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Max. CPC, Actual CPC and some other cpc stuff

[ Edited ]
Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

Hello Everyone, I've a couple of questions regarding Max. & Actual CPC which I hope to get some informative answers for so that I can feel more safely while bidding.

 

1st: Let's assume that I've a Max. CPC of $10 and the ad immediately below me has a Max. CPC of $2

-Assuming we both have the same QS and our ads exceeded the top of the page ad rank threshold and have equal-performing extensions and ad formats-

 

- How much will I pay comparing to him, only the extra one Penny needed to outbid his max CPC of $2 which makes my Actual CPC = $2.01?

- Or there are exceptions or other factors than the mentioned above which might end me paying more than the $2.01 per click?

 

 

2nd: Let's assume a Third Advertiser who shares the same URL as mine entered the auction with us and bidding on the same keyword with a Max. CPC of $7

-Assuming we both have the same QS and our ads exceeded the top of the page ad rank threshold and have equal-performing extensions and ad formats-

 

- Will my previous supposed Actual CPC of $2.01 get affected by this 3rd advertiser's bid? -which his ad didn't show since he shares the same URL as mine-

 

In other words, 

Since this new advertiser is bidding on the same keyword as mine and shares the same display URL as mine, one of us only entitled to be appearing for this keyword. And since I've a higher Max. CPC of $10 and all other factors are equal, the system will show my ad and forbid his from showing.

 

In this case, will his $7 bid add to the competition raising my Actual CPC to more than $2.01? Or his bid will be completely excluded from the auction as if it has never been made?

 

Conclusive answers will be very much appreciated,

Thank you.

1 Expert replyverified_user

Re: Max. CPC, Actual CPC and some other cpc stuff

Top Contributor
# 2
Top Contributor
Hello there;
Before we get into the "auction" and the price advertiser pay please note that this case is apparently a violation of the "double serving" section of the Policy, because you target the same domain using different accounts. So, unless some exemptions, (e, g global brands) this is a theoretical case....
Moshe, AdWords Top Contributor , Twitter | Linkedin | Community Profile | Ad-Globe
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Re: Max. CPC, Actual CPC and some other cpc stuff

Explorer ✭ ✭ ☆
# 3
Explorer ✭ ✭ ☆
Good morning.

When you say "Or there are exceptions or other factors than the mentioned above which might end me paying more than the $2.01 per click?" - there's another dynamic at play here. It seems to me that Google has a rule that the more you pay* the more your ad gets to be seen. That is to say, if you're in position #3 then paying $2.01 will keep you there - but paying $4 will get you more views.

Now Google's all about relevancy - and most of your QS depends on your CTR. Improve your CTR and you're not only keeping Google happy, but you're also getting more of the traffic too. (*) The point is that there's yet another dynamic and that's an inverse relationship between your cost per click and your CTR. Put simply, you'll pay $2.01 for all your traffic compared to the advertiser beneath you who's paying $2.

That means having an outstanding ad that speaks to your audience (rather than the more usual sales patter "we've got this great product, are you going to buy it?") - offer an element of the benefits that your product has to offer (corns gone in 5 days or your money back). This will improve your CTR by leaps and bounds. If your CTR is 5x that of your nearest competitor you'll be paying $2.01 for five clicks, not one. Do the math!

Improving CTR is the easiest way to climb the ad rank ladder. It costs you little and by the time you're at the top you'll have an impressive CTR, which means you'll be swiping most of the traffic that comes to that search page. And by definition, that includes SEO - so reverse-engineering your Ad to meet your customers' needs on SEO means you'll pretty well have cornered that market.

If you have any comments, thoughts or questions, please do ask. The concept behind this is astonishingly simple - but putting it into practice can be really frustrating. That's because you need to apply it to your situation, and what might just do the trick are a couple of hints in my responses here.

Re: Max. CPC, Actual CPC and some other cpc stuff

Explorer ✭ ✭ ☆
# 4
Explorer ✭ ✭ ☆
Moshe, I think this is a case of affiliates chasing the same brand. The display URL will be the same in this case with different hashtags. Does this say anything to you? Would that still be a case of "double serving"? To me it's a grey area.

Re: Max. CPC, Actual CPC and some other cpc stuff

Top Contributor
# 5
Top Contributor
Ohhh....I see
Moshe, AdWords Top Contributor , Twitter | Linkedin | Community Profile | Ad-Globe
Did you find any helpful responses or answers to your query? If yes, please mark it as the ‘Best Answer’

Re: Max. CPC, Actual CPC and some other cpc stuff

[ Edited ]
Visitor ✭ ✭ ✭
# 6
Visitor ✭ ✭ ✭

Thanks Gemma for the great tips. I always trying to improve my Ad performance and relevancy to meet the searcher needs and just started 2 days ago trying to get out of the usual sales pattern as you suggested and started to see better avg. CTR yesterday at 7.40% .. I had had some low performing keywords with high traffic and low CTR which I paused/deleted to have a good avg. account CTR as some one suggested somewhere else. My avg. QS is 7 and I've many keywords with a QS of 10 and rarely get a keyword with QS beneath 5 which is telling me that I'm doing something right.

I can confirm that the 2nd question is regarding an affiliate case. I read somewhere else that there's no harm in promoting affiliate products/services as long as their sites and my ads comply with Adwords policies. I choose the products/services very carefully and makes sure that their products, services & sites completely comply with Adwords policies. Not only that, but I also make sure that the product/service is truly beneficial and relevant to the searcher, not just a hype sales message with unproved claims or get-rich-quick type of products. I never promote such products and even if I tried I'm pretty sure that I'll get a suspension by Google.

In fact affiliate marketing earnings aren't my main goal with Adwords, it's just for testing and training purposes. I've a good experience regarding SEO and what I'm trying to do here is to combine my SEO knowledge with the PPC advertising power. I'm currently studying the Adwords Advertising Fundamentals and expecting to undertake the first exam in the next 2-3 weeks wish me good luck Smiley Happy And aiming to becoming an Adwords Certified individual. So, "affiliate marketing + Adwords" ATM is my practical study beside the theoretical exam study. It's giving me confidence and experience so that I can be ready to manage one of my company's clients' campagins.

Back to my original questions, I'd very much appreciate if someone can give me straight answers to them.

Thank you.

Re: Max. CPC, Actual CPC and some other cpc stuff

Top Contributor
# 7
Top Contributor

Hello again;

Two comments:

First: make sure that in addition to complying with the Policy, your site includes relevant content;

As for your original question - check this short video;

 

 

Moshe, AdWords Top Contributor , Twitter | Linkedin | Community Profile | Ad-Globe
Did you find any helpful responses or answers to your query? If yes, please mark it as the ‘Best Answer’

Re: Max. CPC, Actual CPC and some other cpc stuff

Visitor ✭ ✭ ✭
# 8
Visitor ✭ ✭ ✭
Thanks Moshe for the tip and thanks very much for the the video too. It completely answers the first question and made things pretty clear.
But do you think a bid of an ad which was excluded due to sharing the same "Display URL / Top-level-domain" as mine will be entered this equation? Or the ad & its bid will both get excluded from the auction?