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I have one particular keyword that is quite expensive. It used to cost about $1. There has been quite a fight with a competitor to get to top spot and I have been upping my bid regurarly and he has obviously as well. This has now resulted in the bid being about $7.5 and actual click through cost for today was at an all time high of $2.13. In fact the CPC has trippled in less than a week.
I have been able to keep the top spot and my CTR has increased to 7.7% (dont know if this is good or bad)
The problem is this.
My impressions have seriously declined. Resulting in much less clicks. The CTR has increased though, but that doesn't help me much.
The cost of advertising has now become exorbitant and unafordable.
1. How do I get the CPC down while keeping the impressions as high as possible?
2. Is it that important to be at the very top (blue section on top of the search results), or is it more important to get impressions? I see many other advertisers on the same keyword. Do the ones at the bottom or in the middle of the right hand column get clicks?
3. Is their CPC lower?
4. How is it possible that things can change so dramatically? The last time I increased my bid was yesterday to 4$. Today I realised that I was 2nd or 3rd. I slowly increased the bid with small increments and waited to see the effect. I had to go up to $7.5 to get to the top again.
4. The result of all this is that I had to DOUBLE my monthly budget in 1 day! Is this due to my competitor or something else?
I am not a fulltime google specialist. I am doing this for my own business. The time this is taking is rediculous. I have to watch this thing every 2 hours or I slip and my ad isn't showing or my posisiton slips. I do not have the time. How much will it cost me to get an expert to manage this on my behalf? Yes I know.... it is difficult etc. etc. I just want a ballpark idea please.
You mention a lot about clicks and impressions, but nothing about the bottom line - what return are you getting? Has it gone up or down? That is really the only figure that matters.
It is often possible in my experience to get a far better ROI in position 3-5 on the left, paying a much smaller amount than the advertisers burning their budgets to be on top. But again, it depends too much on the market you are in to take that as dogma.
The only thing that matters, however, is your ROI. It makes no sense to get in a bidding war if you have to go in the hole to do it. Breaking even for awhile to drive away temporary competition is one thing, but actually operating at a loss (not to mention such constant monittoring of your ad postions/bids) is a waste of resources.
After this much time, you should know down to the penny (based on your internat stats) EXACTLY how much each visitor is worth, which of your keywords convert the best, and which ads achieve the highest CTR. If any of those variables is a mystery, then you've got bigger problems than a bidding war - you need to analyze your campaign(s) from the ground up.
The point is you really need to test all the positions to know which is best. It may be #1, may not be. As you say its your own business I guess you are the only one advertising with that domain name, so theres nothing to stop you lowering your bids now and raising them again later.
This is what happens when you get into a bidding war for #1, as mentioned before its not normally worth it unless you scare off the competitor, making him give up before the both of you go bankrupt.
Just try testing lower down the page, you can always jump back into the bidding war later if you want.
Just try testing which position gets best ROI. And split test some more ads, try and improve your quality score. And find more keywords and variations :-)
It sounds like your ad is not showing all the time. Are you sure that you're not bumping up against your daily budget?
Screw it.. I am not going to let this guy get away with it. I am going to beat this guy so badly that he will eventually give up! Question is, if I bid $10 for the keyword and after a while he gives up, does that mean that everything will go back to how it was before he was there?
If you are bumping against your budget I would seriously consider dropping your bid to maximize the visitors and exposure. Would you rather have 10 visitors a day at $10 each or 1000 visitors at .10$ each?
Also, make sure you are testing other ad copy to find better CTR. Ad placement isn't based only on your bid when it comes to adwords. He could be spending much less than you if he has a very good CTR.
Let's say that he stays away, does that mean that I will still spend all of my new (and very high) budget, or will it all come down again?
If I were you, which I am not and I know nothing of your site, I would back off big time, drop my bids instead of rising them and at least test the waters at number 3 or 4.
It sounds to me like you have never done that and it is something at least worthy of a test. Possibly your clicks/impressions will decrease quite a bit, though maybe not. But the cost difference between these positions and the top one can be quite significant and result in vastly improved ROI. It also makes your budget go a hell of a lot further.
Engaging in a bidding war like this can be like cutting off your nose to spite your face.
Think about it. Good luck!
I used to be concerned with having one of the top two spots, but then I started looking at the ROI I was getting and also the competators I had. In my case of a full page of ads, there are usually only two or three of us that really are selling the items people are searching for. The rest of the ads, usually the big spenders since this is a fairly inexpensive niche, are general widget sites and the stupid price comparison sites that don't deal in the secialized niche widgets that the search is on.
The big upside of this the that I do not have to spend huge amounts of time monitoring my Adwords. I check it a couple times a week just to verify that everything is generally on the first page of results and the conversion ratios and other reports seem to match what I expect from the orders coming in. After all, time is worth a lot too, and it is better to spend the time making money (product or other site activities) than wasting it increasing your costs in a bidding war.
- the second bid pays much less than the top bid provided that the third bid does not join in,
- the second bid can set a price on how much the first bid should pay,
- the top bid is the first to get burned.
I dunno about that. I think it depends on your CTR.
I successfully won a bidding war, and my CPC went down, not up, once I got the top spot.
But you have to have a better ad and a better CTR for this to work.
My experience has been pretty consistent in that the higher my ad goes, the higher the CTR and the lower the CPC. My actual bid price seems to have little to do with it, other than helping to drive the ad to the top.
I had one campaign where I was bidding .81 and paying .10.
The #3 argument is interesting, but I don't have that choice. Affiliate. Gotta be #1, or don't get displayed in most cases. I am going to experiment with my own web site, which would allow me to be #3.