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When first starting in affiliate marketing, it can often be a scary and daunting task to know how much to bid.
The answer to this question was not really developed by me but a good friend and mentor to me. Essentially the idea is this. When starting a new affiliate campaign, you can talk to your affiliate manager and ask what the average eCPC is for search affiliates.
If the offer is run on email and search and web, the network wide eCPC is going to be way off so make sure to ask for the search eCPC average.
After getting this average, you can start your bids by bidding roughly 33% of the network wide eCPC average. Now if you even just get 33% CTR from your landing page to the offer page, you should be somewhat breaking even.
That being said, use this as a gauge to start getting traffic.
Next, comes the testing, number crunching and simple math. Really, once you understand your percentages and find how many people on average go to the offer and convert, it's a matter of using those numbers to find what your max bid can be before you lose money.
After you get this number, it's time to break it down to keyword levels. 
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What always bothers me about EPC data from the networks is some people direct link and some have landing pages and that throws the epc all out of wack as the affiliates who use landing pages will usually have a much higher epc since the click is pre-qualified already. I usually ask for a few more pieces of info before starting a new campaign than just network epc data
I have always just used eCPC as an estimate starting point. I figure that if I can break even on the average then I can lower my bids gradually over time, but I do see advantages bidding at 1/3 of the eCPC. I also see one disadvantage – that is, that without enough volume it can be quite hard to collect trustworthy stats on ROI etc.
Another idea is to put all your keywords in the traffic estimator for exact match. They will give you the estimation for position 1-2. Example.
[Local Single Dating] Would cost $1.10-1.50 for positions 1-3. I like to take the average which would be $1.3, and multiply by some amount like 80% to be in the middle of the page.
so I’d get a starting bid of $1.04 for that keyword. The idea is rather than every keyword having the same bid, it would spit out bids based on the volume/competition of that keyword.
-Charles Ngo
thanks for the ideas guy. I have spent most of my time on facebook social ads, and when it came to bidding on keywords for adwords/yahoo I would just guess what I though would work best. These tips should help a lot as I spend more time on adwords.
Hmmm… I should probably be more methodical when bidding starting out, I personally like to get volume first to see its potential then change the bid accordingly
Using google adwords I really bid way too much on some keywords and it really wasn’t worth it.