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Launching a new search advertising campaign requires a lot of research and planning. How do you know what to bid? How much traffic should you expect from a specific keyword? Microsoft Advertising has tools to help you strategise appropriate bids, estimate the change a bid estimate would make on your campaign’s traffic and understand your actual cost.

After reading this Study Guide, you will understand how to:

  • Take advantage of the Microsoft Advertising Intelligence keyword planner tool.
  • Analyse your traffic estimates.
  • Optimise your campaign using specific bid strategies.
  • Learn how to improve your cost per click (CPC).
  • Eliminate low conversion rates (CVR).

Creating Bids

The heart of online advertising is matching relevant ads with potential customers. Bids are just one of several factors that affect your ad’s position. Along with bids, keyword relevance and quality score are critical variables that determine ad rank. However, fully understanding PPC bidding is important because it is possible to overpay for performance when trying to display your ad in the mainline (A) and sidebar (B) locations.

When creating your bids, keep in mind:

  • Your keyword bid is the maximum price you are willing to pay each time your ad is clicked. Your actual cost may be much lower.
  • Your budget affects the number of times your ad can be clicked in a given day or month.
  • Keyword bids are not static. It’s good practice to constantly review and adjust your keyword bids based on actual results as well as estimated results.

Microsoft Advertising Intelligence: Keyword planner tool

Keyword Planner

Bid landscape

Bid landscape helps estimate the effect a bid change will have on your campaign. Bid landscape provides a range of bids for a keyword, along with the estimated impressions and clicks those bids might bring for that keyword. If you see a bid that gives the performance you’re looking for, you can then change your bid within Bid landscape.

Bid landscape is only available if there is sufficient impression and click data for your keywords. If there is data available, a small graph will appear next to each of your bids on the Keywords or Ad groups tabs. To view the Bid landscape estimates:

On the Keywords or Ad groups tab, click on the graph icon next to the current bid you want to review. To change your bid, select an option from the Bid column or enter an amount in Other bid and click Save.

At the ad group level, you can choose to change all of your keyword bids or you can update only your ad group bid and leave your individual keyword bids unchanged.

*It is important to remember that Microsoft Advertising Intelligence keyword planning tool is a free download that you can use to build, expand and optimise suggested keyword lists and bid estimates using familiar Excel. With it, you can:

  • Build lists of up to 200,000 generated keyword lists.
  • Create original keyword research templates that let you analyse data for your business.
  • Discover bid estimation data in a simple spreadsheet.

CPC Bid Strategies

Enhanced CPC (cost per click) is the default bid strategy setting when you create a new campaign. With Enhanced CPC, you set your ad group and keyword bids, and Microsoft Advertising automatically adjusts your bids in real time to increase your chances for a conversion. Your bid may be increased for searches that are more likely to convert and up to 100% lower on searches less likely to convert (up or down, this change will be made after we apply any bid adjustments you have set).

Comparing bid strategies:

Bid strategy

Do I set bids myself?

Do I need UET Conversion Tracking?




Enhanced CPC



Maximise Clicks



Maximise Conversions



Target CPA




Manual CPC (cost per click): You set your ad group and keyword bids, and Microsoft Advertising uses these bids every time. This is every campaign's default bid strategy. To switch the default Manual CPC strategy to Enhanced CPC, click on the Settings tab from the Campaign page. Under Bid strategy, choose Enhanced CPC: Adjust my bid to get more conversions.

Enhanced CPC (cost per click): You set your ad group and keyword bids, and Microsoft Advertising automatically adjusts your bids in real time to increase your chances for a conversion. Your bid will go up to 30% higher on searches that are more likely to convert and up to 100% lower on searches less likely to convert. (This change will be applied after you set your bid adjustments.)

Maximise Clicks: Microsoft Advertising automatically sets your bids in real time to get as many clicks as possible within your budget. If you want greater control over your bids while using Maximise Clicks, you can also set a maximum CPC (cost per click). This is an optional limit you can set to make sure that Microsoft Advertising never pays more than a certain amount for each individual click.

Remember, you can improve your cost per click (CPC) to get a lower cost per action (CPA) by considering bids, ad copy and much more. For example, you can lower your bids to your break-even CPC, especially for your top 10 percent of keywords or placements. (Your break-even CPC is your gross profit multiplied by your conversions per click.)

