Keyword Bidding: What Every Business Needs to Know
A decision framework for whether keyword bidding on Overture or Google AdWords makes sense for your business right now, and how to size a first budget.
Keyword bidding, paying for placement in search results through an auction rather than a flat rate, is available to any business now, through Overture or Google’s newer cost-per-click option launched earlier this year. The question worth answering before you start isn’t how to bid. It’s whether you should yet.
Do you know your margin per sale?
Keyword bidding only makes sense once you know roughly how much profit a typical sale generates, because that number sets the ceiling for what you can afford to pay per click. If you don’t know your margin, spend a week figuring that out before you spend a dollar on bids. Guessing here is the single most common way businesses lose money on paid search.
Can you track a click through to a sale?
Without some way to connect a click to an eventual purchase, whether that’s a unique landing page, a dedicated phone line or a simple order-code system, you’re bidding blind. You’ll be able to see how much you spent, but not whether it worked. If you can’t set up tracking, even something basic, wait until you can.
Is there real search volume for what you sell?
Some products and services simply aren’t searched for much yet in 2002, because online buying habits are still forming category by category. Check Overture’s bid listings and WordTracker’s query data for your core terms before committing a budget. If the volume isn’t there, your money is better spent elsewhere for now.
How much competition is already bidding?
Look at what’s currently showing for your target terms. If national brands with large budgets already dominate the obvious terms, you’re better off starting with narrower, more specific phrases where the competition is thinner and the cost per click is lower, even if the volume is smaller too.
What’s your smallest viable test?
You don’t need a large budget to learn something real. A modest daily spend across a handful of tightly targeted terms, run for a few weeks, will tell you whether keyword bidding works for your business before you commit serious money. Treat the first month as a research cost, not a growth investment.
The honest answer
Keyword bidding rewards businesses that can measure and adjust quickly, and it punishes businesses that can’t. If you have a defined margin, a way to track results and enough patience to run a real test before scaling, it’s likely worth your time in 2002. If any of those pieces are missing, fix them first. The bidding itself is the easy part.
More from 2002: browse the SEO archive or see everything published this year.
