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Why would anyone bid $5.00 per click
when the second best is $1.01
loanuniverse

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 1969 posted 6:48 pm on Mar 16, 2004 (gmt 0)

While I am somewhat familiar with adwords having been advertising with them for a few months {the whole CTR/CPC combination gets you the top spots thing}. I noticed a large gap between the first and second position in some of the overture bids that I am at a loss to explain.

Example:

Top bid: $5.00
Second bid: $1.01
Third bid: $0.85
and so on....

Is it just that the guy setting up the $5.00 campaign is a bit lazy at management?

 

Shak

WebmasterWorld Senior Member shak us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 1969 posted 6:53 pm on Mar 16, 2004 (gmt 0)

top bid is only paying 1 cent above bid #2 in my opinion in this scenario, however if a new player wanted to beat #1, then he/she would have to bid $5.01

does that make sense?

shak

[edited by: Shak at 7:13 pm (utc) on Mar. 16, 2004]

loanuniverse

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 1969 posted 7:10 pm on Mar 16, 2004 (gmt 0)

So the maximum that #1 can get charged is $5.00, but as long as #2 does not increase his bid or a new player comes in, then he is effectively being charged $1.02

I guess it makes sense now.

Zoron

10+ Year Member



 
Msg#: 1969 posted 8:40 pm on Mar 16, 2004 (gmt 0)

So the maximum that #1 can get charged is $5.00, but as long as #2 does not increase his bid or a new player comes in, then he is effectively being charged $1.02

That's assuming his 'bid type' is set on 'auto' and not 'fixed.'

jatar_k

WebmasterWorld Administrator jatar_k us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 1969 posted 9:09 pm on Mar 16, 2004 (gmt 0)

the person in second should bid 4.99

pageoneresults

WebmasterWorld Senior Member pageoneresults us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 1969 posted 9:11 pm on Mar 16, 2004 (gmt 0)

The person in second should bid 4.99

I was hoping that wouldn't get out! ;)

One of the big flaws with Overture showing Advertisers Max Bid.

Yidaki

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 1969 posted 9:17 pm on Mar 16, 2004 (gmt 0)

Hehehe, thanks guys - learned something new. Now i'm going to purchase a nifty little ov campaign. ;)

Zoron

10+ Year Member



 
Msg#: 1969 posted 10:41 pm on Mar 16, 2004 (gmt 0)

the person in second should bid 4.99

Only if he's prepared to monitor the bid to keep from getting locked in himself in turn.

pageoneresults

WebmasterWorld Senior Member pageoneresults us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 1969 posted 11:01 pm on Mar 16, 2004 (gmt 0)

Only if he's prepared to monitor the bid to keep from getting locked in himself in turn.

Not if you're using bid management software.

yump

10+ Year Member



 
Msg#: 1969 posted 11:08 pm on Mar 16, 2004 (gmt 0)

Here in the UK, Overture showed a bid of £10-00 a couple of days ago (I guess that's about $20, think it was for Domain Hosting ). Scary.

Zoron

10+ Year Member



 
Msg#: 1969 posted 11:28 pm on Mar 16, 2004 (gmt 0)

>Not if you're using bid management software

Overture only allows a set number of bid changes a day and with multiple bidders in a bid war autoscripts can be disabled fairly quickly. Besides, if you configure your bid management software to counteract mine you'll lose unless you revert to human monitoring. I have staff to step in whenever high auto bid volatility calls for it...I do it all the time.

4crests

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 1969 posted 12:18 am on Mar 17, 2004 (gmt 0)

Zoron is correct. It ultimately comes down to 24 hour human monitoring even if you do have bid management software. Unless you don't have much action in your keyword(s).

But, it's nice to have the Bid Management Software so you don't have to watch it every minute. I set mine to monitor only during the busiest 8 hours of the day. That way my quota for changes at OV aren't wasted during slow times. During the slow times, I monitor it myself or have an employee do it every hour or so.

webdiversity

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 1969 posted 12:32 am on Mar 17, 2004 (gmt 0)

An exercise in futility. When software is produced to "kill" your competitors, we are all in trouble.

It's all speculation as to what the $5 bid is in reality. It might be they have an unscrupulous agency managing it and to be lazy they just lock bids in at suicidal prices knowing that nobody would bid more than $5....... but along comes a "killer" and that $1 bid becomes a $5 bid.

Wthether you opt for software, as has been pointed out there will always be times that you are potentially vulnerable playing games. Even with human management, there is the time it takes to refresh a page, where things can happen, and often the bids you see in "More Bids" are different from the ones visible in the top 5, so what the "real" cost per click is going to be is anyone's guess.

