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Google Adwords Top Bids
Posted 29 October 2003 - 05:59 PM
One thing that had really bugged me about this competitor was that I had changed my ad and they ended up copying it with about 2 or 3 words different, I believe overbidding them is my only chance now.
Any help would be greatly appreciated
Posted 29 October 2003 - 06:45 PM
I'm certainly not the most knowledgable person on the forum on this subject. But that has never stopped me from answering before. So here goes.
I think you are making several questionable and possibly false assumptions.
1. If you don't know what the competition is paying how do you know he is getting more clicks than you? I believe there have been some studies that suggest that first place in AdWord ads may not necessarily be the best place to be.
2. Google will not automatically charge you the maximum that you set for the word. I believe they will only charge you just enough to rank you ahead of the next guy -- although they use several factors in deciding placement. So bid a ridiculously high amount for the words you want. Then if you get put in first place you will know that the guy behind you is paying something just less than Google charges you for that click through.
3. I would expect you to think your ad was a notch better or you wouldn't have submitted it. But that isn't the acid test. The question is do the searchers think it is better. If they do they will click on it even if it is in second place. Why don't you ask someone else what they think about your ad?
Posted 29 October 2003 - 07:41 PM
Posted 30 October 2003 - 12:40 AM
the initial CTR metric used for ads on Adwords is 1% so to outbid your competition you'll need to bid as high as them x whatever they're currently bidding:
For example, if they are currently bidding $1 per click and receiving a 2% click through rate, you'd need to bid at least $2.01 to outbid them. Once you've had 1000 impressions Google uses your CTR to adjust your relevancy. Assuming it's higher than 1%, your costs would go down for the same position.
Posted 30 October 2003 - 02:46 PM
Let me make sure I understand what you are saying. For the click throughs that happen during the first 1000 impressions of your ad you will pay you maximum price. But after that your costs will go down in inverse proportion to your click through rate. If your click through rate is 2% your cost will be half, if your click through rate is 5% your cost will be 1/5 or 20% of your maximum?
Once you've had 1000 impressions Google uses your CTR to adjust your relevancy. Assuming it's higher than 1%, your costs would go down for the same position.
How does the placement of you ad impact on the cost?
Posted 30 October 2003 - 04:52 PM
Posted 30 October 2003 - 05:26 PM
I'm still having a problem. On their web site they give an example of a max bid of $2.00 with a 1% CTR costing $2.00. But then they say that if the CTR goes to 2% the cost drops to $1.00. Hence my question if the CTR goes to 4% why doesn't the cost drop to 50 cents?
Since your ad doesn't have an established CTR, the use 1% as a starting point until it's had enough impressions to make a better decision. At this point, that impression number is 1000. Placement and actual click costs will play by the usual rules of CTR * Max bid vs. competing ads.
I think there is something wrong with the example on their web site https://adwords.goog...ct/pricing.html
Posted 30 October 2003 - 06:54 PM
Posted 31 October 2003 - 10:06 AM
One more angle... when I started working on the site I handle, the previous worker had already set us up at #1 for a bunch of search terms in Overture. I dropped these all to #3, at lower bids, since #3 is as low as you can be on Overture and still get the exposure on their 'partner' search engines. Saved us a ton of money in the long run, didn't have a negative effect on sales at all.
Posted 31 October 2003 - 12:05 PM
Posted 31 October 2003 - 12:15 PM
So you go to the second, one - but it's pretty much the same as the first. You get the the third one and, no surprise, it's pretty much the same as the other two.
Who do you buy from? Well, the store you are in right now, of course. Why walk all the way back just to get basically the same thing? So number 3 wins, in this case
Naturally, if one of the stores had a way better deal, then this would be different - unless of course #3 had the best deal.
Posted 31 October 2003 - 12:25 PM
Consequently, there's nothing to prevent an ad with a lower max bid from appearing above those with higher max bids, so long as the the CTRs are such that Adwords' revenue is maximized.
Hence, to determine your competitor's bid you have to solve for multiple unknowns: his max bid and his CTRs for all possible ranking permutations.
The bottom line: Don't bother.
Bid the price that optimizes your profitability and don't worry about the competitor.
Posted 31 October 2003 - 12:38 PM
I buy just about everything but food online.
I used to buy a lot from them when I worked long hours for someone else- saved me time at the grocery store.
Also very cool when my sister and her kids were struggling a bit financially- I could send them groceries.
Sorry for the . But you can buy anything online!
Posted 31 October 2003 - 04:36 PM
I'm not sure I agree with the shopping mall theory. In the mall, there's a same-ness to all the stores, and you have to walk a long way to get around. Online, there are so many more variables between stores, and it's so easy to go from one to another and back again. My husband even opens several windows at a time so he can just alt+tab around and make quick comparisons between one store and another. Given similar prices and terms, there are still tons of things that can affect shoppers. In the mall, you might buy something at a store that has a tacky decor in your opinion, because the price is the same and you don't want to walk back across the mall. But online, would you buy from a site you thought was tacky? Or spend a few keystrokes getting back to a site that you liked the look of, with the same price? Online shoppers also select for location, maybe they want to avoid sales tax on a large purchase, or make sure shipping won't take too long. So as long as your site's seen (and not a clone of any other sites out there), you've probably got about the same chances whether you're seen first, third, or whatever.
Posted 31 October 2003 - 05:50 PM
It doesn't directly maximize ad revenue, since an advertiser pays the minimum they need to pay - usually far less than they are prepared to pay - in order to occupy a position that the maximum they are prepared to pay would obtain for them.
I believe that the Adwords ranking system is actually more complex than what has been described above. I infer that it is an automated linear programming algorithm set to maximize ad revenue.
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