Here is a common challenge:

Keyword Research shows lots of keyword phrases each getting hundreds to thousands of searches.

You create your ads and the Daily Budget estimator asks for a really large Daily Budget (hundreds to thousands of dollars a day). You know your ads won't display consistently if you don't, so you set your budget that high and keep a close eye on actual spending.

You get almost no impressions. So you increase your bids over $1.00, then $2.00, then $3.00, then $4.00 - each time raising that Daily Budget now into the thousands - and still no impressions and only a click or two.

At some point - maybe at over $5.00 a click - your bid manages to land your ads on the first page and - @# BOOM @# - now you've got impressions, clicks and OUCH you've spent too much.

How do you know when this is happening to you? When you're getting no impressions even though research shows there are a lot of searches on those keywords AND the Daily Budget recommended by Google is very high.

One way to determine in advance whether you may have this issue is to check the bids using the Overture Bid Tool to get an idea how high the competition is bidding. Bids at Yahoo will not be exactly the same as Google, but they can give some indication of the general bid levels.

See, this is the kind of useful stuff I like about here.

Common issue, and a solution suggested. Nice work Rose.

Thanks SportsGuy. I posted this because it is one of a number of issues that isn't obvious at all when you run into it - even if you do PPC for a living. A new advertiser has virtually no way to know what is going on when they first see this scenario.

Google's support people may or may not recognize the symptoms and frequently don't have a solution.

I thought I'd take some members along for "the ride" as I'm currently working on a new account experiencing this issue and have seen it recently in three other accounts.

With bids over $5.00 at this point and a Daily Budget of OVER $4,000 !!!! we've finally managed to get 253 whole impressions and 2 total clicks and have spent a total of less than $4.00!

I just raised the bids to over $6.00 even though the Overture bid tool shows only 2 advertisers at Yahoo bidding more than $5.00 on any of these keywords.

When I spoke with Google today about this specific account the Rep thought there was some technical issue. I later received an email indicating just what I suspected - the bids aren't high enough to put us on the first page of results.

When I mentioned that to get the ads to run requires setting the Daily Budget to such an astronomical amount that it should give most advertisers the jitters she recommended that we never set it to more than we're really willing to spend.

Anyone who manages Google Adwords accounts knows that you can't get their system to actually spend what you want it to spend by setting the Daily Budget to that amount. Once upon a time you could, but that has been "broken" for many, many moons now.

This advertiser being a courageous sort willing to risk what happens between the time when we finally get onto the first page of results and the three hour delay before statistics show up (and me watching it like a hawk) I thought you'd like the "thrill" of going along with us on this ride. I just raised the bids to over $6.00 a click.

I feel like the announcer on the old Batman show...."stay tuned to see what happens next..."

Well, just over $6.00 still isn't enough to get on the first page so we're up over $7.00 per click now with a Daily Budget of over $7,400.

By the way, no I don't expect it to actually spend anywhere near that when we finally get onto the first page. In my experience, the recommended Daily Budget is usually three to ten times higher than the actual spend rate. Only rarely does any campaign spend anywhere near the actual amount.

To calculate the most likely risk conservatively:

$7400 divided by 3 = $2467
$2467 divided by 24 hours in a day = $103
Three hour delay in reporting $103 x 3 = $309 spent

There is no way to know in advance what will really happen. My best guess is that we could spend around $300 but are more likely to spend $200 down to as little as $30 in that three hour window.

Just in case anyone else ends up taking a risk like this one for either themselves or a client, there are some factors to consider regarding likely traffic.

Traffic and searches are generally lower Friday night to Saturday for most Web sites. In addition, this is a three day weekend for many in the U.S. and traffic tends to drop over three day weekends.

I also do these kinds of tests in the very early morning hours (say 1:00 a.m. to 3:00-4:00 ) when fewer people are online. They are less risky times to test spending than during busier times of the week.

keep us posted please - this is very interesting

Beth

This IS really kind of cool. Thanks again Rose.

Would you believe? Bids over $7.00, Daily Budget over $7400 and we got a whole 383 impressions and a grand total of ZERO clicks.

I've increased bids to over $8.00 and Google's system now wants a staggering $9,790.00 PER DAY to show the ads consistently.

I know that once the ads get on the first page there will be clicks and at $8.00 a pop they can add up in a hurry. But really GOOGLE, can't you create an estimator any better than this?

Doesn't your computation consider what page the ads appear on and adjust for that? And there is one truly bizarre thing about these Daily Budget estimates.

I currently have three Campaigns, two National and one California only. The Daily Budget their system wants for the regional campaign is $8,720 of that total.

I can believe advertisers would be willing to spend more to target a specific state, and California IS a large state. But can there really be that many more clicks?

The keywords in the National campaign are all modified by California (include the state in the keyword phrase) and those in the regional campaign are not so it is possible.

This account is for a new client. I can tell from our conversations that he is obviously a very intelligent and reasonable person. But neither or us wants a huge surprise and it would be great to be able to test effectiveness without such a huge risk.

I've decided to let the ads run only one hour at this level and then drop the Daily Budget and wait for the numbers after the three hour delay.