Don't ego bid, not worth it, a well written ad at $1 will outperform the $5 every time.

Zoron

10+ Year Member



 
Msg#: 1969 posted 12:42 am on Mar 17, 2004 (gmt 0)

I set mine to monitor only during the busiest 8 hours of the day

I do that also, but conversely, to counteract a competitor employing that strategy, I or a staff member will monitor continually during those periods, as much as every 15 minutes if the autobid warrants it. The result is that the competitor will not be able to rely on his bid management software and will be forced to make adjustments one way or the other... and I'm calling the shots.

Zoron

10+ Year Member



 
Msg#: 1969 posted 12:52 am on Mar 17, 2004 (gmt 0)

Don't ego bid, not worth it

Absolutely. Emotional bidding of any sort (ego, anger, revenge, or whatever) is counterproductive and a very poor business strategy, and will almost always backfire in some manner, espcially if you're unable to back up your actions with monitoring if necessary. Bid wars don't benefit the bidders.

loanuniverse

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 1969 posted 2:44 am on Mar 17, 2004 (gmt 0)

Hehehehehe, the things one learns in this place. :D

I am seriously tempted to bid $4.99, but I don't even want to pay $1.02 so that won't be happening.

4crests

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 1969 posted 7:05 am on Mar 17, 2004 (gmt 0)

I don't check mine every 15 minutes, but I do check it at least every hour.

There have been times in the past when I have needed to check every 5 minutes. But, I've finally worn the competition down, and have a break for a while.

At least until a new competitor comes along.

sem4u

WebmasterWorld Senior Member sem4u us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 1969 posted 8:45 am on Mar 17, 2004 (gmt 0)

I am seriously tempted to bid $4.99, but I don't even want to pay $1.02 so that won't be happening.

Yes, the company in #3 position may decide to bid $4.98!

Zoron

10+ Year Member



 
Msg#: 1969 posted 4:05 pm on Mar 17, 2004 (gmt 0)

But, I've finally worn the competition down, and have a break for a while.

That's usually what happens with me... and sometimes that break lasts for weeks.

shorebreak

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 1969 posted 6:08 pm on Mar 17, 2004 (gmt 0)

Great thread, to which I'll add that at some *some* automated bid mgmt systems beat manual bid mgmt hands down when the # of keywords gets into the thousands or hundreds of thousands and spend amounts into six-seven figures per month.

While it's relatively straightforward for a human to regularly monitor the small number of keywords you're talking about, human intervention breaks down at even modest scale (say 1000 keywords). Case in point, if there are, say, 5 bid positions of meaningful volume across 1000 keywords, that means there are 5 to the 1000th power potential scenarios, one of which is ideal at any particular point in time. That number of scenarios can *only* be evaluated by software, not humans.

Every time I make this argument, manually-powered agency types argue till their veins bulge out of their foreheads, but the truth is in Return on Advertising Spend (ROAS).

Zoron

10+ Year Member



 
Msg#: 1969 posted 8:14 pm on Mar 17, 2004 (gmt 0)

Well Shorebreak...not sure why you're mixing analytics with bid strategies/management...but then I'm not sure why some bid management companies differentiate ROAS from ROI :)

Nor am I sure why anyone would even think of manually monitoring hundreds of thousands of keywords individually... not to mention that those keywords would surely be broken down into at least dozens of accounts if not tens of dozens... unless of course one is the likes of Amazon or eBay.

Neither can I relate to your math in point since Pareto's (80/20) principle seems to disable most exponential functions one might project, although I think you mean 5 x 1,000 rather than 5 to the 1,000th power.

I know that in my case, even with accounts of 2,000 keywords, volatile bidding generally only occurs with a handful of keywords which might require intensive monitoring, and then only periodically. And generally I'm only concerned with 3 positions of which I'm perfectly content to settle for 2nd or 3d positions in many situations...more of an 'opportunistic bid strategy' which requires little if any subsequent bid adjustments with the majority of my keywords.

No vein bulging argument here, however. I'm ambi-dextrous personally... and I find a harmonious balance between manual and auto... Life's sort of like that don't you think? :)

cline

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 1969 posted 5:40 pm on Mar 19, 2004 (gmt 0)

It doesn't matter whether you're automated or manual if you don't have an intelligent bid strategy. It's pretty pointless to be spending lots of time changing bids in reaction to each other. When you get into one of these games both players are best off trying to find a point of equilibrium where they can settle down and stop reacting to bid changes.

