Adjusting Bids at Google to Improve ROI

Here is my process for adjusting bids to lower advertising costs while retaining or even increasing traffic.

TIP: End your bids consistently in an unusual amount, i.e., not 0 or 5. Since most people do end bids in 0 or 5 you'll have an advantage over those bidders.

First decide what position you want to target depending on what you're selling and how aggressively you want to get more traffic. Generally though, for most advertisers I recommend a position range of either 4-6 or 5-8. As long as your ad is on the first page you'll get decent traffic.

If bids are high or you want to lower spending bid for 6-8. If you want more traffic test bidding into 4-6. I have tested bidding higher and found only a few advertisers who get better results in positions 1-2 which will cost as much as sixty percent more. Most advertisers find spending is much lower and results are just as strong AT GOOGLE for positions 4-8. (Yahoo results are different.)

1. Use the history function to determine when bids were last adjusted.
2. Select a time period during which bids have not been changed.
3. Go to the keyword level and sort columns by average position.
4. Lower all bids in ten cent increments on positions that are higher than necessary. If keyword is in position 1.0 you can usually cut the bid in half or lower it more dramatically.
5. Raise the bids within your comfort range for any keywords that are lower than your target position.
6. If you don't want to pay enough to get a keyword on the first page you can bid for 9th, bid your usual maximum, or lower it to a minimal amount for whatever cheap traffic you can buy.
7. Save changes.
8. Check Daily Budget and change as necessary. Their estimator only shows increases required and never decreases unless you lower it first to get the new amount needed.

If you make large changes in bids on individual keywords or you have heavy competition check bids again after at least a day to about a week and adjust again. Be sure you don't overlap dates when adjusting bids or your changes won't be accurate.

More bid adjusting tips:

1. If you have competitors whose ads come and go because they are limited by Daily Budgets or because they pause and resume them this will affect your average positions. Check this by looking at average positions for different time periods.

2. If you have competitors who only run ads during certain days and times and you want to be competitive with them, use time periods that you know their ads are on when you check your positions and adjust your bids.

3. If your bids are low enough that your ads are not on the first page of results they may show no impressions. Don't assume that no impressions means no searches - it may mean no searchers that went past the first page. There are basically three ways to find out:

a. Use the Ad Diagnostic Tool
b. Do an actual search (judiciously or you can disable your own broad and/or phrase variations of keywords)
c. Raise bids

Nice work Rose - very nice.

Thanks, Duane. High praise coming from someone whose expertise I value. Sometimes I feel as though I post into a vacuum as those I most hope will be assisted by what I write rarely reply.

I would think some would have questions or ask for additional details. I know this is information many can use because I provide this type of guidance to clients regularly and none have already applied this technique.

Just ending bids in any number besides 0 and 5 and bidding a few cents more than the minimum can make a huge difference. I am often amazed so few think of this themselves.

Check any really competitive keywords in the Overture Bid Tool and you'll often see dozens of identical bids. One penny higher and they'd move up all those positions.

*blushes* - YOU get a drink one ME!

I have always been a fan of this forum BECAUSE folks like yourself post useful info for users.

I'm sure oodles of folks read it - and I'm also sure that since most folks coming here are new, they either are a bit overwhelmed and wouldn't know what to ask, or simply take the info and turn it into practice.

Items such as this thread will generate topics and questions down the road - when they hit the brick wall after learning from folks like you.

I seem to recall, during the "Rebuild" discussion, an idea to have section leaders (mods?) post things similar to what you do to help deepen the "centralization of the knowledge base" (not a direct quote from anyone, just paraphrasing and idea - whihc may have existed only in my head...).

A sticky with links to a series of these types of threads would be a valuable adiition to the section/site/forum, IMO - not sure, though, if there's already a plan underway for such a collection to be housed in another space.

Thanks for the praise - and a hearty right back at ya - you know your stuff, and aren't afraid to share.

Duane

I for one appreciate your insightful wisdom a lot and really appreciate your comments. I know quite a lot, but not to the degree you do when it comes to pay per click.

One thing I've been dealing with is the degree to which I should try to target certain positions, adjust bidding amounts up and down to achieve them and with what degree of frequency (every day, every two days, etc.). Google's algorithym that relies on 7,364,952 different variables to compute average cost per click doesn't help matters. For the record I still think they'e as goofy as ever...

How frequently I adjust bids has a lot to do with how stable they are. If you have a lot of competitors who turn their ads off and on try to make your adjustments when their ads are on.

