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Google AdWords Forum

This 47 message thread spans 2 pages: 47 ( [1] 2 > >     
Making your competitiors pay
Jon12345




msg:1115782
 10:55 am on Aug 12, 2004 (gmt 0)

I pay max 30 cents per click on one of my keywords and I have position 2. My competitor is in position #1. Recently, I used the adwords bid estimator thingy and it said to get top spot I need to pay about $1.20.

Is there any way I can force my competitor to pay more? Or will that just cost me more too?

My understanding is that if I am paying 30 cents, they are paying 31 cents. And if I put my max bid up to $1, they will pay $1.01. Correct? What do I pay if I put my max bid up to $1? Do I pay the bid above the lowest person below me or just below the guy in #1 slot?

Thanks,

Jon

 

eWhisper




msg:1115783
 12:41 pm on Aug 12, 2004 (gmt 0)

The bidding on Google isn't completely based on how much you're paying, it also involves CTR.

This is a very detailed post (11) about the bid rank formula which should get you started:
[webmasterworld.com...]

MultiMan




msg:1115784
 5:31 pm on Aug 15, 2004 (gmt 0)

I am familiar with this.

I am with a social organization which mostly always leads the AdWords positions for its main keyword. The site in the second postition is a "friendly" site with the organization. (That is, the two sites know each other and are not out to bid-compete with each other because they provide very separate sub-niches of the same keyword). Our organization site normally only has to bid Max to 10cents to stay above the second site.

In this keyword, however, from time to time, there are occasional self-published book authors who come in and try to advertise their little books in the keyword. They never succeed, never make enough money from sales to justify the ads, and never last for long in AdWords. The AdWords "regulars" in this keyword know this as a fact from long experience advertising in this keyword. Nevertheless, these occasional self-publishers are still a nuisance for the time while they are on the AdWords scene.

Since we know they will always fail and will always end up leaving, then we have found our best strategy is to speed up their exit from AdWords as fast as possible and to make them pay G as much as possible in the meantime.

So, if they choose to bid up the prices so as to gain first place position, then we will directly target them to STAY IN THAT FIRST place position but at the most expensive possibility for them.

Since we are normally first and the other "friendly" site is normally second, the neat little "secret" is that the price we pay IS THE SAME when the "regular" sites are newly moved down to "second and third" positions respectively (because of the new self-publisher coming in to first pushes the regular sites down one position). As long as the "friendly" site does not change its bidding (which it does not), then we will still only be paying the same price the site pays normally when in first or now when in second after a self-publisher comes in.

And that is what gives us the room to bid up the Max CPC while not increasing our own price.

Here's the method.

We open two browser windows, one for the page of the keyword search and the other for the log in to the AdWords account.

We bid up the keyword and then test the results in the search page. (This sometimes requires waiting for a minute or two while the G servers catch up to the edited CPC change.)

Once we see which highest bid price gets us back in to first position, we realize that is the "ceiling." But we do not want to be in that first position!

So, we immediately start bidding DOWN the CPC, in increments. After each bid-downward, we test to see if our site then moved back down into second. If not (even after several minutes of waiting), we repeat the process of incrementing the bidding-downward until our site successfully moves back down into second position.

That is where want to be during this time.

We then regularly refresh the AdWords account log in window and routinely refresh the search results page too. We want to be ready to further drop the bid if our site ends up back in first again. (Otherwise, we could get caught and end up paying such higher CPCs if we are then in first!)

When we know we will not be able to monitor the situation for awhile, we reduce the bid to a lower price (just so that we do not get caught into paying any higher price if they suddenly drop their bid while we were "not looking" which puts us in first again).

But when we get back to monitor it and know it is safe to do so again ("safe" simply because we ARE watching it), we then bring the bid back to "just under the ceiling" again to make them pay max for every click they get.

By doing this, we sometimes "scare" the new AdWords when they see the price of clicks they are paying. The self-publisher then either drops their own bid back down to the 5 cents CPC (and the bottom AdWords positions) or this ultimately forces them to expire their funds so quickly that they realize that using AdWords simply is not profitable enough for them to continue --they leave AdWords!

We have no regets about this, nor do we fear G in this. After all, these annoying self-publishers NEVER stay for long because they NEVER succeed in this keyword. Fact is, THEY DO NOT BELONG ADVERTSING HERE ANYWAY because they are not authoritative anyway. So, we are actually getting G the max revenue which G would every otherwise actually get out of this! The self-publishers were going to leave anyway, we just made them pay G more revenue for the privilege of giving up their money before they send themselves off on their own disheartened way! lol

Since those annoying self-publishers are going to leave anyway, better to speed their exit up than waste our time and money in a bidding-up war. And all it costs us is the time to monitor it.

During all that, we always end up paying exactly what we had been paying before, because our payment is only based on the next "friendly" site anyway!

