This is usually the first question that comes up when people are considering advertising on Pinterest. If you like formulas, I have one for you! Please make sure to see CAVEATS below. 🙂
1. Figure out how much a conversion is worth to you (this might be an actual sale, a signup, etc. - if your "conversion" is simply a page visit, skip to step 5). If a sale, it's likely to be less than the cost of the item. Example: I've determined that selling this leather coat is WORTH $100 to me even though the sales price is $500 and my profit is $150. How much is the conversion worth? $100
2. Now look at the conversion rate on that page. That is, how well is the page converting visitors to buyers (or signups, etc.)? Ideally, you'll look at how visitors from Pinterest are converting on this one page, but if you don't have this information, go with the overall rate. This will be a percentage. Example: 2%
3. Figure out how many visits it takes to the page to get one sale. Example: if our conversion rate is 2%, it takes 50 visits to make a sale.
4. Now we can look at how much a visit to the page is worth. In our example, our conversion is worth $100 and it takes 50 visits to the page to make a sale. So, we are willing to pay $2 per visit to the page.
5. Because Consideration campaigns actually bill per Pin click rather than page visit, you'll want to reduce the bid per click. The percentage of people actually clicking to your site from the Pin will vary, but you could start at around 40% of that page visit bid. Example: target is $2/visit so bid per Pin click is $.80.
CAVEATS:
THIS IS A STARTING POINT.
Formulas are great, but your experience will be unique. Keep an eye on your dashboard to see how it's working. And remember, you're not just paying for more Pin clicks, you're also paying for increased distribution which typically lingers for weeks or even months after your campaign ends. So, while our formula might be a good place to start, you'll likely get a nice downstream bump as well. With that in mind, you might be OK with raising that bid a bit.
If you run this formula on something that is of low value, for example, you determine that an email signup is worth $5, your conversion rate on that landing page is 25%, that means you're willing to pay about $1.25 per page visit and $.50/Pin click. Depending on your industry and targeting, it may be hard to scale a campaign at that bid (but not impossible). This is one of those times I might be willing to raise my bid a bit and count on some of that downstream bonus!
Give it a little time. Budget your daily campaign spend at at least 5X the amount you would pay per page visit (the number you reached in step 4 above. Example: $10/day for the leather coat). This gives Pinterest something to work with. Try to run your ad at least two weeks before adjusting anything.
Have you run Pinterest ads? What's your strategy for bid setting? Do you think this might work for you?
Looking forward to your ideas!
~ Alisa