If you have a lot of competitors who are limiting how often their ads display with budgets the average position may be less meaningful. If you've done much work with averages you may realize how misleading they can be.

As long as you don't overlap the time periods you can adjust every day, every other day, or far less often. For most advertisers, once a week to once or twice a month is probably plenty once you've stabilized them.

It is far easier if you try to target the center of a range of positions such as 3-5 (4) or 5-8 (7). When I'm doing it I usually decide on a rough cut-off point, raising any that are over 7 and lowering any that are 4 or under.

I usually raise or lower in ten cent increments as I mentioned. Sometimes that barely moves a keyword, but if there are few advertisers or a small difference in their bids on some keywords it can jump you from 4 to 9 or 7 to 2 so you can't always be precise in where you are.

I know it may seem like a lot of work to some but setting bids at the keyword level can cut your advertising costs by 20-50% or more. What you save on some keywords you can then use to get others on the first page.

Hi rose i was reading a different post of yours and you said something like PPC is good for just about market but you would not recommend it for something, something and mortgages unless you have deep pockets.

well we are in the mortgage industry and giving it a shot, but trying hard not to waste money in the process. many of these words go for like $15+ its crazy. I have concentrated on a speciffic area even though we are national.

do you think that is a good idea or should i be trying to get everything i can?
i try a lot of the techniques you mention but im on overture and you post about more. should i try google?

as for a optimal positions go for overture are they pretty much the same as google?

by the way everyones posts are great i dont really reply to most because most of the time i never come looking for the answer to a question. im really just trying to learn as much as possible. i will read and then ran back and try the stuff out

Hi belmsom and welcome.

Using PPC for mortgages either requires a lot of money or a lot of time and ingenuity. Looking for less expensive keyword phrases by geographic location is as good a place to try as any others I've seen so far.

Geo-targeting instead of running nationally greatly impacts the number of searchers who see your ads because it cannot be determined where many of them are located. This won't be an issue for you though because there are so many mortgage related searches. Unless you're huge you couldn't handle all the possible traffic.

You can read about my testing some mortgage related keywords in this discussion.

Perhaps something there will help you and there are definitely some warnings in there about the potential costs you could incur. I do specifically say that I focused on Yahoo instead of Google for reasons that are explained there. You can advertise on both but it is more difficult on Google.

The most economical keywords for anyone are those targeting a specific niche. You may be able to locate lower bidding for a particular type of mortgage offering in specific locations.

How many clicks you can convert to leads will greatly impact how much you can profitably spend on each click. Ideally you'll want to have lead generating forms that you can track so you can determine what percentage of visitors complete a request.

The higher you can get your conversion rates the higher the value of each click and the more you can afford to pay. I felt this particular mortgage site would be effective as it is very similar to real estate sites that have converted well. Conversions were less than exciting so I would definitely recommend working on that before spending too much on PPC.

Optimal positions on both Google and Yahoo depend a lot on what you're selling, what your profit margin is, and what your goals are. In mortgages, given the enormous amount of traffic bidding the least you can for any position that gets clicks probably makes more sense than paying even more for top positions.

wow thats some great info, really gives a little insight on how things work in the industry.

i started my campaign last week. i have two local campaigns going and just last night i started two national ones. if anything exciting happens i will keep you updated.

Thanks for all the help, i feel a little better about this now

You said there is a 3 hour delay in google's adwords. is it the same in Yahoo?

The reporting delay for Yahoo is at least 24 hours. Google's system is more "real time" than Yahoo's because they are running on older and different hardware and software platforms.

Officially, statistics at Google don't include the most recent three hours and Yahoo's usually are one day behind. Both can be further delayed so advertisers should be aware there is a window during which you don't know what you're spending.

Because of the enormous amount of mortgage related traffic there is the potential for spending far more than you wish during that time, especially if you're bidding very high.

The reason I decided to focus on Yahoo was to control that potential. If you bid just high enough to move from the second to the first page at Google you could suddenly go from no traffic to sky-high traffic and from spending nothing to spending thousands an hour.

You can read about my testing some mortgage related keywords in this discussion

I was interested in reading your discussion but I am unable to click on that link you provided.

evicart

FlyingRose:

You said, "For most advertisers I recommend a position range of either 4-6 or 5-8."

Isn't it true that if you are placed below position 4 your ads will not syndicate through Google's partner sites? If so wouldn't this reduce your overall visibility and potential to convert more of your visitors since you are able to capture more traffic from their partner sites?

