROAS), it's still important to set a moderate initial bid.

This ensures the system has enough data to optimize performance but doesn't lead to overspending early on.

Start with a bid that meets the lower end of the range suggested by Google and allow the system to scale.

🎯 Step 7: Account for Ad Group Structure
If you're targeting niche keywords, start with lower bids as the competition might be less intense.

For broad match or high-volume keywords, start with higher bids to gain visibility.

Segment keywords into tightly themed ad groups so you can control the budget and bids better.

🧑�💻 Step 8: Test and Adjust
Monitor early performance closely (especially in the first 1–3 days).

If you're not getting impressions or clicks, increase your bid gradually (10–20% at a time).

If you're hitting your target CPA/ROAS, but you want more volume, increase bids incrementally to test responsiveness.

Use Google Ads' Bid Simulator to understand how changes in bid impact traffic and conversions.

📉 General Guidelines to Start With:
New Campaigns / Keywords: Start with bids around Google's suggested range or a bit lower if experimenting.

Competitive Keywords: Start with 10–20% above the suggested bid, especially for high-intent terms.

Low-Volume / Niche Keywords: Start at the lower end of the range, and watch performance closely before scaling.

🧠 Pro Tip: Track Early Signals
Impressions: If your ad isn't showing enough, your bid may be too low.

CTR: If the ad is showing but not getting clicks, the bid may be fine, but you may need to improve the ad copy or targeting.

Conversion Rate: If you're getting clicks but not conversions, the bid might not be the issue. Focus on landing page optimization and targeting.