How long to wait before revising bid amounts?

[Wagapapa]

I assume this should be measured by total clicks or maybe total impressions? I have been running my ad for 2-3 months. Started out at $1 and have been dropping my bid for my top keyword (generates like 90% of all my clicks) in five cent increments. My ad has continued to hover between the 2nd and 3rd position. I have been scared to drop things too quickly, so usually wait a few days or even week or more between adjustments. Is this too long? Should I make a significant drop and just see where I land, then go back up if needed?

[Wagapapa]

This might be poor bulletin board etiquette, but I'm bumping myself in case anyone might be kind enough to respond to my question. If not, after this bump I'll let the thread die.

Thanks in advance for any responses.

[mark1111]

This might be poor bulletin board etiquette

Can't imagine why.

It's preferable to have some kind of tracking, so you don't have to make decisions based on clicks--and certainly not on impressions--because the CTR doesn't necessarily indicate how well the ad is converting. It's not unusual for an ad with lower CTR or in a lower position to produce more conversions.

As soon as the reported CPC goes down, you can reduce your max bid (which you can do in 1-cent increments--doesn't have to be 5 cents). But this isn't absolutely necessary, since the CPC is all you're being charged. Also, if things change--say a new advertiser jumps in with a higher bid--you've locked yourself into a lower spot until you manually change the max bid. On the other hand, it does prevent you from being charged more than you want to pay.

I think it's easier to drop gradually than to try to regain a lost position.