Just curious...I am desperately trying to reduce cpc's to help reduce our overall Cost per acquisition. My industry is extremely competitive so clicks are expensive. I was told clicks could run as high as $15 although I have not seen that in a while. Typically the highest click I have seen since I have been trying to reduce cpc has been around $10-11 in Google (Yahoo is only like $8) But the keyword that gets the most traffic and is our highest converter runs anywhere between $6-9/click.

evicart

I just clicked on the link to the discussion and it works fine for me. Try clicking it again or you can look through the index for this forum and find that thread. It is called Huge recommended Daily Budget - No Impressions.

Different partner sites display different numbers of Google ads. Where they appear on the page is also different. Sales from AOL are the most likely to be affected when dropping out of the top three positions because they show three ads at the top of the results, none on the right, and three more at the bottom. (When last I checked - things like that have a tendency to change.)

Many partner sites display far more than three ads. Others only display three. In other posts I've mentioned various factors changing your target positions affects.

One is shopping comparison sites. Some of those only use the top 2-3 ads so if you want to be on them you may want to bid high. That generally only works well if you are the low price leader and want price-shopping buyers.

There is always a trade-off in traffic versus cost. There is no question that the top three ads get the most exposure and the most impressions and also that they cost far more. I usually see about a sixty percent savings by dropping out of the top three.

If whatever you are advertising supports the cost per conversion for being in the top three positions then being there will generate the most traffic and potential sales. I only bid into the top three once I know it is financially feasible (profitable) to do so.

Each advertiser has to determine whether the increased sales generated from those positions justify the generally much higher cost per conversion.

For one of the advertisers I've worked with the longest that has a strong conversion rate on a niche product line, I bid into the top three for all of the more specific (descriptive) keywords related to their products, but not for the most expensive, highest traffic, and more generic keywords.

The reason for that is simple. Bidding in the top three on those really expensive keywords greatly increased sales while simultaneously greatly increasing cost per conversion.

We found that we'd rather have a higher net profit on fewer sales. If we want to increase sales we raise those bids. If we want to increase net profit we lower them.

Thank You! I have learned something new in this thread and I greatly appreciate that. I am actually going to test this out myself in the next few weeks to see how our sales are affected so that I can really determine where the best placement is for our business. Our customers are typically price conscious so it will be interesting to see what happens.

Thanks again for your explanation I really do appreciate it.

evicart

Just to re-iterate Sportsguys comments.

Since I have been monitoring the posts on this forum I have managed to gain a better understanding of how Adwords works (or sometimes doesn't) and by putting into practice all the advice given by Rose and others I have managed to cut spending by 20% whilst increasing traffic but more importantly increasing ROI.

I can only say keep up the good work, I really appreciate it and probably couldn't survive without this information.

I am still having a few issues with Neg keywords, I still need a bit more knowledge and understanding on how these affect campaigns. I am hoping to have a few examples in the next week or so that I could do with some help on.

One thing to remember about negative keywords is to use individual words rather than phrases whenever possible. I've seen phrases block impressions of keywords you want.

Here is an example. Let's say you sell silver jewelry but not gold or platinum jewelry and not anything with diamonds in it. You want to block the phrase gold diamond jewelry.

Do not use -"gold diamond jewelry". Instead use this:

-gold
-diamond
-platinum

That will block those three types of jewelry but not any other jewelry searches that don't include those words.

Good point.

I will remove all the phrases and replace with single words.

Thanks

I've had some questions about bid position so I wanted to expand on what I wrote above. If you want maximum exposure and sales test bidding into third position.

Some partners, notably AOL, display only three ads at the top of their pages. By bidding into third you ensure your ad appears at AOL while still avoiding those automatic clicks in positions one and two.

If you want to appear in some comparison search engines you may have to bid into the second position. Again, test your results.

Any time you bid into the top three positions consider only bidding your exact and/or phrase match keywords into those positions and not your broad matches. This will limit the risk that those automatic clicks are for unrelated searches that will not convert to sales.

Some key statistics to watch when tracking are conversion rate, cost per conversion, and bounce rate. The first two are available with free Google conversion tracking. Bounce rate is a common metric in any Web analytics program and some log analyzers.

The higher your bounce rate (those who visit only the landing page and then leave without going further into your site) the more untargeted traffic you're buying.

Depending on what program you're using you can probably see which keywords are generating high percentages of untargeted traffic. You can edit your ads or keep those keywords out of the first two positions to reduce your bounce rates.