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.20 Minimum bid on a "no competition" term?
take "roly poly" for example.
glcbiz




msg:1123841
 9:48 pm on Sep 18, 2005 (gmt 0)

I searched "roly poly" in sponsored search and no results came up. but when I added to my keywords list in adwords, it said I needed a .20 minimum bid.

My question is, if no one is bidding or advertising the term "roly poly", why the minimum bid of .20?

I'm not selling the little guys or anything. I just ran across the term while researching other terms and was curious why 6500 people had searched it.

 

luke175




msg:1123842
 10:02 pm on Sep 18, 2005 (gmt 0)

I have found bids of $5-$10 on terms that no one is bidding on. Even with "optimized" ads this still happens. Ask Google, because I have no idea.

patient2all




msg:1123843
 5:35 am on Sep 19, 2005 (gmt 0)

It doesn't mean you'll pay 20 cents if someone clicks on the ad and there are no other ads showing. You're likely to pay less.

However, don't fall into the trap of upping all bids to what they want. If the Inactive word is good, they appear to be giving it a 'trial'. If it gets clicked a few times, it's not Inactive anymore.

At least that was true as of last week. Anyone else have observations?

patient2all

humblebeginnings




msg:1123844
 6:56 am on Sep 19, 2005 (gmt 0)

This would rather surprise me Patient, cause it sounds like the old system where keywords had a chance to proof their quality with 1000 impressions.
Only this time if your keyword has too low CTR, your keyword gets more expensive instead of it being disabled. If this really is the case it would be an improvement. I donīt see it happen yet, anyone else?

dave741




msg:1123845
 8:25 am on Sep 19, 2005 (gmt 0)

Patient2all, I didn't play with the new system enough - are you sure that the discounter goes under the minimum bid? If yes, how low? To 0.01? I don't think it works this way.

Even if yes, there is this trouble - if you are not REALLY alone (biding 0.10) for particular word, then there is another advertiser who has his minimum bid and if his minimum bid is 0.10, then one of advertisers will pay more than 0.10. And because of regional and geo targeting - you never know if you are alone.

luke175




msg:1123846
 8:30 am on Sep 19, 2005 (gmt 0)

I set up an ad for a term that no one else was bidding on. Say the term was "widgets" and my ad looked something like this:

Buy Widgets
Great widgets at
low prices.
www.greatwidgets.com

The min bid was $5 a click! So I figured, it must just be an error there is no way they are asking $5 for a term with no other bids. So I bid $5 a click.

I logged in to find $100 billed for 20 clicks...$5 each.

-_-

humblebeginnings




msg:1123847
 9:41 am on Sep 19, 2005 (gmt 0)

Dear Lord, 20 clicks at 5 bucks each!
Thanks Luke, now I am sure I will not raise my bids.
So G doesn't only ask you to do wacky bids, they actually make you pay 5 bucks a click!
I dare not to ask Luke, but do you think any of these clicks was converted into sales? Or do you guess it is just a 100 bucks down the drain?

ronmcd




msg:1123848
 3:05 pm on Sep 19, 2005 (gmt 0)

My understanding is that if google has decided your minimum bid is $5, regardless of competition above or below you on the page you will not pay less than $5 per click. I dont think the discounter will have any effect below min bid.

Obviously if you get high clickthrough then your min bid might come down, in which case it would appear your bids are being discounted as normal.

Of course Ive no evidence to back this up. It just makes sense and ties with what AWA (or AWA2 maybe) has said about the min bid being the min at which your ad will be shown.

Competition for a keyword has no effect on min bids.

patient2all




msg:1123849
 3:10 pm on Sep 19, 2005 (gmt 0)

Patient2all, I didn't play with the new system enough - are you sure that the discounter goes under the minimum bid? If yes, how low? To 0.01? I don't think it works this way.

Yes, but it doesn't happen often. Thanks to the new change history, after checking about a dozen Adgroups, I found one where they wanted .40 which I provided on August 28. (Aug 28, 2005 6:33:50 AM PDT - Max CPC changed from Default $0.09 to $0.40)

I analyzed one keyword here.

