How do I beat my competitors when they have higher money to bid?

[Kickedout]

Saw a report today and my site is 7,7 positioned in adwords. Many powerful competitors seems to be bidding high, they are big companies and as far as I can see, most interesting keyphrases requires up to 2,75 dollars per click to reach 1st position. It's ridiculous. Can't pay that in my niche, there's no way to aquire a positive ROI for me. I don't know how to they do but can't pay that much.

I thought on focusing in just a few keyphrases (2 or 3) where I have excelent QS, but and stop all the rest of key words, because those are the hotest (higher impressions) but still have to pay near 3 dollars per click and I can't.

My traffic is terrible even with organic results performing well, due to the Adwords ads avalanche. A 3rd place in organic, means some 22 competitors above without adwords...

Any ideas?

[SuperAffClub]

Being an affiliate you are going to see a smaller return than companies who offer the product direct or those who have negotiated a better deal. You need to look for a niche within your niche or use the competition to your advantage by bidding on their company names.

[buckworks]

Do not let competition cause you to overbid. Figure out how much you can afford to bid per click and stay under that level. If your breakeven point is not high enough to get your ads on the first page, so be it. Whatever you get is whatever you get.

One thing that often helps is to spend some time patrolling through your query reports, and also a keyword research tool, to look for unsuitable searches that should be blocked.

Anything you can do to weed out off-target impressions and clicks will make it easier for your ad campaigns to be cost-effective.

What kinds of followup systems do you have? Sometimes the competition can pay more per click because they're counting on future sales to the same user.

[SuperAffClub]

There is also the other strategy of bidding high to get a very high CTR and high QS so that your CPCs start to reduce over time. Also conversion rates are higher the further you are up the page.

[Planet13]

...use the competition to your advantage by bidding on their company names.

Is that even allowed?

Could I bid on the keywords "webmasterworld" or "webmasterworld.com" for example, even though I am not affiliated with them?

(not meaning to hijack this thread, but I created a thread a while back about this and never got any responses.)

[buckworks]

AdWords allows bidding on company names, but you can't (usually) use someone else's company name in your ad.

However, when it comes to affiliates, many merchants don't want affiliates bidding on their company name or variations, and an affiliate caught doing that might be kicked out of the program.

[Kickedout]

use the competition to your advantage by bidding on their company names.

useless in my case. Because those sells services I don't and serve in places I don't. I would be wasting my money if I do so to get clicks for people that doesn't look for what I sell.

Figure out how much you can afford to bid per click and stay under that level

Anything you can do to weed out off-target impressions and clicks will make it easier for your ad campaigns to be cost-effective

I sometimes try to optimize, but to be realistic, what I can earn doing such a time consuming task, just doesn't make my ads perform over my competitors, so in the end I'm not selling, and using my time to optimize and reoptimize again same unproductive campaigns.

I'm quite desperate at this point.
I'm doing it with no sucess at all. Because that doesn't bring me enough traffic that ends in sales. I pay what I can and that's not good enough.

[LucidSW]

>> strategy of bidding high to get a very high CTR and high QS so that your CPCs start to reduce over time.

That's not how it works. Bidding higher will get you in a higher position but the QS is calculated based on relative CTR for that position, not absolute. In other words, a poor ad will get a poor QS no matter its position.

>> Also conversion rates are higher the further you are up the page.

That's true.


Click prices in PPC are driven by market forces. You have to bid a certain amount to be where you want to be (at the top) because that's what that market dictates. Lawyer keywords for example are more expensive because it's worth it for them to pay $10, $20 or more.

Getting back to the higher up the ad is, the better the conversion, why don't you bid more to get there? You often don't pay that much more. What I mean is, doubling the bid doesn't mean a doubling in CPC. And the extra sales may make it worth it. What you have in your favor is your QS which you say is excellent (I take that to mean at least 7) which indicates you likely have the right keywords so no need to weed any out. If you're not willing to bid any more, then improve your ads, something you should always do anyway.

[engine]

You may already have done all this.

Consider looking at a budget, instead of every click cost.

Expect to get clicks that don't convert. It's always going to be like that whatever the form of promotion and marketing.

Look at the efficiency of the programs.
Try dayparting so that you're only using a budget and competing when it's best.

Invest more time in keyword research to make sure you've got every keyphrase, no matter how small the numbers.

Test ad efficiency by running different ads. Ditch the ones that don't perform.

HTH

[buckworks]

to be realistic, what I can earn doing such a time consuming task

I guarantee that one well-focused hour of negative keyword research would save enough money over time to be well worth the effort.

Trimming waste would mean you could afford to bid more aggressively.

improve your ads, something you should always do anyway.

Yes!

[RhinoFish]

buckworks, i second your guarantee!

[idolw]

>> Also conversion rates are higher the further you are up the page.

That's true.

Hal Varian from Google says conversion rates do not vary between positions. There are more conversions at the top, but the rates are more or less the same
Source: [adwords.blogspot.com...]
This is almost 3 years old so take it with a grain of salt.

[smallcompany]

I guarantee that one well-focused hour of negative keyword research would save enough money over time to be well worth the effort.

For this type of research, I create an ad group with either phrase or broad+ match (or both), and I check search terms from time to time. This helps with constant negative keyword addition. It also helps in discovering new potentials that can be put into exact match in other ad groups.

[LucidSW]

>> Hal Varian from Google says conversion rates do not vary between positions.

