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Why is it so hard to compete with a new account/site?

7:36 am on Jan 31, 2008 (gmt 0)

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WebmasterWorld Senior Member 10+ Year Member

joined:Apr 18, 2003
votes: 0

Why does Google make it so hard to compete with a new AdWords account and/or a new site? I just don't see how it benefits their business, their advertisers, or their users.

Here's a specific example. AWA if you're reading this, I would LOVE to get your input on this.

I have 2 sites in the same niche. The sites are totally unrelated to each other, but target the exact same audience. I have an AdWords account for each site, with exactly the same structure and exactly the same keywords.

The difference is that Account/Site 1 has a little over a year of history, and Account/Site 2 is just a few weeks old.

Account/site 1: [specific keyword phrase]

Over the past 7 days it has the following stats:

Quality Score: Great
Minimum Bid: $0.03
CTR: 3.04%
Avg CPC: $0.91
Avg. Pos: 5.6

Account/site 2: [specific keyword phrase]

Over the past 7 days it has the following stats:

Quality Score: Great
Minimum Bid: $0.04
CTR: 2.71%
Avg CPC: $1.31
Avg. Pos: 5.7

In my extensive experience, a CTR of 3.04 vs. 2.71 does not make a huge difference so I can only assume that the 44% higher Avg. CPC for the exact same keyword in the new account is due to just that, the fact that it's a new account.

The thing is, even in the new account this is based on 1000s of impressions and 100s of clicks, which is plenty of "history" based on my understanding of how that works.

So what am I missing here? How does this benefit anyone? I operate on about 25% margins so I'm losing money right now, when I should be making plenty of money. I just don't know what to do at this point. At some point I need to pull the plug, and then both G and I will lose money unnecessarily.

Is there anything I can/should do?

I find it hard to believe that such a sophisticated system would just have a blanket penalty on new accounts across the board, so I'm hoping there is *something* I can do, and I just need to figure out what it is. (This situation is the same across all my keywords - everything in the new account is roughly 40-50% higher CPC).

I just don't get it. I'm a semi-sophisticated AdWords user who has spent millions on AdWords over the past 5 years. I've also made a ton of money for myself. I know there are plenty of bigger fish out there, but surely I'm in the top 1 or 2% of AdWords spenders. Why is this so difficult?

In any other type of vendor/client scenario, given this same type of situation I could simply call the company, let them know who I am, remind them of my track record and past performance, and they would press a few buttons and put a stop to this.

Anyway, just frustrated. Does anyone have any input for me?

Do I just wait this out and at some point my bids will just start dropping slowly over time? Any idea how long it takes? Why doesn't Google give us any clue what's happening in situations like this ... I just don't see any benefit to keeping serious advertisers in the dark and making it so hard for them to make money. I mean, I'm launching a few other sites in the next few months and I'm seriously considering just not even using AdWords because this is such a PITA and very frustrating.

5:24 pm on Jan 31, 2008 (gmt 0)

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10+ Year Member

joined:July 12, 2006
votes: 0

Why is it so hard to compete with a new account/site?

I have read in one of the google quality score patent applications that they purposely keeping your quality score low with new account/sites. Reason: "To have advertisers prove themselves." What overpaying proves to google is mind-bugling. And unfortunately how google calculates the length of this penalty period is unknown.

The worst experience i had: i was bidding $3.00 and paying .30c actual for two month being always last ad on the page. 2 month later i am number #1 with actual of .33c i think it is big difference .30 in position 7 and .33c in position 1.

5:43 pm on Jan 31, 2008 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:June 2, 2006
votes: 5

Chinara: would you have a link to that about patent?

Chinara's experience proves that the moment you think you have it under control may be just a second away from the moment when all that evaporates into the air - and you stay puzzled. Nobody would ever think that such difference in position and CTR can result in almost the same price of cost per click.

Within the last three months:

I had cases with new sites and new accounts. CPC for positions like 4 or 5 were up to $15 – financial market in UK – name of the actual company, not general financial keywords. It was hard for me to determine if it was the competition or Google that was making the price that high. If it was general term, I would opt for competition. Here I think it was Google. I never got it to work.

I had cases with old sites and new accounts – old site was doing great in old account. The switch had to be made because of currency change. Awful time we had, I tell you. It looks bit better now from the perspective of QS, but prices are still quite up compared to the old account.

I wonder if have to start grabbing competitors’ ads, links, and keywords and run them form our accounts, just for the sake of seeing what they pay. Not sure how ethical or unethical that would be. I personally don’t like it.
Still, with all that knowledge, you probably would not be any smarter as you would be back to your site that you have a trouble with (on AdWords).

Sorry for not having more than this long talk with no right hint.

Practically, depending on your budget, you can wait, work on your site, play with bids (reduce or increase and watch the effect over the certain period of time). With bids, sometimes, if you bid $1 and pay $0.85, you may find that you’ll get the same position and same CTR with bidding $0.82 and paying $0.71. This is not true in all cases, and it may depend on Google’s recent algo update where they started considering your bid more than the one below you.

4:15 am on Feb 1, 2008 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:Apr 18, 2003
votes: 0

Anyone else have any input?

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