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I entered into a bid war with one of our competitors. The keywords we are bidding on are not traffic heavy but are very targeted to our services. This war has gotten to a point, where I am bidding $1.00 and the only other bid (our competitor) overbids me with a $1.01 bid! This is totally ridiculous!
I donít know what to do. I donít want to stay in the first position for $1.00 because I am afraid our competitor will just click us out of our budget. I donít want to drop out either.
What to do? Any advice would be greatly appreciated!
Lets say the bids are as follows:
#1 - $1.01
#2 - $1.00 - your bid
#3 - $0.50
You'll end up only paying $0.51 while the top guy gets stuck paying full price - let him have the top spot.
The other thing you can do is contact the competitor. I am managing an Overture campaign for one client who has gotten together with his 2 main competitors on some agreed upon bidding strategies. We have an understanding that keeps our 3 sites at the top without the silliness of bidding wars. It's all very civilized...until an intruder shows up - but we have a plan for those too :)
As for the bid war, let the competitor do the worrying. Just pay less, take #2 or #3 position, BUT WRITE A BETTER AD, the best ad you have ever written. You will get more clicks, make more money, and drive your competitor crazy. Then, change your killer ad copy every week with another better ad, especially if he copies your first ad!
Hope that helps, WFN :)
I also thought that collusion was also in the grey, but Iíll give it more thought (especially if the lawyers are doing it).
My story is simple Ė I was the only bidder for the terms at 0.05. Then this company came and naturally bid 0.10. I went to 0.15. He to 0.20, etc. Now I am at 0.99 and he is at 1.00. So, effectively I am paying 0.10 cents while he is paying 1.00, but now there is a third company that is overbidding my "first" competitor. Now I am in the third position, which in the results (Yahoo for example) appears at the bottom of the page :-(
Should I start overbidding them until it gets to say 2.00 and then bid for the third position?
I will work on the copy some more though Ė good thing they do not copy and write their own (sometimes without the keywords in the body).
Im not that nasty but I know it can be frustrating sometimes especially if they are offering a product or service that is either of a low quality or is perhaps (it happens) that the site in question has no relevant information on it.
$1.01 - Competitor 1
$1.02 - Competitor 2
$0.99 - Me
That is why my ads sometimes appear at the 23rd place because they are at the bottom of the page: after 2 Overture ads + 20 regular search results from Yahoo Ė then mine.
I think that Iíll just bid them to the limit and then stay at the third position. Thanks for all the advice!
If you are using bid management software, you may want to set up your 24 auto bids in a strategical way. What are the best selling hours? Once you know that, then spread your 24 auto bids amongst those hours.
Any thought on where to go to find out about writing killer ads?
Have people seen a difference of moving up to 2 and 1. I hang at about 3 on most of my bids. I know for yahoo it puts me below the page. But should I spend the extra to move up?
So I changed my theory on this stuff. I dropped all of my bids as low as possible so that I still stay at least at #5. I wrote some really good ads and found some keywords that nobody else was bidding on that actually return more visits than the more competative terms even though they are not searched as often. Funny thing is I'm still spending the same ammount in clicks per day at the lower bids, you know what that means? More Clicks!
Here's the real trick to Overture. Don't throw money at it, don't fight for the top position, just find out what ads work for you, make sure they are on the first page and find those great keywords that nobody else is bidding on.
Just joined up and man do I have much to learn. Quickly, what bid management software? Is it worth it?
Price collusion is against the law. Of course like everything else it is gray and someone must prove that they were damaged in order to collect. It goes on all the time in a number of industries and nobody thinks about it.
There was a huge case here in St. Louis regarding Archer Daniels Midland, a multi billion dollar agriculture commodity supplier. It was all involved with price fixing. One of my good friends dad's was an executive there. While not involved in the scheme, the FBI sure kept a presence watching their house and interrogating their family and a lot of the other execs got punished.
I'd be careful...all you need is a fourth firm to enter the mix figure out what you are doing and they could make a big deal about just for the bad PR it would cause their competitors. Further, if you are the SEO, I'd make sure you have your back covered. The last thing you want is for them to say that you did it on your own.
If you have the time, you can pick your spots to drive your competitor nuts.If you have tracked your clicks and know when the volume is the best, go in and take #1 for a few hours then back off. If you competitors aren't watching as you are it will drive them nuts.
Also the advice you have been given about writing better ads and picking the 3rd spot is very good advice. I had competitors who try the same thing but I keep .01 or .02 behind and force them to pay the highest price. Try picking your spots, it will make them crazy.
From that you can work out the maximum you can pay per click, and stick to that - don't be led by the market. Use bid management software to help you spend efficiently.
Remember, the idea is to get traffic at a CPC that makes you money. It's not a competition to see who can be number 1.
There is nothing wrong with number 2.
But I am number 1! Seriously, I understand and it is ok for me to be number 2 or 3 or 4.
ROI you say? Not for me. We are a consulting services company; ROI is virtually impossible to calculate with any degree of accuracy for this kind of advertising.
Great advice Ė thanks!
Beyond legality: one thing I haven't checked is the Overture boilerplate, but my guess is that they put some language in there about collusion, fraudulent bids, etc. Thus, even if the behavior was legal, it might be a contract violation.
Liability on your part could occur if you are managing the bids for one or more firms or are otherwise involved in the process. I wouldn't assume that nobody will ever find out - a disgruntled clerical person at one of the firms might blow the whistle (along with turning them in for those unlicensed copies of MS Office the summer interns are using ;)).
If this is indeed price fixing, then I think Overture could probably sue for treble damages, too.
I'd consult an attorney, but not the perp(s) in this case! If you get trustworthy advice that this scheme isn't kosher, distance yourself from anything to do with the bidding.