I'm going with what my data says, not what Hal Varian says. And my data clearly shows consistently higher conversion rates in the top positions.

[Kickedout]

I guarantee that one well-focused hour of negative keyword research would save enough money over time to be well worth the effort.

can you suggest a step by step to do that? Aren't reports of keywords just about your keywords on campaign?
If I only use phrase keywords and don't broad match, will I find ever a negative word ? My guessing is they will be none or very few.

And I'm not bidding on broad match since I think phrase keywords are more accurate and use better my low budget.

Should I revert that?

[carpedppc]

There are a few things you can do:

-Improve your landing page and split test for conversions so you effectively get more revenue for the same clicks, increasing your EPCs.

-Improve your ad copy and split test for CTR/Conversion rates to get a higher quality score and higher conversions (the two are not directly linked). This will also increase your EPCs and possibly lower your CPCs.

-Optimize your price points. Some price points obtain higher conversion rates than others (Eg. 50 vs 47). Although if you don't own the product you are promoting this could be tough.

-Optimize the backend of your system. Adding upsells, downsells and cross sells to get more value out of your customers. This will also let you pay more to obtain a new customer. Again, provided you have control over this.

[snoopy1122]

You absolutely must understand the competition.

Why are they outranking on adwords? Are the simply crazy or are the more efficient convertors with better profit margins. They'd like you to believe it is the former but usually it is the latter.

Here is a few questions,

1. Have you copied the ads of the top ranking sites? Do you know what CTR they get?
2. How does their landing page compare to yours? Can you try a landing page more like theirs?
3. Is there product offering different, is yours weaker (.....are you sure it is isn't weaker?) Maybe copy their offering to start with?
4. Are you pricing at a level where you can make a decent margin? (ie cheaper is often not better) Are you trying to compete on price when you could be competing on something else? Have you tried raising your prices?

After you've done all that can you firstly copy the competition, then once you've done that work out how to do better. Think like a Japanese VCR manufacturer, the aim shouldn't be to do something different initially. It all starts with at least being as good as the competition.

Also, the first reply mentioned "being an affiliate" but I didn't see any mention of the in the OP's post. If that is the case though then you likely have no chance as you'll never have a decent margin. Stop being an affiliate.

[KtoTam]

The process is quite simple, and it's been described by Google in the past.
Google is making money when people click on the ads. So, Google promote higher paying ads by moving them higher. Which doesn't mean higher bids, but higher ( bid x clicks ).
So, even if a merchant is willing to pay $5 per click and you agree to pay only 5 cents, in the end of the day it only matters who brought higher income to Google. In other words if noone clicked on that $5 ad for a week, but 1000 ppl clicked on your add, Google just got paid from your 5 cent ads, which was $50 from your pocket to Google's. So what Google does is she moves you above that $5 ad.

What's more is it sends more clicks your way, so Google wins again, while you might actually lower your bid to 4 or 3 cents per click and stay #1 !

P.S. A couple of years ago I actually experienced that. My old (very auld) ad that I forgot about, was #1, above all the merchants. Too bad the product was out of style by that time, so I killed the ad. I have no idea how long it took for the ad to reach #1 position, but I know for sure I used to pay 50 cents per click in the beginning just to be on the 1st page, but then it was just 7 cents and I was number 1.

[Kendo]

Do not let competition cause you to overbid.

How do you know that you are not being played off against them? I know what I pay for some keywords so when I see others placed higher and then see a weak product, I get suspicious... like how can they afford to pay such a high price if they are not making sales? How can some companies who don't even have a product for that keyword afford to pay $6.50 for a click though? How many freebies are given away to get advertisers riled up enough so that they increase their own budget and just blow more dough?

Or if I look at another one... knowing the percentage of visitors that result in sales, how can anyone afford to pay $2.50 for a click through when they are selling an iffy $25 product?

[snoopy1122]

Or if I look at another one... knowing the percentage of visitors that result in sales, how can anyone afford to pay $2.50 for a click through when they are selling an iffy $25 product?

How do you know the % of visitors that result in sales for them & how do you know what they are paying per click?

Just speaking generally it could be very easy for a competitor to get a false impression about this because often people base competitors results on their own.

Either they are crazy or you are missing something.

[Planet13]

Either they are crazy or you are missing something.

Could be both ;)

Seriously, it could be that they don't have someone competent managing their adwords campaigns and don't realize that they are losing money.

The other thing, as mentioned above, is that they might be losing money on the initial sale but that their follow up marketing is so effective with previous customers that they are able to retain them as a long term customer. Hence, the adwords cost is more than made up for over the "lifetime" of the customer.

[Digmen1]

@ Kto Tam

In other words if no one clicked on that $5 ad for a week, but 1000 ppl clicked on your add, Google just got paid from your 5 cent ads, which was $50 from your pocket to Google's. So what Google does is she moves you above that $5 ad.

What's more is it sends more clicks your way, so Google wins again, while you might actually lower your bid to 4 or 3 cents per click and stay #1!

Wow, that is very interesting!

But the trick is how do you do it ?

[LucidSW]

Tam is absolutely correct and can be easily shown with simple math, which he did, yet few people seem to realize. Google doesn't care how much you bid, it's how good the ads are, their quality. That's the whole idea behind Quality Score. The cream will rise to the top.

How do you do it? Again, Tam provided the answer: you create ads that get higher click rates. Most of the QS calculation is based on CTR. You need to figure out the wording in your ads that will make people notice and want to click on them. Sell the sizzle, not the steak.