Are you monitoring your minimum CPC?

Keep an eye on your quality score

[hooloovoo22]

If you're not monitoring your min. CPCs right now, you might want to start.

I'm starting to believe that it's a good indication of your Quality Score and where you're trending. If that's the case you might be able to use that knowledge to your advantage:

We know that:
Ad Rank = CPC X Quality Score

If min CPC is dropping, it gives you an idea that Quality score is on the rise. Balancing out that equation, it should mean that you can essentially drop your max CPC while maintaining the same ad rank. The drop in average CPC should happen naturally with Adwords' algorithm, but in practice I've found it needs a little help.

I dropped my max CPC by 40%, saw my realized CPC drop by 30% and maintained the same avg. position.

I encourage everyone to test on their own. Check your minimum CPCs regularly, if they're dropping, but your actual CPC isn't dropping, try helping the system out a little and you may be pleasantly suprised.

has anyone else tried adjusting max cpc based on min cpc and tracked results?

[sore66]

What do you mean by helping the system out a little?

[tclcorp]

Yes HooLoo....I think you're right on. Although I'm fairly new to AdWords and the whole PPC thing, I noticed the very thing you're talking about just the other night. I had BOTH a Local and a Regional Campaign for about 6 mos. (I know, bad move as they "played" against each other for CTR, but I learned). Anyway, when re-vamping my whole Local campaign the other night to use that ONLY now, I noticed the Min. CPC for the exact same keywords were different (lower) then they initially had been. And, when I ran an "Estimate", the Max. CPC could infact be changed to a lower amount since initially setting up the campaign. In other words, I wasn't watching my min. CPC close enough and probably could've saved some $$ while maintaining my quality score and ultimately my CTR. And, it does seem to "help the system along" when you make those adjustments....at least from what I can tell.
Just my **0.02 worth :)

[hooloovoo22]

What do you mean by helping the system out a little?

you're right. that statement may be misleading. If your quality score increases, an adwords rep will tell you that will bring your cpc down, and I have seen that, but it's pretty slow to happen. Changing the max CPC will change things much quicker.

Let me clarify a little:

Quality Score & Max CPC
We don't know our quality score. But we do know that if it is increasing (by looking at min. CPC) that we don't have to have the same max CPC to maintain the same ad rank. We don't know the actual weighting of that side of the equation, but we know there is some relationship that we can test.

Max CPC & Actual CPC
We also know that max CPC has an effect on actual CPC, in that when max CPC increaes your actual CPC will most likely increase.

thus. if quality score is in fact increasing(which you get by looking at min. CPC) you should be able to decrease your max cpc, maintain your ranking, and pay less.

ymmv.

This is definitely important if there are few bidders or you are bidding top placement.

**also worth noting again is there are WAY TOO MANY variables to try to get any exacting information. We don't know what we don't know. So all we can do is test and see where our lowest max CPC keeps our ad rank the same.