And when the self-publisher leaves (as they always do), we simply lower our Max CPC bid back to its normal level again.

Hope this helps!

geebee2




msg:1115785
 9:45 pm on Aug 15, 2004 (gmt 0)

An amusing account from Multiman :)

It could get more interesting if the other party started playing the same game, getting MM to up the bid, then reduce a little, etc.

Also, because click through rate also goes into the equation, isn't there a risk that MM will end up on top with an expensive click through that he doesn't really want!?

Frankly life is a bit to short to think about playing this game for me, though I see nothing wrong with it.

MultiMan




msg:1115786
 10:11 pm on Aug 15, 2004 (gmt 0)

Your point is why it is necessary to keep two browser windows open and regularly monitor the situation, one for refreshing the search page and one for refreshing the AdWords account log-in page for fast response (editing CPC) if necessary.

It once happened that one annoying self-publisher did something like you describe. Once they got up to 30cents Max CPC, they then realized they were paying big and so they began what I call a "race back to the bottom." Because we were monitoring the situation, we noticed we were in first position again, so we dropped the bid down to 28cents and got back into second position. Soon after that, they re-lowered their own bid again, putting us back into first. So, we dropped the bid again (on purpose) to get back into second. This process repreated itself until we got back down to 15cents, ie. the "race back to the bottom."

Once there at 15 cents, we then decided to stay in first. lol

The self-publisher could not accept that, though, so they bid back up high. And we followed it back up up to 35 cents and got under them again. lol

So, if they stayed low, we would then stay in first. If they wanted to be on top, they had to bid high and we would make them pay for that.

[edited by: MultiMan at 10:17 pm (utc) on Aug. 15, 2004]

jk3210




msg:1115787
 10:15 pm on Aug 15, 2004 (gmt 0)

collusion: A secret agreement between two or more persons, who seem to have conflicting interests, to abuse the law or the legal system, deceive a court or to defraud a third party.

MultiMan




msg:1115788
 10:23 pm on Aug 15, 2004 (gmt 0)

collusion: A secret agreement between two or more persons, who seem to have conflicting interests, to abuse the law or the legal system, deceive a court or to defraud a third party.

I don't understand the point of your comment here.

If you mean that you think the organization site is somehow "colluding" with the "friendly" site against the self-publisher, not at all. The other "friendly" site simply doesn't do anything during any of this. We just know where they stand in the regular AdWords positions for the keyword. It is only the organization site targeting the annoying self-publisher. So, no collusion going on there at all.

If that is not what you meant, I admit that I do not understand.

[edit only for typos]

[edited by: MultiMan at 10:24 pm (utc) on Aug. 15, 2004]

Robino




msg:1115789
 10:23 pm on Aug 15, 2004 (gmt 0)



Auction (n): A public sale in which property or items of merchandise are sold to the highest bidder.

jk3210




msg:1115790
 10:52 pm on Aug 15, 2004 (gmt 0)

Closest one I could find that applied to auctions:

"The unlawful practice whereby two or more people agree not to bid against one another so as to deflate value or when the auctioneer accepts a fictitious bid on behalf of the seller so as to manipulate or inflate the price of the property. "

I get the impression that the important thing in the eyes of the law is the intent. For example, a decade ago the airlines got into trouble for price-fixing via computer systems even though they never directly spoke to one another about the fares. What got them into trouble was their "intent" to boost or fix fares, thereby defrauding a third party --travelers. The law took the position that their "actions" constituted the necessary "agreement" to collude.

jk3210




msg:1115791
 11:02 pm on Aug 15, 2004 (gmt 0)

As an adendum, as everyone knows, the airlines have different codes for their fares...yb, yc, fc, etc.

It was shown in the government's case that one airline had an extremely low "FU" fare that they would post whenever another airline's actions didn't suit them.

The government also considered this as the necessary communication between two parties for the purpose of defrauding a third party.

MultiMan




msg:1115792
 11:22 pm on Aug 15, 2004 (gmt 0)

So we have apparently left the discussion about AdWords and begun talking about completely separate issues, because none of the collusion issue applies to anything I've said whatsoever.

geebee2




msg:1115793
 11:33 pm on Aug 15, 2004 (gmt 0)

As far as I can see the only collusion that seems possible is between advertisers to 'defraud' google.

Suppose there are 2 keywords, each with roughly the same value/meaning. Advertisers could collude to not bid up the price, but have one each.

Or with a single keyword, they could advertise for a week, then withdraw in favour of the other etc.

Such collusion would certainly seem to be illegal.

In theory, it would be nice for advertisers to be able to specify their bids in a more flexible way, for example by means of a function that could reference position, number of competing adverts, date / time etc.

I might be prepared to bid $2 for top spot, but not for second, for example.

Whether this could be practical I have no idea.

