If you find yourself wondering,
"What's the best way to calculate PPC bids, so I neither overbid nor underbid on a term?"
and you have three minutes to spare, here's a video for you.
- Predict the sales from each click on a given term (accounting for current daypart, seasonality, copy, matchtype, etc).
- Determine what fraction of sales you want to invest in advertising.
- Multiply those together.
- That's the upper cap on how much you can bid on that term right now, if you want to stay within your efficiency target.
Despite what I say in the video, the rocket science and secret sauce is in step 1, not in the multiplication.