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They're on .25 pence, so the question for me is to beat them at .26 pence or settle for second place at the minimum .05 pence.
My conversion and profit for sale are such that it's more lucrative for me to pay .21 pence more and be in position #1 as long as position #1 gets at least 8% more clicks than position #2. (i.e. the extra few clicks are worth the extra cost for every click) So...
Question 1) Does position #1 on Overture UK get 8% more clicks than position #2?
Now they may change their bid, so more generally ...
Question 2) How many more clicks does position #1 get than position #2. Anyone have any information?
And lastly, can I appeal to your sympathy for the underdog and ask if anyone knows what the tactics / real Max bid of this Auction Giant are?
Presumably they are using 3rd party software so the max bid listed isn't certain. Has anyone found out how high they're willing to go in a niche? Presumably they can't calculate ROI for everyone of their thousands of keywords, so they must have some general maximums rather than a different one for every keyword.
In answer to your question, all industries have different patterns based on position, brand and the competetiveness of the industry.
Without knocking the big auction giants, most of them do NOT have a clue on what/why/where they are bidding.
You can try a test for a couple of days, 1 day at position 1, next day at position 2.
There are a number of excellent packages which are approved for automated bid management at Overture, without dropping urls, 1 such package highly recommended is GoToast.
Apart from that, some of the best PPC campaign management guys are members of this community, and will be pleased to give you some tips for PPC.
Lastly, do not worry too much about #1 or #30, at the end of the day its the $$$s that count, and do not fall prey to the "Overture Ego Plan" where all sense dissapears and being #1 is crucial.
(trust me on that last tip, been there, got the T-shirt, and lost a fortune)
Hope the above helps, sorry I could not be more specific with % of figures.
and finally welcome to the "dark side"
[edited by: Shakil at 9:53 pm (utc) on Dec. 16, 2002]
I think I know the certain auction site you mention and I promise you, you will never win in a head to head on price, but, you will never lose on conversion based on relevancy.
If you only have that one competitor and can always be in the top 3, then as long as the call to action is good enough and the price is good enough when the visitor gets there then I'd ignore the competition and focus on your own stuff.
I think if you did your ROI sums that it would be better to be paying 21p less.
We've often played around with big auction provider and they have very deep pockets to be #1. You are looking at figures well over £1 per click.
As for how many more clicks does #1 get than #2? It depends on so many factors, like how well the ads are written, how many sites are competing for the clicks, who the #1 or #2 is (this is where being a big brand scores, people will often go for who they know), what time of day, day of the week, industry sector.... etc.... etc....
Bottom line is, don't worry about how many more #1 gets, worry about ROI, spend a week in both positions and work it out for yourself. Some keywords give us better ROI at #4 than #1, but it depends on whether you want critical mass or not. More clicks will not always translate into more sales, the numbers are not always consistent.
Chances are they are using automatic bidding software or someone inside Overture is running the campaign for them. This may or may not work depending on how high you set the bid. You may also get stung this way if the other bidder comes in at 1p less than your bid.
You could try to bid higher for a month, see what the click through rates are and then decide what to do in the next month.
Hope this helps!
Particularly thanks to various people for pointing out that conversion rates vary across positions, and to WebDiversity for that Auction Giant's tactics and depth of pocket.
I'll try it in position #2 for a month to get some baseline data, then maybe try a sally into position #1, and report back here with the results.
Myself (and a few others I believe) increased my bid to 59p so they paid 60p a click. It took them two weeks to react when they just dropped away again. Even though my favourite postion is number two, I still thought they should play the game.