What is a Keyword Bid?

Internet marketers who use pay per click advertising buy online ads using a keyword bid. Sellers bid on specific search terms or phrases that web surfers enter into search engines, like Google™ and Yahoo!. When a marketer submits a winning bid, an ad will be listed in the sponsored links section of the search engine results page for that keyword.
Sponsored ads are given premium space on a web page, which helps ensure that the user sees the ads. There is no guarantee that the web surfer will click on any given ad, however. The Internet marketer is charged the bid price only when a user clicks on a link in the ad.

All ads must be relevant to the keyword search term. For example, a person bidding on the phrase popular shoes should run an ad selling shoes, or something related to shoes. Search engines approve each ad to help ensure that all links are relevant to the keyword bid. It is possible for an online merchant to be banned from participating in pay per click advertising programs for repeatedly breaking this guideline.

An online merchant can research the projected value of a search term or phrase prior to placing a keyword bid. Many pay per click advertisers judge the keyword value based on the number of people searching for a specific term. Popular terms generally require high keyword bids, due to competing advertisers and web pages fighting for top positioning on a search results page.

Using a keyword bid tool can automate the bidding process and save the marketer time and effort. Keyword buyers can input maximums for each keyword bid, and the highest amount to be spent on a keyword each day. The software will automatically stop bidding when either of these daily thresholds has been reached.

If an online seller is using a hundreds or thousands of keywords, tracking and bid management can become difficult and time consuming. Automated tracking through bid management software is available. Users download each keyword bid into the software then input the number of clicks and resulting sales.

The software then calculates which keyword bids were the most profitable. Many software options work with several different pay per click advertising sites simultaneously. This makes it easy to combine and track all keyword bid results. Advertisers can then easily update a keyword bid for all search engines.
Pay per click advertising is highly targeted, but can also be very costly. Website owners can include keywords in their metatags, site descriptions, and in their web page text to increase organic search results instead. Banner advertising and email campaigns can also be used in place of pay per click advertising.