Welcome to WebmasterWorld Guest from 3.93.74.227

Forum Moderators: buckworks & eWhisper & skibum

Message Too Old, No Replies

Problems with a bidding war - seriously worried

     
7:15 pm on Jan 12, 2006 (gmt 0)

New User

10+ Year Member

joined:Apr 14, 2005
posts:40
votes: 0


I have been a adwords client for 12 months and I am still lost.

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.

QUESTIONS:

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?

Lastly:

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.

Thanks

7:27 pm on Jan 12, 2006 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:Aug 29, 2003
posts:944
votes: 0


In my experience fighting and paying over the odds for the top spot is not often worth it, but a lot depends on what the return to you is.

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.

7:42 pm on Jan 12, 2006 (gmt 0)

New User

10+ Year Member

joined:Apr 14, 2005
posts:40
votes: 0


There is a direct relationship between my clicks and ROI. I know what happens when someone hits my website. If my clicks go down I get seriously worried because it has a direct impact on my ROI. I assume you mean positions 3-5 on the RIGHT? I have never tried this, hence my question. Are those guys in the middle getting much less CT than I am at the top? Is it more important to be active ALL the time and get impressions rather than be active for a limited time (due to budget restraints) but be at the top?
7:50 pm on Jan 12, 2006 (gmt 0)

Preferred Member

10+ Year Member

joined:Feb 28, 2003
posts:375
votes: 0


I generally aim to stay in the 3-4 spot or so, and my CTR exceeds 9% on most days.

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.

8:05 pm on Jan 12, 2006 (gmt 0)

New User

10+ Year Member

joined:Apr 14, 2005
posts:40
votes: 0


I agree. Some things are still a mystery purely cause i dont have the time to do it. Hence my question: Is there anyone out there that can/wants to help me and what will it cost?
8:17 pm on Jan 12, 2006 (gmt 0)

Full Member

10+ Year Member

joined:Dec 4, 2003
posts:233
votes: 0


Well there are certainly companies which can manage your adwords and keep your ads at a certain position, but I think you need to test different things first. As others have said you may find the reduced ROI is better in positions 3-4 even with the reduced clicks, simply because the cost is so much less.

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.

8:35 pm on Jan 12, 2006 (gmt 0)

New User

10+ Year Member

joined:Apr 14, 2005
posts:40
votes: 0


why is it that I can bid $7 and my actual CPC is much less?
8:42 pm on Jan 12, 2006 (gmt 0)

Full Member

10+ Year Member

joined:Dec 4, 2003
posts:233
votes: 0


You only pay a small amount more than the amount paid by the ad below you. So it might take $7 to beat the #2 ad, but you actually only pay a little more than they are paying.

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.

8:45 pm on Jan 12, 2006 (gmt 0)

New User

10+ Year Member

joined:Apr 14, 2005
posts:40
votes: 0


Ok... so I can bid $20 and I will still only pay what I paid previously unless he ups his bid?
8:52 pm on Jan 12, 2006 (gmt 0)

Full Member

10+ Year Member

joined:Dec 4, 2003
posts:233
votes: 0


Best not to get into bidding wars, done it myself - briefly. In theory you should only pay a little more than the next person down, but what if someone comes in at $10, you will suddenly be paying more than them. Lots of scope for disaster.

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 :-)

8:56 pm on Jan 12, 2006 (gmt 0)

Senior Member

WebmasterWorld Senior Member jimbeetle is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

joined:Oct 26, 2002
posts:3295
votes: 9


The one thing I'm curious about is "impressions have seriously declined." If everything else is status quo, e.g., user behaviour, number of searches, etc., then if you still have the top spot your impressions should be the same.

It sounds like your ad is not showing all the time. Are you sure that you're not bumping up against your daily budget?

