Mastering Keyword Bidding: A Comprehensive Guide For Retail Businesses

Navigating the digital retail space can be challenging, with brands competing for visibility in a saturated market. With so much at stake, having a nuanced approach to keyword bidding for retail media ads is crucial. A misstep in this area can lead to invisibility, causing businesses to miss important sales opportunities. Retailers need a solution that cuts through the noise and places your products right where their customers can see them – even with the volatility of consumer search behavior and complexity of retail media platforms. 

Mastering keyword bidding is key to dominating search results and capturing attention for your products. With a data-driven approach, you can propel your retail media ads to the forefront and skyrocket sales. In this article, we dive deep into the world of keyword bidding and its importance in the retail industry.

Must Read: Retail media platform Vs Agency ads tools 

What is keyword bidding?

Keyword bidding strategically places ads at the top of search engine results pages for specific keywords to increase visibility and attract potential customers. This is achieved through a combination of the digital advertising auction model, which operates on a pay-per-click basis, and keyword targeting methods utilized by search engines.

Benefits of keyword bidding

Targeted bidding allows for more efficient use of advertising funds by targeting specific keywords or phrases relevant to your business. This ensures that your ads are seen by the most interested and potential customers when they search for related terms. Additionally, only paying when you win the bid means you can reallocate unused funds towards future bids or other advertising methods, making it a cost-effective option for reaching your target audience.

The flexibility of your maximum bid strategy allows you to adjust your advertising approach at any time, ensuring that you are always effectively reaching your target audience and competing against your competitors in search results. 

With measurable search query results, you can easily track the performance of your ads and make data-driven adjustments to continuously improve your advertising strategy and maximize ROI. Additionally, by creating synergy between ads and landing pages, potential customers are guided down the marketing funnel toward learning more about your company’s offerings. This can lead to increased conversions and overall success for your business.

Additional read: Mastering Contextual Targeting: A Definitive Guide for Ecommerce Retailers

How does keyword bidding work?

Keyword bidding is a crucial aspect of digital advertising that allows advertisers to optimize their ad placements and manage their budgets effectively. It works like a real-time auction, with advertisers setting a maximum cost per click (CPC) for the keywords they want to target. 

Additional read: Addressable Advertising: What Is It And Why Is It Important

Advertisers select the keywords they want to target and set a maximum CPC bid for each keyword on their selected retail media platform. Now when the shopper searches for the keyword on retail media network partners, the platform will hold an auction to determine which ads will appear and in what order by considering the below factors:

  • Bidding amount: The higher the advertiser’s bid, the more chances their ads will be displayed. 
  • The quality of ad’s:  The Ad platform uses advanced algorithms to determine the quality and relevance of ads. Majority of ad platforms also take into account factors such as ad copy relevance, landing page quality, and expected click-through rate (CTR) while determining the ad quality score. 
  • Competition score for keyword: As there are a lot of advertisers bidding for the ad space, the platform may consider the competitiveness for the particular keyword while deciding the bidding amount.  

Keyword bidding example: 

Let’s say that you are selling shoes on marketplaces like Amazon and you want to bid on the keyword “men’s shoes.” You could create an ad group for “women’s shoes” and then set a maximum CPC bid for the keyword.

You can also set separate bids for different product categories, brands, or even specific products while setting ads on retail media platforms. For example, you could set a higher bid for the keyword “men’s running shoes” than for the keyword “men’s formal shoes.” Or you could set a higher bid for the brand name than for the generic keyword. 

Even though the keyword bidding for retail media platforms works very similar to keyword biddings for search engines like Google Adwords. There are few major differences: 

  • Retail media platforms offer better Ads targeting as they use first party data. For example, advertisers can target their ads to people who have viewed certain products, added products to their carts, or abandoned their carts.
  • Retail media platforms also offer more bidding options than search engines. For example, advertisers can bid on keywords based on the product category, brand, or even the specific product that they are selling.

How do you bid for keywords for your paid campaign?

To ensure your paid campaigns stand out in this competitive space, here are the step-by-step process you can follow to help you excel: 

Define your campaign goals

To run a successful paid campaign, it’s important to have clear goals in mind. Are you trying to increase brand awareness, drive traffic to your website, or boost sales for a particular product? Setting SMART (specific, measurable, achievable, relevant, and time-bound) goals allows you to establish a clear direction for your campaign and measure its success effectively. Don’t jump into keyword bidding without first defining your objectives.

Research your keywords

Keyword strategy framework to follow while keyword bidding

Keyword research is the foundation of any successful paid campaign. To start, it’s important to identify keywords relevant to your business and appealing to your target audience. Tools like Google Keyword Planner can help you determine search volumes, competition levels, and estimated cost-per-click (CPC) for each keyword. Keep in mind that the ideal keyword will have a balance of high search volume and manageable competition so you can reach your audience without overspending on ad costs.