Further, the only way you can play the game well is to know what the click is really worth to you. If you don't know that, bidding games are just a waste of time.

Zoron

10+ Year Member



 
Msg#: 1969 posted 9:58 pm on Mar 19, 2004 (gmt 0)

It doesn't matter whether you're automated or manual if you don't have an intelligent bid strategy.

Just as your strategy doesn't matter if you can't execute and manage it. The point is if you don't have an intelligent bid strategy and/or you don't know "what the click is really worth to you" you shouldn't be bidding to begin with. I would think with the caliber of marketing professionals here that would be a given.

Unfortunately, or perhaps fortunately depending upon your perspective, there are a lot of novice bidders who don't have a clue at either.

It's pretty pointless to be spending lots of time changing bids in reaction to each other. When you get into one of these games both players are best off trying to find a point of equilibrium where they can settle down and stop reacting to bid changes.

Most bidding wars aren't that simplistic...and it depends upon your strategy. A two bidder contest, especially if you're not obssessed with being first, doesn't need to be a 'pointless' contest, and it doesn't take long to assess your competitor's tactics and/or degree of expertise, aggressiveness or timidity.

Volatile bidding on the other hand more often occurs when several bidders are vying for position, or simply to remain within the top 3 (or 5 or whatever their objectives are)...and then other, often more complex factors come into play. Again there are too many variables to make generalizations. And you're usually a step ahead of your competition when emotions are left out of the bidding process.

jambo2

10+ Year Member



 
Msg#: 1969 posted 10:02 am on Mar 22, 2004 (gmt 0)

Lat month on Overture UK I came across search terms up to £17 per click related to personal loans.
Just checked now and they have come down a bit, but still well over £10 per click.

shorebreak

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 1969 posted 5:32 am on Mar 23, 2004 (gmt 0)

I'm too tired to go long into all I would say, but I do feel that everyone who's manually intervening in keyword bidding either

a) doesn't have access to regular ROI data
b) can't take ROI data for their keyword set and extrapolate bidding strategy from it
or
c) doesn't know what their business goal is

If you have access to historical and actual ROI data, keyword-level tracking and a clear, consistent business goal for your entire keyword portfolio, you should be able to put the entire thing on autopilot and have it run itself. That's what we do, and while we may be out-bid on any one keyword, for the hundreds of thousands of keywords we manage we're killing the competition due to the advantages of an automated closed-loop feedback system over a manual one.

Zoron

10+ Year Member



 
Msg#: 1969 posted 4:45 pm on Mar 23, 2004 (gmt 0)

I do feel that everyone who's manually intervening in keyword bidding either
a)doesn't have access to regular ROI data

What does ‘having access to regular ROI data’ have to do with automated ’bid’ management vs. manual intervention when and if needed? As in your previous post you seem to be mixing ‘bid management’ with ‘analytics.’ They may be integral in a decision making process but are completely independent functions.

If your autoscript does the job on all your highest performing keywords, great. If and when it doesn’t and you don’t intervene, you’re wasting money and otherwise doing your client a disservice while trying to justify your automated/impersonal service, which in effect purports that the “average” dictates your response, over your client’s individual interests.

b)can't take ROI data for their keyword set and extrapolate bidding strategy from it

‘Applying’ ROI data, however significant, is just one aspect of many factors of a bidding strategy, one that usually precedes competitive bid analysis.

c)doesn't know what their business goal is

No disrespect intended, but that’s preposterous. You’re saying that JUST because one chooses to manually intervene, even periodically with their automated bid management program, they don’t know “what their (his) business goal is?” :o

…you should be able to put the entire thing on autopilot and have it run itself. That's what we do, and while we may be out-bid on any one keyword, for the hundreds of thousands of keywords we manage we're killing the competition due to the advantages of an automated closed-loop feedback system over a manual one.


Perhaps that’s the difference. I deal with one client (and their interests) at a time, and not as one of a small fish in a sea of thousands, in which a smaller, personalized SEM/PPC management service may go beyond a large mass managed one, and allow the ‘flexibility’ of manual intervention when advantageous to a client. And in the process I’m able to apply a highly effective bid strategy in achieving ”clear, consistent business goals,” because I am able to tailor that strategy to an individual client’s unique market, competitive environment and specific bid idiosyncrasies, if and when it might require manual intervention. And although perhaps you can “kill” much of the competition because of their inexperience or otherwise inability to counteract your autoscript, it is exactly that “self running, often unmonitored, auto pilot” system which can be your Achilles heel.

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