Let’s say that you have a friend in the same industry as you. You decide to get together and compare Minimum CPC bids, Max CPC bids, Average CPC, Average positions and CTR. All Campaign settings are exactly the same.
Say my friend noticed that on 1 keyword he had a lower minimum CPC, a higher Max CPC, a lower CTR % and a lower Average CPC in comparison to mine.
Example of friend’s stats:
Min CPC bid = .10
Max CPC bid = 2.50
Average CPC = .75
CTR = 1%
Average Position = 1
Example of my stats:
Min CPC bid = .40
Max CPC bid = 2.00
Average CPC = 1.50
CTR = 3%
Average Position = 3
What is my friend doing that would cause him to have better ad position and lower CPC. I understand that quality score comes in to play here, but would it play this much of a significant role? I know it plays a role, but how much, I do not know.
With regards to my site and my friends, I can say I just launched my site and campaign (for a couple of months), but my friends site and campaign has been actively bidding on this keyword for years. I am not a math expert, but I do know statistics very well and I am wondering if the differences have more to do with LONG term CTR causing a lower CPC. I ask this because as you can see from the above example, the short term CTR for my friend is 1%, (lets say a month) but if he trends his CTR over time it would be closer to 3% for the year.
I lean more towards that because my friend has a long time of AdWords data to compare things.
For example, he told me that he went back quite some time and trended the data and the CPC has been consistent for an 18 month period, yet 9 of those 18 months he used a home page for the default URL and the later 9 months he created a landing page specifically for that segment. If the quality score was included, would he not see a possible reduction of cost because of that? From that point of view I would think that the issue I see has less to do with the quality score and more to do with long term CTR. Just for the sake of debates, lets say that all ads are similar, landing pages are also similar enough to merit no difference in the quality score.
I am kind of new to AdWords as I have always been an organic seo, so if I am missing a big piece of the puzzle, please let me know. I just want to find ways to reduce the costs and I have been doing that, but this one has me stuck thinking that long term CTR plays the largest role in average CPC.
I could really use some help with this please.
Thank you
Yes everything is similar enough to merit no major discrepancies.
When looking at it I am a little confused, I did some more reading up on it and with regards to the "quality score" factor, his is OK, and mine is OK. Yet the min bids are different.
I have identified a few keywords on seperate adgroups and in every case, I am paying 4-9% more on my average CPC. Not to mention that the minimum bids across the board are higer for me.
I even have a couple that say my quality score is better "great" in comparison to my friends "OK" score. However, in that case I have a lower min bid, and I also have a lower Max Bid, than him and yet he stiil has a lower average CPC than mine. Why?
The only tangible difference is long term CTR compared to short term CTR determining the average CPC. Don't get me wrong, I can qualify other things in to the equation, but if we can rule them out with a good level of certainty, then it could only be a couple of things.
I know i am asking some simple questions, but I am kind of new to AdWords and I just want to minimize cost and maximize conversions within the account.
Thanks again for any input. :)