MultiMan




msg:1115794
 11:34 pm on Aug 15, 2004 (gmt 0)

For further clarity, when I used the word "we" in my posts in this thread, I have only been meaning "we" who are in the organization. I am not referring to "we" as if referring to both the organizaiton and the other "friendly" site.

bostonseo




msg:1115795
 12:06 am on Aug 16, 2004 (gmt 0)

MultiMan what you are doing is collusion and will undoubtedly catch up with you. You know what I know this? Because you seem like an arrogant type that always thinks they're smarter than everyone else. Guess what? You're not.

Enjoy the ride while it lasts. Intelligent people keep their 'secrets' to themselves; you've shown your cards. Unwise.

MultiMan




msg:1115796
 12:22 am on Aug 16, 2004 (gmt 0)

Intelligent people keep their 'secrets' to themselves; you've shown your cards. Unwise.

I do not apoliogize for helping out fellow WebmasterWorld users by sharing tips to help. That's because that is why we are all here, to help each other with tips and insights.

MultiMan




msg:1115797
 12:31 am on Aug 16, 2004 (gmt 0)

Collusion requires two or more. The method I described has been exlusively unilateral, involving no one else. The only "other" one who directly benefits from the method described is G itself, from getting higher CPCs from the self-publisher.

bostonseo




msg:1115798
 12:37 am on Aug 16, 2004 (gmt 0)

Oh yeah great tips; risk jeopardizing being able to do business with Google forever by 'cheating' the system in the short-run. That's smart.

5stars




msg:1115799
 1:02 am on Aug 16, 2004 (gmt 0)

I am glad MultiMan was so candid. (not that I agree with your ethics) but it reinforces something I have suspected happening to us for some time, but wasn't sure how they were doing it.

There are two sites that I think are working together against any advertiser that bids above them. One is the merchant site and the other an affiliate site that points to the merchant. Mulitman... how can I go about proving this?

Would it even matter to Google if it could be proven?

MultiMan




msg:1115800
 1:02 am on Aug 16, 2004 (gmt 0)

Oh yeah great tips; risk jeopardizing being able to do business with Google forever by 'cheating' the system in the short-run. That's smart.

Since this benefits G by raising more revs for G, I cannot see G having any problem with this. (Can you list any AdWords "rule" which you believe that this method supposedly breaks?)

All we are doing is making the highest ad position pay G the highest price possible. Wasn't that the whole capitalistic goal of G in offering AdWords in the first place?

I believe we are doing exactly what G anticipates and even expects us to do.

[edit only for grammar correction]

buckworks




msg:1115801
 1:28 am on Aug 16, 2004 (gmt 0)

People are free to bid whatever they want for their Adwords listings, but I find that such games are more headache than they're worth.

I prefer to figure out bid levels that provide a sustainable ROI, then just let things run while I work on something else that's either more productive or more fun!

danieljean




msg:1115802
 3:16 am on Aug 16, 2004 (gmt 0)

MultiMan- There are a couple points about which you are not being honest. Giving a new bidder a chance to experiment with different creatives might allow them to keep bidding on the keyword. This would be even better for Google, and worse for you.

I'm glad you shared that though, because there is one simple way to defend against such actions.

5stars- there's no need to prove anything. Bid as low as you can, and work your creatives. Stick to ROI considerations, and don't get sucked into an ego-war. If your competitors are sufficiently ego-driven that they will try to force you out completely, it is they that will go broke first.

skibum




msg:1115803
 4:19 am on Aug 16, 2004 (gmt 0)

This sounds more like something to do with Overture bidding when there are applications to jam other bidders & make them pay more by exploiting their bidding strategies. The lag in Google would seem to make this rather difficult in real-time and awfully time consuming.

D_Blackwell




msg:1115804
 6:04 am on Aug 16, 2004 (gmt 0)

The technique is interesting, and I have no problem with it. I appreciate learning about it. However, the consistent reference to the "friendly" site will, as already indicated, throw up red flags all over the place. If your actions are truly independent, and you can justify the time for the technique, then great. But price fixing, especially with small fry niche markets, while rampant and virtually unchecked, is still illegal.

MultiMan




msg:1115805
 10:16 am on Aug 16, 2004 (gmt 0)

I repeat again and again and again and again and again -- did I make my point yet? :) -- the reference to the "friendly" site which I made is only that it is in the next position after the organization site. The other "friendly" site is not doing anything in this.

I only mentioned it as a matter of why we can know that we also do not have to worry about the site in that next position interrupting the technique. This is not because of collusion but only because they do nothing and have no desire to make us pay more than we pay. So we can count on that inaction as we apply our technique.

MultiMan




msg:1115806
 10:22 am on Aug 16, 2004 (gmt 0)

As for ethics, it is the annoying self-publishers who take the gloves off when they try to fight for the first position. They are the ones without ethics, not us.

