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What Should my Bidding be like for a Startup Campaign?

2:18 am on Sep 21, 2004 (gmt 0)

10+ Year Member


This is what's happening. I am rolling out a new site on AdWords, and am not sure what I should be doing.

This industry is competitive... 150 ads for main term.

I obviously don't know what the sites CR is going to be, and don't really know how I should start off my bids... Should I go higher, or start them off at an average price?

Been reading on here since basically the start of the year, but questions still crop up from time to time. Thanks for the help!


2:22 am on Sep 21, 2004 (gmt 0)

10+ Year Member

150 ads for main term.

Whoa. I remember when they limited it to like 7 bidders (the 7 highest) per term. Easier back then.

3:02 am on Sep 21, 2004 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

The first thing I'd do in this situation is bid myself onto the first page for a very short time, just enough (i.e. increase the CPC until you're on the first page, and then turn the ad off) to find out what it costs to be on the first page based purely on agressive CPC pricing.

Once I know the CPC ceiling I'd set a CPA target, split test ads to get the max CTR boost and work from there.

You can't do this, because it's a brand new site, so you'll have to make an educated guess. One of the ways to do this is to estimate how much you'll be making per click through to your affiliate links and then use an extremely conservative conversion % estimate to work out how much you can afford to pay. When you get some clicks you'll get an idea of the conversion rate and you'll be able to update your CPA target.

Hope that helps.

btw - be careful with bidding your way to the top as described above and try to do it late at night (or when you think there might not be much traffic) - but this will always cost you a little bit. It's a shame the CPC estimator is so off. Also, you'll have to up the daily budget along with the CPC, or it'll never show...

3:28 am on Sep 21, 2004 (gmt 0)

10+ Year Member


I take it that I should just try the most competive terms for the top page... All the others will be less costly.

I kinda lied... This site is not exactly new on AdWords. I have run it before (Only a couple weeks) with mixed results. The first week, it had an average CR (which = come to my site-click over to the merchant-buy product) of 4.25%

I tried it again a couple weeks later during the olympics and it sucked... Broke even. So I am basically treating this as a new site, and now everything is being tracked which is something new I am doing.

So basically I want to do this?:

A.) Take a rough guess at what it is going to cost me per click on average for the campaign.
B.) Deduce from that and a conservative CR... how much I should be spending per click to make the kind of ROI I want.

There is a problem though... Besides Ads, and the site, ect... Ad Position comes into play. What should I be doing with this... Or should I play around with it later on certain KeyWords?



5:12 am on Sep 21, 2004 (gmt 0)

10+ Year Member


Ok, Just a small update... Probably the most competitive term, or at least close to the top... has 300 ads competing for it!

So tomorrow I am going to take 5-10 of the phrases with the most ads competing for them, and see what bids will be like on the first page.



3:23 am on Sep 23, 2004 (gmt 0)

10+ Year Member


Ok, I tried to see what it would be like for the top four KeyWords. I bid 50 cents, and this is where it gets strange (maybe I am overlooking something obvious)... For some reason a 4 word KeyWord has 300 ads on it, and the main 2 word KeyWord has 250 ads. I don't get it, why does the 4 word have more adverisers? You would think that the 2 word would have more. These are all exact matched BTW.

I know most of the advertisers on these words don't really know what they are doing... Mostly Google Cash type Affiliates that are trying their hand at making a quick buck.

Ok so for 2 of the words I had 1st page with 50 cents, and the other 2 I was on page 3 and 4. What is my objective? To see what the top word will cost for page 1 placement based mainly on CPC?



P.S. I don't know which of the words converts better, so for all I know the page 4 word could convert better than the page 1, and vice versa.

1:58 am on Sep 24, 2004 (gmt 0)

10+ Year Member


edit-g, I have done what you said is a good idea, with my most competitive terms (4 KeyWords). The most I went up to was 85 cents max CPC, and the 2 most competitive words were still not on page 1.

I did a little analysis:

I make $23.50 for every sale that I refer. Say I have a 4% CR (high, but I did do this) from my website, and I want to keep at least half of this after advertising costs ($11.75). So my cpa (Cost per Acquisition) is $0.47 cents (11.75x4(cr)/100)

Clearly 47 cents is not going to put me at a good positioning on the listings. I take it that most of the time you want to be on page 1?

What would you do at this point? Is my only option to bid as high as needed to get on page 1, and then test like heck to CTR up, and then drop bid, or let google drop bid automatically?

Should I worry about having the super competitive words on page 1, or just the majority? I am dealing with targeted KeyWords here.

Sorry for all the questions.


4:43 am on Sep 24, 2004 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

You've got your CPA right - here's my take. Set up 60 sites like the one you have, and decrease your profit margin to around 2-7% - then you can bid higher and not worry about your margin so much, while making just as much. ;)

Seriously - a 50% margin is pretty high when you're advertising an aff site on Adwords IMO. Maybe you can decrease it to, say, 25% to get the site started?

Also, when you're estimating conversion, it's probably best not to use the highest ever conversion rate - rather use something in between and a bit more conservative.

You'll probably still get traffic for the $0.47, it just won't be as dramatic as being on the first page. You just have to make the call - you'll lose some money by getting on the first page - but you might make more money in the long term.

If you're asking me what I would do: I'd decrease my own cut so that I could spend more on advertising. I don't think any new venture gets the margin they want from the get-go - you have to work on it. Just my two cents.

4:44 am on Sep 24, 2004 (gmt 0)

10+ Year Member


I suggest you ignore what others are doing and just put in the CPC that you are (definitely) willing to pay ( in other words keep it on the low side ).

If after a few days you have had no impressions, you may need to raise it a bit.

If after tuning the campaign you are making loads-a-money, and are under your daily budget, consider raising it some more.

The reason you get more ads showing with longer keywords is simply that other advertisers are using broad match.


5:19 am on Sep 24, 2004 (gmt 0)

10+ Year Member


Thank you both...

don't think any new venture gets the margin they want from the get-go - you have to work on it. Just my two cents.

This part really hit home... BTW I am willing to part with money in the beginning for testing, and to get CTR to a higher level.

I think I will test a lot with this Campaign.

First I will try at 47 cents exactly, and see what kind of numbers I can do. I will then see how things go at the other end of the scale.

Here are couple more questions to throw at anyone willing to answer:

A.) So say I have 47 cents down as a campaign wide CPC... I see in a few adgroups though that there are some high impression KeyWords that are not in a respectable position (Around where the others are at)... Do I manually try and boost these up by editing their CPC

All the Best,