Why You Must Test & Change Your PPC Bid Strategy

5 Comments Written on September 29th, 2008 by
Categories: PPC Tools

Years ago some noted PPC experts like Perry Marshall recommended bottom fishing AdWords for deals in some competitive markets, claiming that as searchers moved down the listings they were more pre-qualified to make a purchase.

Google’s ad quality score algorithms, bid prices, editorial standards, and the competitive landscape of paid search have changed to where it is much harder to find deals with nickel and dime clicks. Google favors smaller tight lists of keywords over broad mix and match ad groups. And, in an attempt to kill off many forms of ad arbitrage, they made a decision to recycle leading ads against the long tail vs letting longtail advertisers get those clicks for cheap.

27 minutes into this video Dan Thies claims that their sales per click dropped off as their ads moved down the page.

Today George Michie published a blog entry on Search Engine Land about why position bidding wastes money, claiming that the value of traffic doesn’t vary by position (though stating it does vary by time of day and day of week).

The next time someone tries to engage you in a discussion about “finding the right position” for a particular term, remind them that the value of the traffic is measurable; but the cost of a position is unknown, and unknowable, changing based on the whims of your competition. Bottom line: don’t let your competitors run your search program.

Mr. Michie linked to a PDF titled An Empirical Study of Search Engine Advertising Effectiveness – though that statistical study focused on one advertiser in the automotive group. None of these citations should give you a clear optimal bid position strategy, but all should give you encouragement to test your market and find out what works best for you.

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5 comments “Why You Must Test & Change Your PPC Bid Strategy”

I spent A LOT of unnecessary money competing for the first position in a crowded market when I watched Dan Thies’ video. As I gained more experience in PPC I realized that as long as I was on the first page of the results and that I wrote a relevant and compelling ad, my results will be fine. Less quantity, yes, but roughly the same quality.

It’s one of the reasons I’ve become very skeptical to IM/”make money” products.

This was a really fascinating post – I somehow missed the position bidding wastes money post.

While I think that for my campaigns there is a difference in quality based on ad position, the effect may not be as great as I think it is. I think traffic would likely not vary in quality for really tight, exact keywords for niche markets where people know exactly what they’re looking for and are having a tough time finding it.

But assuming and testing are two different things – this gives me plenty to test.

I think a lot matters what the organic results show. I someone doesn´t find what he needs in the first organic result and scrolled down so he might habe a look at the right side.

The Focus will be not a that first ad but at the lower ones

Interesting post about long tail cheaper clicks getting pushed out for more successful leading ads. SOunds very plausible because itputs more moeny into Googles pocket and they can argue that they are giving customers the ads they want (the relevency arguement – even if they are bending it here).

I’m not sure I agree that lower page ads do not get better conversions. I think Perry still has a point. Certainly the top spot still seems to convert at a lower percentage than the second spot.

Get near the top and have a very compelling ad – that’s what works for me.

We’ve just done a little research piece about the optimal Ad position to be in to maximize profit from your PPC campaigns.

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