An advertiser looking to drive conversions is using manual cost–per–click (CPC) bidding. Which factor should be most important for this advertiser when deciding keyword bids?
- The profit derived from a paid click
- The bids of the next closest advertiser
- The average profit per conversion
- The Quality Score of the keyword
Conversion in given situation is a “goal”. And click doesn’t mean conversion. As an advertiser is using CPC bidding the main factor should be a value (profit) of paid click.
Once the maximum number of CPC amounts has been set, it is important to check how many clicks the company’s ads might begin to accrue. It is also important to check if these clicks are leading to any business results on the company’s website. It is also important to remember that there is a constant change in the Internet traffic. Therefore, the CPC bids should be re-evaluated regularly.
How do you know what CPC to set? You can figure this out based on what you know about your business and the value of a sale. For example, if you sell US$5,000 diamond rings, one new customer is probably worth more than if you sell US$0.99 packs of gum.
Once you’ve set max. CPC amounts that you’re comfortable with, see how many clicks your ads begin to accrue, and whether those clicks lead to business results on your website. Also, remember that Internet traffic is always changing, so it’s important to re-evaluate your CPC bids regularly.
Read more here: https://support.google.com/adwords/answer/2464960?hl=en