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Variation problems in CPC caused by changing max CPC

Is google charging you more because you are willing to pay more?

     
4:31 am on Jan 13, 2006 (gmt 0)

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So here is how the ads looked:

1. me maxcpc = $3 actual cpc $.02 8K clicks with %50 ctr
2. ad2

A new competitor came along a took my spot, so I increased my max cpc to try to force him to lower his. This change seems rather big for a few hours of lower CTR. 8K at %50 isn't exactly easy diminish:

1. ad1
2. me maxcpc = $10 actual cpc $.29
3. ad2

I lower my maxcpc to $.10 because $.29 isn't worth it. I expected WAY lower based on my solid history.

1. ad1
2. me max cpc = $.10 actual cpc .07
3. ad2

How can I be in the same positon, yet when I lower my max cpc it lowers my actual cpc. It's like google is charging me more just because my max cpc is higher. I'm in the same spot yet my cost is differing based on my max cpc. I only advertise in US on google. No content network or anything else.

Google's help video says my cpc is .01 higher than the maxcpc of the person below me, divided by my quality score. This does't seem to hold true here.

I highly doubt that ad2 is changing their prices exactly when I am.

I think that google is charging me more simply because my bid is high. If this guy wants to bid $10, he chouldn't mind only paying .29. If he changes it to $.10 we obviously can't charge him $.29. If he asks us about it, we can just tell him it's very dynamic and his competition is propbably changing bids. He can't prove otherwise.

The dynamic and competition part is just about how ever call I make ends up. Same answer to any question.

4:43 am on Jan 13, 2006 (gmt 0)

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What you are posting does not sound kosher. Has the guy in ad2 been there for a long time, so you have some history with him? Also has your CTR dropped in the #2 position from the #1 position. If it has that could have something to do with higher click costs, but your raising your bid should not raise your price. Especially since it already was high to begin with. I would take this up with an account excecutive at Google and have them investigate this. Please report back what you find out.
6:27 am on Jan 13, 2006 (gmt 0)

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ad2 has been there a while. yes my ctr has dropped, but nothing that could really destroy my already high ctr.

does changing the ad hurt a lot? all i did was remove an 's' from the display url. I dont see how this could hurt relevancy of the ad. all other text was 100% the same.

I have made changes before and it didn't affect my cpc at all. even if it does affect quality a lot, my fluctuation occured after it had been changed. fluctuation with the sam ead. not two diff ones.

[edited by: wedouglas at 6:39 am (utc) on Jan. 13, 2006]

6:32 am on Jan 13, 2006 (gmt 0)

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I'd also like to ad that it isnt fair to cap max bid to $100.

It can very easily lock up a number 1 spot.

8:38 am on Jan 13, 2006 (gmt 0)

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I've also noticed something hinky with google's pricing. I started a new campaign and added a list of keywords - I put my min bid at .20

Google said that I needed to raise my min bid on all of these words to $1.

I erased all of the keywords, and then put them into their own campaigns, and set the min. bid to .01

Then Google set the min. bid to between .04 and .10 for the very same words.

There are only 2 explanations that I can see. Either - like you said - there's a variable set for the amount you bid for a word, or there's a variable set for the amount of words you have in a campaign.

11:05 pm on Jan 16, 2006 (gmt 0)

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I just did another test and the same thing happened.

My min bid was .04 and my actual cpc was .04 when I was bidding $4.

When I bumped my bid to $10 is shot up to .20 even with no competition below me. Just the same ads in the same position. I think this is definte proof they Google isn't calculating cpc how they claim on their help site.

I'm going to have a talk with them tomorrow about this.

11:45 pm on Jan 16, 2006 (gmt 0)

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So the "workaround" as I read it is:
-bid .01 cent
-one keyword per campaign
11:54 pm on Jan 16, 2006 (gmt 0)

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Adwords CPC prices are out of control and vary greatly from day to day in my industry.

It's craziness! CPC prices are up I'd say 75% since the changed the algorithm what was it...6 months ago?

The same terms, at the same position, changed by a couple of dollars a click from Tues to Wed. There is no way to anticipate what you will be charged on any given day in my industry.

Google is getting WAY too greedy here.