Since then I have as little as .12 a click as of even yesterday. I looked at a bunch of days to verify:

9/18 - 9/19

Active $0.40 1 68 1.4% $0.12 $0.12 2.3

I know for a fact that I raised it. The range over the period since I changed it seems to have been between .12 and .28. So while you may not pay the max if you raise, it appears more likely you will than not.

Now, I'm into cheap bids. 40 cents is kind of high for me and that change was a waste, but I was never charged .40 cents. This is my history since 8/29, the day after I changed it (according to the new history feature). I don't want to complicate things by suggesting some clicks came in at .40 since these are averages, but the stats from 8/29 (day after change) to now suggest I'm not being hit with the max.

Active $0.40 11 627 1.7% $0.28 $3.07 2.6

Even if the history is another incorrect tool, I know I changed it because of a quirk of mine, I only use odd numbered bids normally. When it's an even # bid, I know I did it because of a demand for change.

What I've been telling people who ask me is to only raise if you really need the keyword. Many of the bids are meaniningless. I mentioned once if you sell "gold t-shirts", you'll pay the price for "gold".

This all is confusing and stinks and I'm as confused as the next person. However, luckily, it has not seemed to affect my profit (perhaps slightly, but that's hard to judge).

BTW, the other ones that I checked, they did take the max, but it was either .10 or .20 cents. I don't play with you $5.00 big boys :) - When a keyword asked for $5.00 or even $1.00, I raised a finger!

patient2all

at least to my fellow posters, but less and less patient with the PPC world! However, we'll adjust!

netmeg




msg:1123850
 3:18 pm on Sep 19, 2005 (gmt 0)

This is the way I understand it:

I can go ahead and write an ad for the word 'splunge', even if my site/url has nothing to do with splunge, and even if nobody else is bidding on splunge, Google will determine that my page probably isn't terribly relevant to splunge (which may or may not be correct - it's an automated guess on G's part, after all) and will therefore come back to me and say, "Ok, you can have 'splunge', even though we're not sure it's really relevant, but you have to PROVE to us that you really want it, by being WILLING to pay a minimum of twenty cents for it. We may not actually CHARGE you twenty cents, and if we notice you are getting clicks, then we may decide you don't need that minimum, and if we notice you still aren't getting clicks, we might decide you're even less relevant than we thought and RAISE your minimum bid, but at least for now, you have to be WILLING to pay twenty cents. After that, we'll see how it goes."

At least, that's my take on it. (And for what it's worth, I don't really have a problem with that line of reasoning)

netmeg




msg:1123851
 3:24 pm on Sep 19, 2005 (gmt 0)

My understanding is that if google has decided your minimum bid is $5, regardless of competition above or below you on the page you will not pay less than $5 per click. I dont think the discounter will have any effect below min bid.

I had a whole bunch of five and ten cent words I was required to raise to twenty and thirty cents - but even after I did that, most of them were still accruing clicks for as little as four cents. Of course, if you set your minimum click for $5.00, you run the risk that you will actually be charged that. But in my experience, it is highly possible that you won't.

luke175




msg:1123852
 6:33 pm on Sep 19, 2005 (gmt 0)

In my experience, never bid more than you're willing to pay. I lost $100 in an afternoon on a term where I was the only bidder with no sales.

It could have been worse.

Now, possibly if I raised my CTR then the price would drop. But who can afford to pay $5 a click until they get a good CTR?

Effectively, Google has killed a lot of terms that used to have no competition.

