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His cost for a ppc term is now only .60 cents for the #1 position where my cost for the same #1 position would be $3.60 because I am a newbie. Is this true. That over a 6 month period google lowers the cost of ppc to their big spenders - and what is the definition of a big spender to acheive this great savings over time?
No, what your competitor told you isn't true.
What he's actually talking about is Quality Score - a better Quality Score means better positions for lower costs - and a good Quality Score doesn't necessarily take 6 months to achieve.
Quality Score is based around:
Relevancy - followed through account structure (down to keyword level), to ad text, to landing page.
CTR - the major factor here - a good CTR compared to your competitors is essential to build a good QS. However, CTR isn't measured over just 1 / 2 impressions - it takes a fair amount to be measured for QS - which does mean that usually you need to bid quite high at the beginning just to get good enough positions to build a CTR rate
Landing Page Quality - I usually make sure I have a landing page geared to each ad group.
Account history - you don't have this yet so no need to worry about it
Keyword - when you first start off you'll be assigned an initial QS - this is usually based aroudn your other competitors on a KW - i.e. if everyone has a low QS then you may well start off with a 2. I've started with anything between 2 and 7 before.
Organics are great and are definitely more profitable than PPC - BUT PPC is also very profitable (for the accounts I manage anyway!), and you may as well not lose out on the profit that is there to be had.
On top of this, PPC and SEO work very well together and each one can help to drive the other...
My suggestion to you would be that if you have a good budget then you should get a PPC manager involved - adwords can be can be a great way to make a lot of money, but equally it can be a great way t lose a lot of money quickly.
If you're on a smaller budget then read as much as you can on these forums and the Google guidelines and then start off quite small until you get the hang of things...
So you are saying the CTR is the key. Need to develop a good CTR. And Google will charge me only i.e. 60 cents for a #1 position in time vs. a newbie going for the same #1 position for the same keyword but the newbie will be charged $3.60?
I understand there are other factors. I am just amazed how much of a difference 2 different people can pay for the same positition/keyword!
Account history - you don't have this yet so no need to worry about it - how does this help?
CPC x QS = ad rank
Therefore, to achieve a higher ranking you can either improve your quality score or increase your max CPC.
Due to many moving factors, there is no way to say definitively that if you get to X quality score you will only pay Y.
You actually pay for each click individually, yet you see in your account what the average CPC of all those clicks were.
For instance, your performance in a specific geographic region comes into play. Therefore, if you did very well in New York, and poorly in San Francisco, you could pay $0.30 for a click from New York, and $0.70 for a click from San Francisco giving you 2 clicks for the cost of $1 or an average CPC of $0.50.
I don't know about 60cents Vs $3.60 for the same position - I guess it's possible, but the difference in amounts per click can definitely add up - especially if you have a lot of keywords and / or they're high traffic keywords
Also, just as eWhisper says, 1st position isn't always necessarily the most profitable...
The text on the landing page isn't unique - could that be the problem?
Doesn't look better, but if that what big G wants....
Now maybe I can get the ads to actually run (without going bankrupt paying $3+/click) and hopefully get a good CTR - which can improve the QS futher.
The best way to improve your QS is to increase your CTR, but if you're convinced it's your landing page try:
Including your best keywords from the relevant ad group in your metatags
Include the keywords in your content (what you've already done with the H1s is a good idea)
Get a couple of links with these keywords fired into the landing page - it'll help your seo but Google does include this in landing page QS (a bit)
Also - where is Google telling you you need to improve your QS - i.e. is it saying your landing page Quality is low?
However, there is not 'good' and 'better' landing page. There is relevant and non-relevant.
In the ad group you are trying to optimize for quality score, however over the icon that brings up the quality score info. Do this for a handful of keywords (usually your lowest QS, highest spend, and highest converting words) and see if Google tells you the landing page is relevant or non-relevant.
If it's relevant - don't worry about the landing page.
If it's non-relevant; you need to fix the page before raising your CTR will do you much good.