SportsGuy, how would you have managed this? Would you have done any of this differently? The advertiser is a mortgage broker wishing to target California only for now.

One factor I haven't mentioned is that I have managed ads for a couple of realtors with similar sites and strongly believe that his Web site will be very effective and whatever traffic doesn't result in an immediate sale is very likely to be captured as a long term lead.

This is seriously not fun. I let it run with high bids and a daily budget of almost $10,000 for one hour and then dropped the daily budget to $210. I did that because with estimates that high you have to wonder how much you could spend in the three hours before you know what's happening.

Got a grand total of 100 impressions and no clicks today. So here's the new plan:

1. Work on ads at Yahoo instead.
2. Increase bids again but not use the recommended Daily Budget given. Arbitrarily choose another amount, probably 3-10 times what we're actually willing to spend for three hours.

[ Message was edited by: flyingrose 11/14/2005 12:13 am ]

Ok, a $9.00 CPC with the recommended Daily Budget of $12,000 running for an hour managed to get 1 whole click.

So, overnight I've set the bids in the $9.00 to $10.00 range and set the Daily Budget to $210 hoping to spend $20-$70 and at least have some idea what bid it takes to get onto the first page of results.

If there really is that enormous amount of potential traffic this ought to show us something.

No clicks overnight or today even though I raised more bids over the $10 level and almost doubled the Daily Budget to $410. Can you imagine someone who never had an Adwords account before figuring this out?

No ( shaking my head ) I am almost confused as it is just reading it lol

I feel bad for you - this has to be a major brainier on you.

Beth

The issue is actually fairly simple. Ads on the first page of search results get the lion's share of impressions and clicks so you want to get onto the first page.

This is complicated in this case by the possibility that there are hundreds of advertisers bidding about the same amount to get onto the first page.

Their bids may be very close together and their ads may be limited by Daily Budgets so you get a different mix of ads for every search.

I'm still working on the challenge. I'll let you know when I get there.

SportsGuy, how would you have managed this? Would you have done any of this differently? The advertiser is a mortgage broker wishing to target California only for now.

Sorry for my delayed response FR.

WOW! Man, that is one outta control category.

First off a warning:

I just finished my Starbucks maple latte and I'm halfway through my Cuban coffee this morning... (I swear, I'm NOT a caffine junky.)

How would I have managed this, hmmmm....let's see:

You're clearly focused on it, watching it and testing the bid-points. The client trusts you and you're working to ensure they don't get burned - kudos to you!

Have you been testing the ad copy as well? Being on the first page of listings IS important, but so's the ad copy. I know you know this, so we'll let that point sit.

I'd be researching my butt off for truly niche phrases - "Million Dollar Trailers" - stuff like that. Obviously, these would stem from the clients need/wish/services/products list, but it might be an idea.

It's PPC, after all - no clicks, no money spent, so I never think there could ever be "too many" phrases in a campaign (given they're related, of course).

Might try taking him in a new direction, too:

Since that market is uber-competetive, and the main, performing phrases are locked into a high orbit, have him expand his content with "self-help" stuff on the site - calculators, debt/equity tables, lists of tips on how to manage debt, how to determine what you can afford, all the "extra" stuff home owners naturally need at some point.

Target THOSE topics in Google - and manage those ads to drive leads.

That said, and as has been pointed out many times, G is not the only game in town. Perhaps a shift on the big-game phrases should happen over to Yahoo & *maybe* MIVA. Leave only niche stuff up at Google.

I know this is a PPC-focused campaign for you & your client, but perhaps a foray into ad networks might be in order - Fastclick's 250x250 "In-Vue" ad consistantly performs at a 2%+ click-through rate for us. We're a sports media company, so that could be the difference for us - the product, but again, it might be an avenue you for you to explore (or an idea to suggest if you might need a bit of "I'm willing to help you in any way" karma)

If this were my campaign, I would have stopped the experiment by now and retooled. Clearly it's not working. Glad to see the play-by-play, but if you're talking a $15+ CPC to play (guessing there), then there's a larger problem in that market.

Namely, the folks managing the campaigns, generally, need to be better educated on how to manage their costs and these sorts of campaigns. I think YOU clearly demeonstrate an investment in your work for clients. Many others, though, likely just set a high bid and let it run - costs be d****d.

Much like many of our advertisers, the real estate market seems to have a high number of folks with lots of money to spend...

Hopefully some of this will prove useful Rose.

Damn near fogot this:

have you played with day-parting at all?

Our stats show us traffic runs up around Noon, then spikes again from 5PM - 8PM (local times for me). I think you can target time-of-day with G - I know I could, way back. That would allow you to stay at elevated rates and ensure exposure during peak online user times. Might be worth looking into.

...and, in the end, this may simply end up being the cost of entry into this marketplace now. If your client can afford it, your slow & steady approach is the best way to "ramp them up" to deal with this as an ongoing cost, IMO.

Rose, I've learned that sometimes it's best to simply give a campaign some time if it's up against such stiff competition. Leave it for a few weeks, although I know your client probably expects quick results.