Even if you make a up a word say "flapperblapper" I suspect you may be amazed at the min bid.

humblebeginnings




msg:1123853
 6:53 pm on Sep 19, 2005 (gmt 0)

Dunno what a "flapperblapper" is, but Google charges me $ 0.50 for it. Anyone else? I mean, do we all get the same minimum bid for "flapperblapper" regardless of the ad-copy, ad-group history etc?

netmeg




msg:1123854
 7:25 pm on Sep 19, 2005 (gmt 0)

Apparently not.

fischermx




msg:1123855
 9:41 pm on Sep 19, 2005 (gmt 0)

I added "flapperblapper", on one of my adgroups on a campaing with 0.6% CTR, it was happy with $0.05.
So, I guess, the user history does matter. I did not even added a new add with the word, just added the keyword with the current ads about an affiliate.

esllou




msg:1123856
 11:57 pm on Sep 19, 2005 (gmt 0)

I made a new campaign yesterday only to discover every keyword inactive due to them wanting 40-50c for each one when I was willing only to go up to about 25 cents.

So I left it.

Went back this evening and they were all still inactive but some of the minimum bids had come down to around 30 cents so I activated a couple of them.

mark1111




msg:1123857
 10:08 pm on Sep 20, 2005 (gmt 0)

. . . which will probably send them back up to 40-50 cents.

Ask Google, because I have no idea.

Ah, but Google isn't talking. Many have asked, much wailing and gnashing of teeth, and AWA has been conspicuous by her absence.

patient2all




msg:1123858
 11:20 pm on Sep 20, 2005 (gmt 0)

You folks won't be paying 5 or 50 cents long for those "flapperblapper" bids. People are hot for "flapperblappers" now!

I can bid $3.05 and still make a $50.00 profit with a 1 in 50 conversion!

patient2all

Sorry, I dozed off and had a dream again!

:)

Dr_X




msg:1123859
 11:37 pm on Sep 20, 2005 (gmt 0)

This high demand for flapperblappers is going to drive the cost up. I better get in while the gettin's good.

-Dr.X

AdWordsAdvisor




msg:1123860
 11:38 pm on Sep 20, 2005 (gmt 0)

My question is, if no one is bidding or advertising the term "roly poly", why the minimum bid of .20?

Since this essential question seems to come up repeatedly on this Forum, I'll see what I can do to understandably summarize the reason why keywords which have little or no competition can end up having "high" mininmum bids. As is often the case, when there is a lot of information to convey, bullet points seem like a good way to go:

Question: My favorite keyword has zero competitors, and in fact I have never had a competitor using it at all. I used to pay $0.05 under the old system. Now my minimum bid is higher. Why?

The Short Answer: Simply stated, the minimum bid for a keyword now has no relationship to the number of competitors one has for that keyword. The system is no longer designed that way.

To put it another way, whether there are zero competitors or 150 competitors for a keyword makes no difference to one's minimum bid for that keyword. Rather, minimum bid is now dependent on the Quality Score for that keyword, as it is used in the specific account in question.

Before the change to quality based minimum bids, a keyword with zero competitors would have required only a $0.05 bid in order to show. However, this is no longer the case. At present, the minimum bid may be lower, it may be the same, or it may be higher than it was previously.

Why? More details follow.

The longer answer:

* First, some history: in the recent past a vocal group of advertisers requested that AdWords do away with in-trial, on-hold, and disabled keywords. They also requested an end to account slowing. As an aside, it is worth mentioning that nowhere were these requests more strongly made than on this very Forum.

* It must be understood that the above mentioned measures were in fact the means used to ensure ad quality and relevance for our users. And doing away with these measures of course required that they be replaced with another means to ensure quality ads for our users. This is because the quality of ads delivered to users is absolutely key to the long-term success of both AdWords advertisers, and AdWords itself.

* The requests were taken seriously, and acted upon.

* The result is the current system which revolves around quality based minimum bidding. Under this system, minimum bid is tied to the Quality Score of the keyword as used in the account. Again, to be very clear, it is not tied in any way to the number of advertisers using the keyword.

* In this system, there is a financial incentive to use carefully targeted keywords and ads. They tend to result in lower minimum bids.

* In this system, there is a financial disincentive to use poorly chosen keywords and poorly targeted keyword/ad combinations. They tend to have a higher minimum bid.

* In this system, there is no longer keyword disabling. Instead, an advertiser may make an informed decision as to what a particular keyword is worth to him or her.

* If a keyword can be used effectively, and profit the advertiser, then the advertiser will probably chose to use it.