Group your keywords

Organizing your list of keywords into targeted ad groups is crucial for the success of your PPC campaign. By grouping keywords based on their relevance to your ads and user intent, you can create more tailored ad copy and landing pages, leading to a higher Quality Score and better campaign performance. Remember to keep each ad group tightly themed with closely related keywords for optimal results.

Set your bidding granularity

When setting up your Ads campaign, it’s important to have a solid bidding strategy in place. While you can set bids at the keyword level, it may be more efficient to start by setting bids at the ad group or campaign level, especially if you have many keywords. This approach makes managing it easier and can be adjusted as you gather performance data.

As your campaign progresses, pay attention to metrics such as ad visibility, click-through rates (CTR), and conversion rates. Use this information to make informed decisions about adjusting your bids for better performance and return on investment (ROI). Consider using a keyword bidding tool that employs machine learning and algorithms to streamline and improve the bidding process, ensuring that you remain competitive while making the most of the ad budget.

Optimize bidding based on performance

Constantly evolving, the digital landscape requires a dynamic approach to keyword bidding. Don’t just set it and forget it – regularly review your campaign performance, stay updated on industry trends, and be ready to adapt your strategies to maintain a competitive edge. Embracing continuous optimization is key to driving sustained success and profitability in your paid campaigns, ensuring they align with your business goals and market dynamics.

Best practices for keyword bidding

When it comes to digital advertising, effective keyword bidding is crucial for achieving optimal ad placement and maximizing ROI. To help you improve your keyword bidding strategies, here are the best practices you can follow. By following these tips, you can increase your chances of success and see a greater return on your advertising investment.

Bid on branded keywords

Don’t underestimate the power of your brand and branded keywords. These terms are low-cost, have less competition, and result in higher conversion rates compared to non-branded terms. Ignoring them means missing out on potential revenue. People searching for your brand are often ready to purchase, making it easier for you to close sales through targeted advertising. Leverage this advantage for swift conversions and increased revenue.

Don't underestimate your competitors

To effectively outperform your competition, knowing who they are and understanding their marketing strategies is important. This means going through the buyer’s journey with them, whether subscribing to their content or purchasing their product. Don’t underestimate brands outside your category – they can still be considered competition. In addition to bidding on competitor terms, we recommend bidding on your brand terms regardless of how high-end you are. Don’t assume that consumers will always come looking for you; sometimes, you must put in effort and resources to capture their attention.

Focus on creative ad copywriting

When it comes to bidding on your brand name, differentiation is crucial. With others competing for the same keyword, investing in creative and compelling ad copy can help capture attention and drive clicks. Make sure that your landing page delivers on the promises made in your ad copy, maintaining consistency and providing a positive user experience.

Don't restrict to using one ad

To improve ad performance, utilizing multiple ads within an ad group and rotating them is important. This allows you to identify the top performers and continuously test and optimize your approach using data. By refining your ad strategy, you can achieve better results and reach your target audience more effectively.

Use negative keywords

Negative keywords are critical to any well-optimized PPC campaign, whether for branded or non-branded keywords. An effective way to stay on top of negative keywords is by regularly reviewing the search terms report on Google Ads platform and removing irrelevant terms. Another tip is to use exact-match keywords from the beginning to ensure precise targeting. Additionally, be mindful of using broad-match keywords, as they can significantly impact your campaign performance.

Refrain from making changes too often

When managing a campaign, allow enough time for data accumulation before making any changes. Constantly adjusting your strategy can make it difficult to accurately assess performance. Instead, be patient and use comprehensive data analysis to make informed decisions.


Keyword bidding is a very important part of PPC advertising, and it’s closely tied to the words you choose, the ads you create, and how your customers experience them. Figuring out the best way to bid on keywords for your campaign takes some time and adjustments. But with the help of the right technology and making changes as you go along, you can make sure your keyword bidding works well.

With advanced retail media solutions like Flipkart Commerce Cloud, businesses can streamline their advertising strategies and take their pay-per-click campaigns to the next level. 

As one-stop retail media solution and with 14+ years of experience in the field FCC offers:

  • Marketplace technology stack facilitating retailers in launching and expanding their online marketplaces. The platform offers 40+ plug-and-play components such as catalogs, personalization, Order Management System (OMS) and seller management etc. 
  • Retail media solution, a robust advertising engine that utilizes AI/ML algorithms to place tailored ads based on the user’s shopping behavior. 
  • Retail pricing manager, helps retailers understand competitive pricing strategies. By tracking and analyzing competitors pricing in realtime and using ML to gauge price elasticity, it improves pricing decisions for maximum profitability for retailers. 

Our team of experts provides end-to-end white glove support, guiding businesses through implementation, change management, and growth. Contact our retail media experts to know how we can help your business grow.

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