9:04 pm on Jan 12, 2006 (gmt 0)

New User

10+ Year Member

joined:Apr 14, 2005
posts:40
votes: 0


Yes, I am bumping up against my budget. That's the problem. When i started my ad showed all the time for much less. Everything was great. Then the cost started increasing. I kept up and stayed at top. Eventually it got out of hand and i slipped to #2. Then the ass*** stole my as copy and my clicks dropped. The impressions remained the same. I am now paying MUCH more for MUCH less.

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?

9:21 pm on Jan 12, 2006 (gmt 0)

Preferred Member

10+ Year Member

joined:Jan 28, 2005
posts:614
votes: 0


Before you continue escalating the bid I would seriously consider testing your ROI at Position 2+. I NEVER bid for top spot the ROI at 3-4 has turned out to be the best ROI for me in most cases.

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.

Freq---

9:27 pm on Jan 12, 2006 (gmt 0)

New User

10+ Year Member

joined:Apr 14, 2005
posts:40
votes: 0


Ok, thx. I will do that. I have however allreay increased my bid and doubled my budget. Just to see what happens. I am now on top and he has dissapeard?!? Don't know what that means. Did he hit his budget ceiling, or does it have something to do with my higher bid?

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?

9:55 pm on Jan 12, 2006 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:Oct 8, 2002
posts:657
votes: 0


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!

That's probably what he is thinking.
10:00 pm on Jan 12, 2006 (gmt 0)

Senior Member

WebmasterWorld Senior Member jimbeetle is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

joined:Oct 26, 2002
posts:3295
votes: 9


Yeah, once you get into a heated bidding war it's sometimes a "never go back" situation. If you can be satisfied with whatever ROI you get at a high bid -- and be satisfied that you beat the other guy -- well, then go for it. On the other hand, the advice of sitting back a few slots behind, getting much more exposure, more clicks, more sales at a cheaper CPC, sure does sound like pretty solid advice.
10:02 pm on Jan 12, 2006 (gmt 0)

Preferred Member

10+ Year Member

joined:Nov 8, 2005
posts:402
votes: 0


Have you gone to your competitors site, to see if he has a certain conversion price he receives. If he's making big profits, then you may not want to try and win this game by out bidding him. I would just tweak you own campaign so that it's the most profitable for you, and just hope that he is not as good as you at budgeting his money.
10:11 pm on Jan 12, 2006 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:Aug 29, 2003
posts:944
votes: 0


Yes, I did mean on the right.

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.

10:17 pm on Jan 12, 2006 (gmt 0)

Junior Member

10+ Year Member

joined:Oct 12, 2005
posts:100
votes: 0


If you are in a bidding war, you better monitor your costs constantly and set very low but expectabl budgets. Vary it as the day goes on. You don't want to get burned at $10+ per click. It sucks bad to wake up and find a huge costs with %5 of the traffic.
10:19 pm on Jan 12, 2006 (gmt 0)

Junior Member

10+ Year Member

joined:Oct 12, 2005
posts:100
votes: 0


One more thing. If the competitions wants to bid $7 on something that may only be worth it at half that price, why not set you bid to that ammount and just burn a hole in his pocket. If it truely isn't profitable, he'll drop it sooner or later.
10:33 pm on Jan 12, 2006 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:Dec 31, 2003
posts:1091
votes: 0


Just to remember in a bidding war that:
- 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.

Think about it. Good luck!

10:52 pm on Jan 12, 2006 (gmt 0)

Full Member

10+ Year Member

joined:Nov 20, 2003
posts:329
votes: 0


I'll add my two cents in for the just step out of the bidding war. Top spot is nice, but is it really that much of an extra number of clicks that it is worth extra high CPC and more important the time? If you are not constantly showing because of budget problems, then there is a good chance that a constantly showing ad in a lower position would generate the same number of clicks (or more) at a much lower CPC. This will also mean that you Return on Investment (ROI) is going to be better since your costs are less.

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.

2:37 am on Jan 13, 2006 (gmt 0)

Senior Member

WebmasterWorld Senior Member jtara is a WebmasterWorld Top Contributor of All Time 10+ Year Member

joined:Nov 26, 2005
posts:3041
votes: 0


- 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.