Their books are never accurate about the topic (this is fact not my mere "opinion"), are wholly unaccountable and usually outright destructive to the niche, and always play to the very same false stereotypes of misinformation about which the organization is fighting/working to overcome. For us, we just want the truth out about our issue (our very lives are at sake, actually, which is why it is important to us) all for real intellectuals to have available to find and learn.

Since the G natural SERPs make it impossible for the searcher to find accurate information (because G natural SERPs are useless in order for G to generate AdWords sales, of course), AdWords is the only way to get that accurate information in front of the searcher. When a self-publisher comes along with their ego and patently false, inaccurate self-published "book" and also try to get on top in AdWords, it is they who are being unethical, not the organization.

This is a fact unique to our topic niche, I realize, but it is true nevertheless. Our strategy of dealing with them is about fighting for our very lives while these annoying self-publishers are the ones only out for a buck on falsehood or false information.

anallawalla




msg:1115807
 2:18 pm on Aug 16, 2004 (gmt 0)

MultiMan,

I do not see your technique as collusion because the other friendly site has no contact with you while this is going on. Thanks for sharing.

The technique works quite well at another PPCSE.

ogletree




msg:1115808
 2:47 pm on Aug 16, 2004 (gmt 0)

Since the G natural SERPs make it impossible for the searcher to find accurate information (because G natural SERPs are useless in order for G to generate AdWords sales, of course), AdWords is the only way to get that accurate information in front of the searcher. When a self-publisher comes along with their ego and patently false, inaccurate self-published "book" and also try to get on top in AdWords, it is they who are being unethical, not the organization.

If the SERPS do not show acurate information it should be easy to rank for that term. All you have to do is be on the first page and be the fisrt site that has anything to do with that subject. SEO your site and you can get there. It is not hard.

FromRocky




msg:1115809
 3:39 pm on Aug 16, 2004 (gmt 0)

If I were the self-publisher I will try get the second position, improve my ads and force the "I-know-all site" to pay more.

Robsp




msg:1115810
 3:58 pm on Aug 16, 2004 (gmt 0)

Yep I agree. I think time should be spend improving CTR not playing games. If the author is smart that's just what he does. Relevancy is key.

MultiMan




msg:1115811
 7:47 pm on Aug 16, 2004 (gmt 0)

If I were the self-publisher I will try get the second position, improve my ads and force the "I-know-all site" to pay more

The beauty of this method is that that is exactly what we expect them to do if they catch onto it. And they cannot hurt us! It simply becomes the "race back to the bottom," and we are then more than glad to then stay in first position once we get back there in the low prices again! lol

In
msg #:5
I described this situation already.

It once happened that one annoying self-publisher did something like you describe. Once they got up to 30cents Max CPC, they then realized they were paying big and so they began what I call a "race back to the bottom." Because we were monitoring the situation, we noticed we were in first position again, so we dropped the bid down to 28cents and got back into second position. Soon after that, they re-lowered their own bid again, putting us back into first. So, we dropped the bid again (on purpose) to get back into second. This process repreated itself until we got back down to 15cents, ie. the "race back to the bottom."

Since the organization site provides searchers "with the horse's mouth" on the topic (after all, who wants to purchase third party opinions when you can get free information directly from the "horse's mouth," right?), there is nothing a self-publisher can do to "out-do" their creative to be more relevant to searchers than the organization site can always accomplish. So, no matter what ad-creative they come up with for their little book, they simply cannot obtain a higher CTR to outpace us (unless they click their own ad and thus REALLY pay for it! lol!).

(BTW, we do NOT click the self-publisher ads precisely because we do not want to increase their already very-low CTR and we do genuinely believe that that would really not be ethical in this method.)

Experience has long proved that searchers in this keyword are simply not looking for books to buy. Simple as that. The searchers would rather get their information directly "from the horse's mouth" of people directly involved in the keyword. And as this is the only organization out there in the topic, plus with media recognition for the same reason, searchers find exactly what they are looking for before they would ever seriously consider any self-published book giving its mere unsubstantitated or inaccurate opinions. My saying this is not about being a "know it all," only a matter of obviousness regarding relevance.

Besides, most people anyone looking to buy a book in the topic will search in A or BN before doing a G search for AdWords ads. This is why the self-publishers always fail in this keyword.

All we are doing is hastening their speedy departure sooner rather than later. Since they're going to leave anyway, we might as well help them along.

Now, if they want stay down in the fifth and lower positions, there's nothing we can or would want to do at that point. In those cases, they're welcome to it. They can stay down there until they eventually leave, if they want.

It is only when they are cocky and strive for the top positions which then becomes how they make themselves the target of this method.

This 47 message thread spans 2 pages: 47 ( [1] 2 > >
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