You can improve your click-through rate with better ad copy for all ad groups with break-even CPCs. Last, you can use all ad extensions possible. Pause poor-performing ads, test new ones using tools like Boost Media or AdAlysis, and don’t forget to look at your Quality Score.

Eliminate low conversion rates (CVR)

Cost per action is driven by CPCs and conversion rate. The number of leads you get is your budget divided by your cost per action (CPA), which is made up of your cost per click and conversion rate. Here are some ways to eliminate low conversation rates:

1. Exclude poor performing keywords, placements and audiences
  • Run a search term report and add negatives keywords
  • For RLSAs, exclude audiences with -100 percent incremental bid
  • Check mobile performance, and if poor, consider negative incremental bid
2. Get serious about test landing pages. Consider these 10 elements:
  • Logo (who are you?)
  • Headline
  • Call to Action
  • Confidence signals
  • Offer
  • Contact information
  • Persuasive copy
  • Product evaluation information
  • Product presentation
  • Basic template elements
3. Improve targeting
  • Pull multiple dimensions reports by geography, device, search network, audience, time of day and day of week, and find segments that are not working

Automated rules and bids

Most common bidding, budgeting and campaign planning tasks that advertisers big and small perform align well with Microsoft Advertising Automated rules. The ability to schedule keyword bid adjustments and campaign operations on a daily, weekly and monthly basis can amount to invaluable time savings and efficiency gains.

Examples of common automated rules and bids

  1. Start and stop your campaigns for special events
Want to display ads for a limited-time-only sale without getting up at midnight to enable that special-event campaign? You can enable the campaign through an automated rule. You can also create a second rule to stop the campaign at the end of the day.
Before creating the rules, you need to create your special-event campaign, complete with keywords and ads. Set that campaign to Paused. Once you have got your campaign ready, create the first rule to start the campaign and the second rule to pause it again at the end of the day.
  1. Avoid costs on poor performing keywords or ads.
Sometimes certain ads or keywords just don't work out. Maybe your ad is getting lots of impressions but no clicks, or you are getting clicks but no conversions. That's costing you money you don't need to spend.
  1. Keep your ads on the first page

If you have got some keywords and ads that are performing well and want to make sure they are consistently seen by as many searchers as possible, try this:

Click Campaigns at the top of the page, then click the Keywords tab. Click Automate and select Increase to estimated top of page bid when....
Set the following:

  • Apply to: All enabled ads in all campaigns
  • Do this: Increase to estimated top of page bid
  • Optional: Check max bid and enter a maximum bid you are comfortable with.
  • When: Avg. pos. > 4
  • How often: Daily, 7 AM, using data from Previous day
  • Email results: Only if there are changes or errors
  1. Avoid letting your budget stop your best performing campaigns

It's your best-performing campaign: Clicks are high and so are conversions. Then suddenly all the clicks stop. What happened? It might be as simple as running out of budget. Now you are losing customers because your ads have stopped displaying. You can automatically increase your budget for that star campaign.

Actual Cost

The bid amount is deducted from your campaign budget each time your ad is clicked. The actual cost for each keyword or placement varies depending on the following:

Your bid on a keyword or placement. Your keyword or placement bid is the maximum amount you can be charged when your ad is clicked. Learn more about PPC bidding in Set your campaign budget and bid amounts.

Incremental bids to target customers by time of day, gender or other targeting criteria. When one or more of your target criteria is met and your ad is clicked, you also pay the amount of your corresponding incremental bids. Thus, incremental bids can increase the cost of your default and custom bids. Learn about targeting and incremental bids in How to target my customers by adjusting my bids.

Inline opportunities

Use inline opportunities on the Campaigns tab to see and apply keyword and bid suggestions, which can help boost impressions and clicks as well as improve ROI. Inline opportunities come from the Opportunities tab. Learn how to Use Microsoft Advertising Opportunities for ideas to improve your campaign.

Click Campaigns at the top of the page. Click the Campaigns tab. In the Delivery column, if the status is ‘Eligible’ and there is an inline opportunity, you will see a light bulb icon.

