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I started out on 1 term that's a normal 5¢ minimum all by ourselves with a 10¢ maximum bid and actually paid 5¢. Another advertiser then arrived above us with a lower CTR (you can see by the bar). I can only assume that his maximum bid is higher then 10¢. We continued to pay 5¢.
What was he paying?
Recently another advertiser has entered the fray and he is #1 with ours in 3rd still paying 5¢. I increased our maximum bid to 15¢ and nothing happened. I then increased it to 21¢ and we moved to 2nd place. Does that mean that the previous #2 who is now #3 will pay 5¢ and if so what do #1 & #2 pay?
Can anyone explain this?
If one person bids 5cents and someone else bids $1, the person bidding the least can appear higher. For example, if your low bid got 45% clickthrough and their high bid only got 1%, Google takes this into account.
Positioning on Google is highly complex. Having a high click-through rate is much more important than paying big amounts of cash. As in the case above - if 75 times the number of people click on a five cents advert ($3.75), Google make more money than one person clicking on a $1 advert - I am convinced Google puts the highest profit makers to the top. Makes good business sense? Therefore your advert copy is crucial, as is negative keywords to stop pointless displays and to encourage clickthroughs.
As much as I like the results of WordAds I hate this world of smoke we must operate in.
I enjoy getting 500 leads aday from Google Adwords at a nickel a pop.
Try that with Overture.
Make more ads, take the most expensive keyword and keyword with most impressions, but few clicks to a new adgroup.
Experiment with different ad text and CPC. If traffic is high enough: Test always three ads against each other. After about 1000 Impressions you can weed out the weakest ad and replace it by another one. In this way your CTR will continue to grow, and others will pay more than you. Don't bother, if others are above you, as long as the ROI is fine.
By-the-way: I can't see your adwords in Germany, is your Target market only USA?
[edited by: NFFC at 4:36 pm (utc) on Oct. 20, 2002]
So, how many ads are there at present? If only three: Go for 5 Cent. You will enjoy the same CTR as your competitors. No effort to get above them will bring you one click more.
In case there are 8 or even more, waiting to get in (by rotation?): Staying in place 6 with a reasonably high CTR might still be okay, if you have something special to offer that your competitors can not. Even for the same keyword your ad text, especially the headline can show that you offer something the others don't have.
If you have a commodity (nothing special, no better prices, no USP), than being in a higher position will help to get a better CTR with all the added advantages. In that case you have to pay more than 5 Cents or find another keyword, where competition is less.
