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Adwords Bids - Take 3

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# 1
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I appreciate the feedback and suggestions I am getting on here. It is going some of the way of explaining the intricacies that makes up adwords. I am still very frustrated with my campaign. I am still getting massive ups (and never downs) in my keyword costs. Most still have somewhere between 200% and 400% increase in 5 days which just looks so questionable.


The overall system Google calls an auction doesn't really feel like an auction to me at all. How can it be an auction if Google give you estimated costs, and after you commit to buy you find out the costs are way above what they originally indicated? Then when you ask them about it, they say you can't really go by the estimated bid figures. if you can't go by them why have them? 


Am I the only one completely frustrated by this system?


In one instance I have bid more than 40 times the estimated first page bid and my keyword is still too low to make the first page.


The details of the transaction are as follows: Est FP Bid: $0.02; My Bid $0.80;

Result: Keyword is too low to show. Quality Score 8.


Can anyone tell me if this is normal practice for others as well?


My next question is: If the bid amounts supplied are useless as a planning figure, how do you know what is a reasonable amount to pay for a keyword? 


1 Expert replyverified_user

Re: Adwords Bids - Take 3

Top Contributor
# 2
Top Contributor

Hi Stewart,


Welcome to the AdWords forum Smiley Happy


First page bid and top page bid estimation is just an estimation, it does not give you guarantee that your ads would appear on first page and top page respectively.Every ads have to achieve a threshold, then your ads appear on the Top page and first page. Even if you set your max cpc equal to est top page bid.


There are certain other factors internal and external factors, that impact of your keywords position:-


1.) competition from other advertisers,
2.) Target location and time, when a user perform search on Google.
3.) the components of your Quality Score (expected CTR rate, ad relevance, and landing page experience),
4.) your CPC bid,
5.) the expected impact of extensions and other ad formats,
6.) your budget and account settings, and user and advertiser behavior.


This is why you are seeing your ads does not come at top position, although you increase the bid 3 times higher than the est Top page bid.

how do you know what is a reasonable amount to pay for a keyword? 


It can be realized by testing or experiment. But, you can try to improve the Ad Rank of the ads,


AD Rank:- Max CPC x Quality Score (+Ad Extension Format) and work on the basis of this.


Please explore more about Ad Rank:-



--Rakesh Kumar, AdWords Top Contributor , Twitter | Linkedin | Community Profile
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Re: Adwords Bids - Take 3

Badged Google Partner
# 3
Badged Google Partner
Steward B,

Estimate Bid:
It's just that an Estimate of prior history and based on rule of large numbers.
It will not take into account your GEO targets, your general setting, your negative keywords, your QS, your match types, your extensions etc.. as well as it will not take into account your Competition.
So I don't use it

My next question is: If the bid amounts supplied are useless as a planning figure, how do you know what is a reasonable amount to pay for a keyword?

The reasonable amount to pay for a KEYWORD is going to be based on your ROI.
The true profit margin of your product, your objectives etc. No one can give you that X$ answer but yourself.

One method would be to bid 9% of the gross margin of the product.
One method would be to bid for the 1-3 spot.
One method would be to bid just for #1

But at the end of the day, it all comes down to ROI. At what spot(ad rank) and what CPC give you conversions and ROI?

It's simple as that, Figure out where you Get the most conversions at a price that delivers you the best ROI Return on investment.

When I build a campaign I start with a Bid say $5 for that keyword. After 10 minutes, I look to see with the ad preview tool what my ad position is. I note it. Then I change my bids and repeat and note the bid and ad position rank. Hence I have an idea of what it would cost me per click for each spot. I pick a ad position and bid price. and let that run for 8 hours or so. Did I make conversion? What was my Cost per Conversion, What was my ROI?
Then I adjust accordingly, Up - down etc.

I also work on my QS, and test my Ads, and Landing page. Find the sweet spots., be diligent and treat it like a Job.

Some accounts I work on have $75 CPC's others have $1. It all depends on the product, location, campaign setting, landing pages, ad copy etc. But regardless of the CPC of $1 or $75 per click, the Return on Investment, is 3x -10X . For every $ spent, the return is a minimum of 3 times or better. It can be done..

Re: Adwords Bids - Take 3

Follower ✭ ☆ ☆
# 4
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Thanks Rakesh. Thanks Eric as well. At least now I have an idea of a technique or two I can try. I am finding the whole process very expensive and very frustrating. I saw the other day that Googles average CPC for last year went down 6% - someone else must be getting my share.