* On the other hand, if a keyword can not be used profitably by an advertiser, it is probably not a good choice as a keyword for that advertiser. When this is the case, other keywords should be explored, to see which ones will be profitable - along with making sure the ads and keywords are as well written and well targeted as they can be.

I made a new campaign yesterday only to discover every keyword inactive due to them wanting 40-50c for each one when I was willing only to go up to about 25 cents.

So I left it.

Went back this evening and they were all still inactive but some of the minimum bids had come down to around 30 cents so I activated a couple of them.

As I mentioned in another thread, keywords which are priced under their minimum bid (and thus marked inactive) will continue to get a limited number of impressions in order to test their potential success under current conditions.

You'll see a small note to this effect under the keyword list at the Ad Group level of your account.

AWA

eWhisper




msg:1123861
 11:55 pm on Sep 20, 2005 (gmt 0)

AWA,

Thanks for the good explanation - very much appreciated. The idea makes complete sense.

However, I've seen examples where someone has had a 3-5% CTR with 0-2 advertisers who is now unwilling to pay the min CPCs because the mins are $1+.

The assumption above is that I consider a 3-5% CTR relevant to searchers, and that's the basis of these statements.

It's the above exceptions which make up the minority of all keywords, but obviously stand out as not making sense in the scheme of the system.

If this were an oddity in a single account, it would just pass, however, it seems there are quite a few people seeing these types of examples, which makes one wonder if it's an oddity or a trend.

Either because of coding, or people not willing to pay high min CPCs (i.e. coding vs behavior), there seems to be an obvious inverse relationship between total advertisers and min CPCs.

AdWordsAdvisor




msg:1123862
 12:43 am on Sep 21, 2005 (gmt 0)

If this were an oddity in a single account, it would just pass, however, it seems there are quite a few people seeing these types of examples, which makes one wonder if it's an oddity or a trend.

Well said, eWhisper. I hope that I can reassure you, and others, that when a change of this scope is made, there are a lot of folks watching for both oddities and trends. If and when they're spotted, they are analyzed and acted upon. Particularly the trends. ;)

So, with that in mind (and as I've said often on this Forum) if anyone spots things which, disturbingly, are not working as expected, it would ideal to contact AdWords support with specific examples and details. (And by this I mean details sufficient to allow the tech folks to look in the right places, and at the right things - such as account IDs, campaign names, ad group names, keywords - along with a brief summary of what happened.)

AWA

jim2003




msg:1123863
 1:22 am on Sep 21, 2005 (gmt 0)

AWA,

It seems like much of your advice of late is to directly contact adwords support with questions. I have a question related to this. Are all google employees allowed to compete with advertisers? Specifically are support personnel allowed to compete with advertisers?. If so I am very reluctant to draw attention to any questions I have about my account with such personnel. Any feedback you can provide will be useful.

Clark




msg:1123864
 5:31 am on Sep 21, 2005 (gmt 0)

Thanks for the explanation AWA. Not trying to shoot the messenger. But I'd like to respectfully offer the feedback that it just "feels" like a price increase that is hidden by a fancy algorithm.

Adwords always made something simple very complicated. This is the third or fourth time I've tried adwords and I'm almost ready to quit, even though I was determined to learn all I could about it.

jotafk




msg:1123865
 12:39 pm on Sep 22, 2005 (gmt 0)

AWA:

What about trying to explain this:

keyword:
red widget - broad match, minimum CPC $0.03

Looking at my logs, with this keyword I get lots of traffic also for the [blue widget] keyword at $0.03.

So, I add [blue widget] to the campaign and guess what, min CPC is $0.20!
How do you explain this?

To me is very clear that Google's algo is running on the wrong premiss.
The min CPC is set at high ammounts and then it lowers itself according to the campaign CTR, etc. But by then the advertiser already spent lots of money which leaves a sense of injustice.

Although I'm complaining about this I recognise that Google has all the right in the World to implement whatever changes it wants.
But when someone steps on my toes I act accordingly.

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