Google says that they only make you pay .01 cent over the next bidder down for your position. Given this info, I would think that the only reasons you would want to adjust your KeyWord bidding would be:
A.) Adjust bid to test different Ad positions for ROI
B.) Some people adjust bid at the start to get an initial boost, and to get their CTR up.
C.) Lower bid on KeyWord or totally cut out due to performance.
Thoughts?
All the Best,
C.K.
I start campaigns relatively high, get a decent CTR then tweak downwards.
There are sometimes quite odd differences in ROI that you wouldn't expect between top results and the bottom, sometimes a lower place is better and sometimes higher.
Sometimes competitors have top three spots then you look at their ads and just know your market are more likely to click yours.
I think it is best not to setup a campaign then ignore it completely but I do not tweak bids every day.
Of course, I am way more paranoid now it is my money I am spending and not a clients ;O)
Google says that they only make you pay .01 cent over the next bidder down for your position. Given this info, I would think that the only reasons you would want to adjust your KeyWord bidding would be...
GuitarZan, the ".01 cent over the next bidder down" really isn't correct. The full story, often discussed and detailed on this forum, is considerably more complex. In actual fact it is quite possible for you to appear above another advertiser while actually paying less than they are.
This is because your position is not just dependent on what you pay. Instead it is equally dependant on the relevance of your ads as measured by your CTR. Basically, the higher the CTR, the higher on the page your add will tend to be.
Here is a quick formula for position. There are several great threads (that eWhisper could point you to in a hot second) that discuss this in more detail. I'll try to find them and post later with links. Unless eWhisper beats me to it!
Anyway, here is that brief formula:
Maximum CPC x CTR = rank number
Your rank number compared to that of all of your competitors determines position - and the higher the rank number, the better the position.
Within this context, changing your Maximum CPC directly influences your position on the page - and this is why advertisers adjust their bids.
Another good strategy is to try to improve the relevance (read: CTR) of your ads, as this allows you to appear higher for less money.
AWA
Thanks AWA. I am pretty clear on the Rank # thing, (I read your detailed post about it a little while ago, but I really suck at math).
I was just leaving CTR out for the time being. So I am basically right in that if we forget about CTR for the time being, or say you get a consistent CTR of 3%... The only reason people usually adjust bids is to test different positions?
Thanks.
All the Best,
C.K.
Just spend your valuable time improving CTR and conversions that usually does more for you than max CPC (although some markets are just more expensive/competitive than others but then CTR is an even bigger factor)
Ok, reopening this thread because I have one more question.
What I have gathered from here, is that once your campaign is humming along, there isn't really a reason to start messing around with the CPC's
Say I have a max CPC of 86 cents. I have had this from the very beginning to help get me a little higher in the initial rankings. My CTR has improved though, and I am now only paying 40 cents, but I have still left the CPC at 86 cents.
Is there any point in changing the CPC now?
Thanks,
C.K.
Is there any point in changing the CPC now?
Definately. Now that you know your conversion rate (or have some idea based on how many sales you've made - sometimes it's difficult to tell with affiliates), you know if you can afford to bid more (or less).
If moving your bid to $1 would bump you up a space or two, while maintaining a similiar conversion rate, then it would be more profitable. (IMO, the higher the position, the lower the overall conversion rate, but the higher number of total conversions - so need to test each position).
If you find out you're paying too much at $0.40 to make much money, then you need to adjust your bid downwards.
GZ, I will email you a spreadsheet to show what I mean but increasing your spend can increase your CTR but reduce your ROI, also reducing your CPC can reduce your CTR but increase your ROI.
Reducing my CPC on one campaign had no difference to CTR but incresed ROI - this was probably because I dropped from position 2 to 4
I have said this before and I will say it again, especially for people in our phase of the game (not quite acheived the bathrobe yet <g>) dont just take anyones word for it - TEST TEST TEST :)
(IMO, the higher the position, the lower the overall conversion rate, but the higher number of total conversions - so need to test each position).
I used to think the same way, but I'm not sure it's true. In certain markets I'm seeing an impulse buying effect. #1 premium position has the highest conversion and highest CTR.
My hypothesis about the relationship between rank and conversion rates:
boring consumable: decay curve
> most users do the fastest thing and get it over with. Some variance due to differences in how creative attracts various users, random factors, and some in-depth shoppers mixed in.
complicated, high-cost product: sigmoid curve
> shop till you drop, with different users having different amounts of stamina.
interesting product: linear
> keep checking sites as long as they're interesting to the user.
Where you want to be then depends not only on your marketing allowable and conversion rates, but also on your market.
In certain markets I'm seeing an impulse buying effect. #1 premium position has the highest conversion and highest CTR.
I see this effect with many 'phone book' businesses. Those that usually get their traffic from the phone book, and people are turning to the web for this info.
The last stats I read about phone book usage, over half of people do not call a second number in the phone book - the first ad that catches their attention is the one they call.
I belive this applies to several industries on the web as well.
The question is if this applies to people new to the web and still running unsophisticated searches, or if how people search phone books are searching the web the same way in general.
