October 27th, 2009

Bid Simulator Formulas

Never heard of the incremental CPC? Neither had I until reading into the topic of the bid simulator.

 To explain further: The incremental CPC is how much extra you are paying, on average, for the extra clicks you are getting from your higher bid.

To accumulate, the incremented cost per click (ICC) is the cost of incremented clicks divided by number of incremented clicks.

The Value Per click is how much a click for a particular keyword is worth to you, on average.

To accumulate the value per click, multiply the average maximum profitable Cost Per Acquisition by the average conversion rate.

Therefore, using these calculations, the bid simulator lets you see the estimated number of clicks and the total costs of those clicks from various bid levels.

For further explanation, please use the following link:

http://www.youtube.com/watch?v=jRx7AMb6rZ0