Only pay $0.01 more than my competitor

... doesn't make me feel any better ...

[internetheaven]

I had to repeat maths at school so this may be completely wrong but as I see it, when all these PPC sites say "you will only pay $0.01 more than your next competitor's bid" it still doesn't sit right with me. e.g.

> I bid $2.53
> Guy 1 bids $2.52
> Guy 2 bids $0.23
> Guy 3 bids $0.10

that means that if we all only pay $0.01 more then:

> I pay $2.53
> Guy 1 pays $0.24
> Guy 2 pays $0.11
> Guy 3 pays $0.10

is that right?

[fischermx]

Yes, that's how it works.
That's why many people like to stay in lower positions. It's just a lot cheaper.

[secone]

That is not correct, if guy 1 has a max bid of $2.52 and you bid $2.53, then his bid goes up to his max of $2.52 and resides in the 2nd positions while you are in the first. Guy 2 remains at $.23 and Guy 1 stays at $.10.
Sure, you're paying more for #1, but that will get you a significantly larger amount of traffic.
Hope this helps!
-S

[internetheaven]

That is not correct, if guy 1 has a max bid of $2.52 and you bid $2.53, then his bid goes up to his max of $2.52 and resides in the 2nd positions while you are in the first.

But the PPC site(s) statement is "never pay more than $0.01 more than the NEXT HIGHEST bid", so Guy 1 should only pay $0.01 more than Guy 2. So if Guy 1 is paying $2.52 then the PPC site(s) are lying.

[fischermx]

Note: it is the next highest bid, not the next highest CPC.

Because, if you apply that, I mean, the next highest cost per click, then nobody would be paying more than a few cents.

Guy 3 0.10
Guy 2 0.11
Guy 1 0.12
You 0.13

But that would be ridiculous. As an advertiser, that'd be nice, but as a publisher, I would drop adsense for banners if that were the case.

[mike_ppc]

Sorry, I don't think it's correct. Here is my version:

Guy3 pays 0.10 (or whatever is the min bid for that keyword)
Guy2 pays 0.11
Guy1 pays 0.24

You pay 2.53

So, yes, you were right on your first post - assuming that the max bid is the only criteria (or other criteria are equal)

[internetheaven]

I notice that no PPC service provider has stepped in to clear this up and I haven't received an email (that wasn't a templated fob off) back from my direct queries either.