Inline opportunities icon

Click the light bulb icon and review the inline opportunities.

On the Opportunities page, you will see several suggestions for improving the performance of your campaign. Here is an example of what your Opportunities page might look like:

Inline opportunities icon

You can click any of the View Opportunities buttons to see suggestions in either a Simple View, which is the default view, or an Advanced View, which gives you a more detailed, tabular way to review, apply and dismiss opportunities. 

Inline opportunities icon

The suggestions you receive can include some from this list and more:

  • Add new keywords
  • Add broad match to your existing keywords
  • Add broad match modifier keywords
  • Increase your bids to move your ads to mainline
  • Increase your bids to move your ads to best position
  • Increase your bids to move your ads to first page
  • Increase your bids to show your ads more often than other advertisers' ads
  • Lower your bids to increase clicks
  • Increase your budget

Traffic status by location

You can use the Geographic report to find out how your ads are doing in different locations, which can help you decide where to focus more of your advertising efforts. With the ‘Location type’ and ‘Most specific location’ columns, you can view which location type – ‘Physical location’ or ‘Location of interest’ – was used to serve your ads.

Read more about how to read the report and understand the data.

To create a Geographic report, click Reports. If not already expanded, click Standard reports. Click Targeting, and then click Geographic. Select the unit of time (Show (unit of time)), Date range and the download Format you want.

Optionally, you can do one or more of the following:

  • Set your report to include all accounts (the default) or select Specific accounts, campaigns and ad groups, and then choose the items you want.
  • Click Choose your columns to select or remove attributes and performance statistics for the report.
  • Click Filter to display specific types of data in your report.
  • Click My report settings to save the report as a custom report or schedule the report to run at a certain time.

Click Run to run the report or Download to download the report as a CSV or TSV file.

Note: You can also create a Geographical location report from the Dimensions tab. On the Campaigns pages, click the Dimensions tab, and then next to Show, click Geographical location.

Understanding your traffic estimates

After using the PPC estimator, and seeing the estimates related to keyword performances and cost, you might wonder why you are seeing certain figures. Here are some reasons that can impact how your traffic estimates display.

  • Limited by budget: You may sometimes see a shaded area in the graph. This means that our PPC traffic estimator evaluated your budget and indicated that it is too low to accommodate all the clicks and impressions available for your keywords for the shaded bids. You may also see the line in the graph curving down. This means that the estimated number of clicks your keywords might get are decreasing as your bid increases.

To get more clicks and impressions, try adjusting your PPC bidding strategy and increasing your daily budget. By increasing your budget, your ads may get more clicks and impressions. You can also try to lower your bid, as it might reduce the average amount you pay when your ad gets clicked and help your budget go further to get more clicks.

  • Estimates are not available in the tables: If you haven’t entered a bid and daily budget (optional), you will see dashes ‘-’ in the table. Enter Bid amount and Daily budget (optional) above the graph and click Get estimates to view the weekly estimates.

If you see a dash '-' instead of a number in the Avg. Position column, our PPC traffic estimator determined that your ad will probably not get any impressions. Historical ad performance for your ad and other ads using similar keywords are used to calculate the average position. Usually, you will see a dash when different factors like your bid or click-through rates are not sufficient to earn an ad position. Try to adjust your PPC bidding strategy and increase your bid amount to get an average position estimate.


As an advertiser, you want your ad to display at or near the top of the search results page. Optimal keyword bids are critical for achieving a high rank while not overpaying. Microsoft Advertising provides tools that allow you to analyse estimated results, develop a CPC strategy and apply informed keyword bids. As you work with your bidding strategy, remember these key points:

  • Use the bid and traffic estimation tools to help you place optimal bids.
  • Compare bid strategies to improve your CPC.
  • Use Automated bid rules to schedule keyword bid adjustments on a daily, weekly and monthly basis.
  • Use inline opportunities to update keywords and bids.
  • Use the Microsoft Advertising Intelligence keyword planning tool to build, expand and optimise suggested keyword lists.

Thanks for reading this Study Guide on bidding and traffic estimation. Continue studying or take the Microsoft Advertising Certified Professional exam to become certified.

Please note not all features in this Study Guide may be available in your market.