If the text of the ad is perfect (as you've often pointed out), it will climb up, even if the competition is bidding much higher. We all know clicks can compensate for a lower CPC. I know it is harder to climb up from page nr. 2, but I found it also works there. And when you finally reach the bottom of page nr. 1 (a very good position), it can start climbing quickly. Just as long as the text is so attractive that it gets 2-3 as many click as the ads around it. And that is possible! It find it amazing that, although so much is at stake, some of these texts are sooooo poor. Just do any search and from the list of ads you can easily pick out the ones that have to pay much more than the rest to stay in the position they are.

For many of my keywords, I have now reached top position and my CPC is not skyrocketing. Every now and then a highroller comes in and pushes me down to nr. 2 position, probably by bidding very high. But after a few days, when my larger amount of clicks start to take their toll on the newcomer, I'm back to nr. 1 again.

So my advice to anyone: let text and time do it's work!

Bids are in orbit because the profit makes it worth it to the advertisers. Those actually making loans can certainly afford it as can many who are brokering them.

There are also people selling leads to brokers and mortgage companies who cover the high costs of acquiring them by selling them multiple times.

The main reason I have persisted is that I want to know what the bid levels are. Even though the long range plan is to identify less expensive keyword phrases, my client may wish to buy some of this expensive traffic.

I haven't added the number of keywords I usually would have because that will complicate the potential for overspending. I do have a separate campaign where I'm geo-targeting niche keywords so I can give that campaign the full recommended Daily Budget.

Yes, I'm testing multiple ads and using headlines different than other advertisers. Many offer free information.

I wouldn't be doing any of this if the client didn't have a Web site I know to be effective because I had other clients using very similar sites.

The site captures current leads plus future leads with lots of free reports and offers. I still want to see some numbers before we go hog wild on $12 clicks though.

I know you're familiar with tracking, but for those who may not be what I'm looking for is the percentage of visitors who request loan information and the percentage who agree to be on a mailing list in exchange for free information.

If those percentages are high $12 a click could be worthwhile. If they're not what I expect that could be too much to pay.

Thanks for the other tips. Once we get something working in PPC we'll probably expand into other areas. For now I'm going to work on Yahoo. Bound to be less of a headache.

By the way, $12 is only getting some keyword phrases onto the third page. Bids are nowhere near this high at Yahoo, but Google does have the lion's share of Internet searchers.

As I told someone else recently, if you aren't getting impressions because you're not hitting the first page of results your ads aren't the problem - at least not yet.

The moral here is mortgage companies REALLY want your business. The highest bids I've seen so far are for "bad credit mortgages".

Wow...over $12.00 a click and only made it to position 20-30 for most bad credit mortgage keywords and many other mortgage related keyword phrases.

Shoot the moon FR - step up to the $18 bracket. Come on...you know you want to...

*turns off peer pressure*

Thanks for keeping up the updates - this is interesting information.

When it comes to mortgage keywords I LOVE YAHOO! Search Marketing. Keywords that are over $12 at Google getting no clicks are under $5 at Yahoo.

The next updates will compare results between Google and Yahoo. Stay tuned, PPC fans.

Thought some might be interested in an update on the Google account I discussed in this thread.

I basically decided to focus more on Yahoo where I could better tell what the actual bids for each phrase are.

At Google, I lowered the bids to between $3 and $14 a click and lowered the Daily Budget to $120 per day. Since then in the past 28 days the account stats are:

11,591 impressions
45 clicks
$4.20 average cost per click
$188.89 total spent

Now you can see why I feel the Google estimators are inaccurate and the Daily Budgets are totally nuts. There is tons of traffic for these keywords, we're bidding over $14 a click on many of them, yet with a Daily Budget of $120 for 28 days we've actually spent an average of only $6.75 per day.

Thanks for the update

I was just thinking about this thread the other day and was wondering how you were making out with it.

Beth

When you're spending $4.00+ a click you want to find out what conversions will be like before you go too crazy with it.

Basically we bought a small amount of traffic at Google and quite a bit of less expensive traffic at Yahoo and the advertiser is going to see how it converts.

I now have a program that can tell me what the top bid at Google is. Can't tell what the top 8 are but at least now I can see what the highest and lowest cost phrases are for that one position.

Rose,

I think you have some very interesting insight, but unless the game has changed, this business "logic" is not going to work for 99.9% of web based businesses.

Can you imagine going into Wallmart, and someone handing you over 4.00$ for walking into the store. A click for $4.20 ... jeez people, is money growing on trees in California?

Lets take a website that makes money from advertisement... like a few of mine. If I paid 4.20$ to Adwords >> you better believe you wont see anything like that in return from Adsense. Basically what I am saying is that the game ( from Googles perspective ) is a fixed one at that.

4.20$ IN >> adwords

.18 cents>> adsense

Googles profit for one click >> 4.02

But what is a click anyway? People spend their lives now a days clicking around. 10 clicks >> less than 2 minutes of work for 40$ ( of which Google pockets 80% atleast ) ... there is something wrong here.