Are you considering changing your AdWords bids but are worried about making the wrong choice? Wondering what would happen if you increased your bid from, say $1 to $1.20, and what difference it would make?

Adjusting bids based on traffic and conversion patterns is essential to optimizing your PPC campaigns, and all successful advertisers modify their Max CPCs regularly to reach their goals. AdWords has for some time now provided data on the impact of bid changes on impressions and clicks, but what anyone tracking conversions really wants to know is what the impact will be on sales or leads. AdWords advertisers can now make some more educated guesses using Google’s updated bid simulator.

How The Bid Simulator Works

The bid simulator works with your Search campaigns only by analyzing data over the past 7 days, taking into account information like your competitors’ bids and traffic you received. It then estimates how results might have differed if you used a lower or a higher bid. For example, you can estimate how many more clicks and conversions you might have received if your bid was 10% higher. If you track conversion values, the tool will also include that metric.

If your campaigns are limited by budget, the tool will not be available and it will also not work with auto bidding or Conversion Optimizer (CPA Bidding).

How To Use The Bid Simulator

You can find the bid simulator at the ad group or at the keyword level. In your AdWords account, go to your Campaigns tab and navigate to an ad group. Hover over the Bid Simulator graph icon below your Max CPC bid and click on it to bring up the tool and explore the different bid options.

Google will provide some metrics based on a variety of Max CPCs you could choose, or you can enter a different Max CPC you are considering by clicking on Use a different bid.

Compare the current bid metrics to what your results would look like if you used a different bid and decide if the change in bid makes sense for you. For example, if after increasing the bd, the cost would go up significantly without a high enough change in conversions or conversion value, you might want to leave the current bid as is.

Keep in mind that the estimates you are seeing are just estimates and future results will vary, as search patterns are constantly changing and do vary week over week. Your competition is likely changing their bids as well on an ongoing basis.

Make sure to explore the available data when considering changes to your campaigns. If you do adjust bids, continue to monitor your conversion numbers, especially budget and ad spend if you increased your bids significantly.