How does Adwords bidding work

Need some help on CPC v Position..

[richardvanhooijdonk]

I am newbie in using Google Adwords. So maybe you guys can help me. When I enter my keywords, I see:
- positions
- cost

Playing with those lead to another pricing. In a few articles a read that position 1-3 on important keywords are very expensive. So I should go for 3/4 or ...

But how can I keep track of bidding prices and positions. Should I login everyday and change bidding to keep my positions or is there a tool available that can help me with that.

I will use German Google the next months. And from the beginning of next year US/English/Australian and Canadian google.

What do you professionals advice me.

Thanks,

Richard

[edited by: Shak at 4:09 pm (utc) on Aug. 10, 2003]

[Wired Suzanne]

Google calculates your position from your CTR. Consistency is very important. Don't play with your bids. Don't play with your ads.

The higher your CTR, the better position you can get for less money. A good CTR gave me a better position, which gave me a better CTR, which gave me a better position......

One suggestion: I created an extra campaign just for testing some ads and checking on numbers of impressions.

[hannamyluv]

Adwords does not have a tool to help you with bidding, but it isn't all that necessary to login daily to tweak your bids. We change our bids about once every two weeks and that is just fine for us. You may want to do it a little more often if you are in a competative field.

Your position is calculated on CTR X Bid= Position. You won't affect your CTR rank number (The first part of the formula) by changing your bid so feel free to change that as often as you like, but you will have to start the CTR rank over if you change the ad, so you should only do this with that fact in mind. Actually, if you think you need to change your ad, I would reccommend that you run the old ad and the new ad at the same time so that A) you can see which one really performs better and B) when you do decide, the better ad will have a built up CTR rank.

As to which position you should aim for, well, it isn't so much of a solid fact as much as what can you afford with your ROI. If you can afford #1, then by all means go for it. 1-3 are the best positions for the most part. If you can't afford them, don't take them. 4 & 5 do have their advantages such as the clicks you get will be a more interested party, less junk clicks, so you get more value out of those clicks. Any lower than that, and it might not be worth the time, although you do only pay for clicks that you get, so it can't hurt.

[edited by: hannamyluv at 3:31 am (utc) on Aug. 11, 2003]

[buckworks]

It's important not to overbid. You need to know how well your traffic converts to sales, on average, so you can calculate your breakeven point for bidding on clicks.

Set your maximum bids far enough under your breakeven point that there's a reasonable percentage left in your pocket after you've paid for your advertising. Decide what is cost-effective for you, and take whatever positions you get for that amount. If it's top of the heap, great, but if it's not, don't worry about it. Set your bids according to what works for you, not according to what others are paying!