Normalization of per keyword spend

[blaze]

I wonder if anyone has done a normalization of their keyword bids after a period of time.

By normalization, I mean first bidding a flat rate on a large number of keywords and then after a few months, tweaked it so that the CPA for each keyword was the same.

Eg:

Initial Keyword Bids

$0.50 Widget Blue
$0.50 Great Widgets
$0.50 Awesome Widgets
$0.50 Widgets for hire

After two months, the CPAs turns out to be

$5.00 Widget Blue (10 clicks / aquisition)
$2.50 Great Widgets (5)
$10.00 Awesome Widgets (20)
$1.00 Widgets for hire (2)

Let's say you want to normalize around $5 CPA. So you normalize the keyword bids on Target CPA / Clicks Per Aquisition ..

$0.50 Widget Blue
$1.00 Great Widgets
$0.25 Awesome Widgets
$2.50 Widgets for hire

Has anyone tried that? What impact have you seen on your over all revenue and profit? Did you continue to tweak? Do you see a convergence of some sort to meeting your target CPA? Have you found a more affective formula for converging on an ideal bid rate per keyword?

[blaze]

As an aside to AWA, it'd be nice if AdWords supported automated bid tweaking to converge on an ideal CPA per keyword..

[AdWordsAdvisor]

As an aside to AWA, it'd be nice if AdWords supported automated bid tweaking to converge on an ideal CPA per keyword.

An excellent idea blaze, which I'll certainly pass on later in the week.

Thanks!

AWA

[marek]

Blaze, we do something like that. We use AdWords conversion tracking and we aim for a specific average cost per conversion for a whole campaingn. That means we usually have to lower some bids here and increase another ones there. Most often we do it on per ad group basis, not per keyword, but sometimes we create separate ad groups just for a couple of most expensive keywords, so we can manage them more efficiently.

[Robsp]

We do the same thing at the campaign level. Typically steering at a specific CPA and playing with conversions and bids to reach that.

I like your idea but it is kinda difficult to do if you run 25 campaigns with 10's of thousands of keywords. You would have to automate it.

[blaze]

It's actually not that hard to automate if you manage everything with a spreadsheet.

Fortunately, AdWords makes it pretty easy to manage everything with spreadsheets.

[vibgyor79]

I had put this in my Google AdWords wishlist way back in March.
[webmasterworld.com...]

[blaze]

yeah, it would be nice functionality.

It would be even better if Google could do it on a (keyword phrase, location, time) tuple.

Eg: if I broad matched on "blue widgets" and it found that "great blue widgets" converted at a CPA of $1 at aol in canada at 3am then at 3am on aol in canada it would increase the bid rate by five times (assuming I'm targetting a 5$ CPA)

Obviously, PPC engines will never be able to compete on price when it comes to PPC advertising.

What they will be able to to is compete on reach and how well they convert, and so therefore I believe that functionality like this is only real future for an increase in added revenue for PPC search engines.