Tonearm - 9:42 am on Aug 5, 2012 (gmt 0)
If the system raises the bid when the ad is already in the top spot (especially if it is a high volume keyword), then the system needs to be adjusted or the keyword needs to be managed manually.
OK, then the unfortunate answer to my original question must be yes.
There are the ROI calculations that lots of bid management systems work off of to determine what the bid should be and then there is the reality of the bid marketplace. Those bid management ROI calculations for setting bids worked better in the Overture model than today's bid environment.
This is the stuff I have no idea about. Could you tell me a bit more? It sounds like the algorithm that sets my bids needs to be more sophisticated. What factors should be considered besides ROI?
When an ad has a high CTR and ranks near the top, one way I found to make a lot more money from it is to drop the bid to #0.01 below the actual current CPC for that keyword. This may or may not cause the ad to drop in the rankings (it probably will drop a little bit in most cases) but the average CPC can drop dramatically while volume stays almost unchanged and profits go up.
That's really interesting. The idea is that you're trying to drop your bid just below that of the bidder below you which should mean your CPC drops to just above that of the bidder 2 spots below you, and hope your quality score and/or CTR keeps you positioned above both of them?
I may as well mention that my niche is not very competitive.