Google Discounter and audits

Questions on per click amounts and legal advice

[mastervisa]

A friend wrote to me asking me to find out the following. He is a distributor for a new product and now has another person under him. They both have sites up and both are using Adwords. Here is what he wrote, I edited it for TOS.

"Google AdWords charged me 40-70 cents per click for “keyword1”. Ken paid 11 cents. His ad was #2, mine was #1 and there was no other ads. Our click through rates were about the same. I’ve exchanged 4 or 5 emails with Google and they keep saying their Google Discounter won’t allow me to be overcharged. In all of the emails I asked them to audit my account. (I think I got screwed on a lot of key words)

Their last email said they audited and there was nothing wrong. The other week, Google hit my check card for $229 and I still owe them $50. Overture hit me for $100, which made my PPC balance $130 to the good. Is there a government agency or attorney that can do something about Google AdWords? The next time you’re at Webmaster World can you find out?"

Anybody have any answers for him? I don't use Adwords and I know nothing about it. Thanks!

[ugamis1]

"Our click through rates were about the same."

For what keyword? Keywords go beyond what you see in whoever it is's account. It is possible that a 'broad match' term is showing up exclusively as an exact match for one person but a broad match for another and the resulting CTR would be skewed. Just one thought of many, as to what is percieved is not always the case.

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"Google AdWords charged me 40-70 cents per click for “keyword1”."

If whoever it is unwilling to spend 40-70 cents for a click, do not bid that high.

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"His ad was #2, mine was #1 and there was no other ads."

There is no way for whoever it is to know this. It is possible there are competitors that target their ads geographically that excludes whoever it is from viewing them. It is possible other advertisers had ads out when your client was not looking for them.

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"In all of the emails I asked them to audit my account. (I think I got screwed on a lot of key words) Their last email said they audited and there was nothing wrong."

So they performed an audit, I will assume in good faith as most businesses do infact wish to act in good faith. They found nothing wrong. Are whoever it is unhappy they performed the audit as requested or just unhappy the results did not turn out the way that was hoped.

[mastervisa]

thanks for answering. I think he didn't like the way the audit came out. Does Adwords not have a feature like Overture where you only pay .01 over the ad under you?

I know that "keyword1" is a pretty obscure term he was bidding on, although it is the name of his company. And it's another name for the product he sells. Could be a broad match thing like you said.

I'm going to give the thread a day or two then email him the responses. Thanks again!

[buckworks]

Adwords will discount your click price so that you only pay 1¢ more than what the one under you BIDS, not what he/she pays.

So, if A bids 50¢, B bids 49¢, and C bids 10¢, A will pay 1¢ more than B's bid, and B will pay 1¢ more than C's bid. In this scenario B gets a bargain. However, if A dropped his bid by a couple of cents, B's costs could quadruple instantly when he was pushed into first place, 1¢ above a 48¢ bid. If B was bidding 49¢ because he calculated that traffic at that level would still be cost-effective, he'll be okay. If he was bidding 49¢ just to play competitive games against A, he might lose a lot of money in a hurry.

When setting your bid levels, it's wise to assume there are more bidders in the rotation than you can see in a spot check.

Never forget Ugamis1's advice:

If whoever it is unwilling to spend 40-70 cents for a click, do not bid that high.

[mastervisa]

ugamis1 and buckworks: good stuff, and thanks. At first I was worried that I might not be able to give him any help or advice. I've used Overture, but not Adwords. Anybody else?

[eWhisper]

[webmasterworld.com...] msg 11

has some good detail on CTRs and paid CPCs.

If you can absorb the post, it'll answer your question in pretty good detail.

[FromRocky]

I agree with ugamis1 but just to emphasize on a couple of points:

1. This is AdWords not Overture. It's not based on 1 cent as Overture but based on the Ad Ranking number. For more information, follow the link:

[webmasterworld.com...]

2. No body know the actual CTR except Google and (may be) the owner himself.

3. My advice. Reduce the max. CPC to 5 cents. There are two ads for the search query. The first ad costs 50 to 70 cents while the second is 11 cents as you mentioned. If your friend bids at 5 cents, the actual cost will be 5 cents (or higher) for his competitor and 5 cents for the second ad (your friend's ad). The difference is 10 to 14 times smaller. Your friend will reduce the cost from $220 down to ~$20 for the same number of clicks. Tell your friend to improve his ad-copy so that one day his ad will jump to the top position.

<<eWhisper, you beat me again. I should learn how to type it faster>>