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Trying to understand the daily forecasts chart

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

Hi there,

 

I'm looking at traffic forecasts for a particular keyword. If I'm reading the chart correctly, it's telling me that if I set my Max CPC bid anywhere from $0.10 to $1.00, the number of impressions stays relatively constant (it only increases from about 16 to 18), and the average position also stays relatively constant (it only increases from about 1.6 to 1.5). BUT, the estimated number of clicks and CTR are nearly doubling as I move from $0.10 to $1.00.

 

So I'm just hoping someone can help me understand this. If the number of people seeing my ad (impressions) and ad position are pretty much the same, regardless of whether I set my Max CPC bid at $0.10 or $1.00, why would my clicks and CTR double at $1.00 compared to $0.10?

 

Thanks a lot!

2 Expert replyverified_user

Re: Trying to understand the daily forecasts chart

Top Contributor
# 2
Top Contributor

Hi there Daniel;

Well... We need to see the chart to analyze it better, but as a first impression I would say this:

 

Statistics is the key here. The margin of error is  within the same order of magnitude  of your values (i.e. Metrics: CTR, impressions, average position)

 So, statistics becomes complex. In those cases, when you try to get a statistical estimate the result is a range of values, rather than a distinct figure.

 

In other words: if you were to change the Max CPC to 5, or 10,  the estimate  given by the system would be more accurate. 

Remember; these are all statistical estimates, and the margin of error (which Google does not report) could be wide.

Moshe, AdWords Top Contributor , Twitter | Linkedin | Community Profile | Ad-Globe
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Re: Trying to understand the daily forecasts chart

Rising Star
# 3
Rising Star
Hi Daniel,

I agree with Moshe here.

Any projections that Google AdWords provides us are not to be taken literally, those are just best case scenarios for our themes, if we were to implement them.

Like Moshes said, the margin or error could be very wide here, so proceed if you will but keep in mind that the traffic data you see later could very well not match with the projections.

As for your question as to how does minor changes in ad positions can bring about such a huge change in performance. This is very much possible. As the name suggests, Average Position is the average of the ad positions your ad shows up on, an avg position of 1.5 implies your ad will show up more on the 1st position as compared to 1.6 where the number of times your ad shows up on 1st position (which will be lower).

There have been studies that have proven that User being served ads tend to click most on the top 3 ads, which is why they are the most coveted positions on the SERP. Also, since the frequency of your ad showing up on the 1st position is higher now, there is a strong possibility that you will garner more clicks than a lower avg. position.

Just raising your bids and achieving higher ad positions will not help you get more cilcks, you need to ensure that your ads are being triggered by relevant queries and that your ad messaging is as concise and relevant to the users query as possible. Its only when you optimize all the aspects of your account, that you can achieve better performance.

Hope this makes sense!

Cheers!

Shashank
Cheers,
Shashank Singh, AdWords Rising Star |
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Re: Trying to understand the daily forecasts chart

Visitor ✭ ✭ ✭
# 4
Visitor ✭ ✭ ✭
That makes sense. Thanks a lot for your reply. Much appreciated!

Re: Trying to understand the daily forecasts chart

Visitor ✭ ✭ ✭
# 5
Visitor ✭ ✭ ✭
Thanks a lot for the reply, man. Very helpful.

Re: Trying to understand the daily forecasts chart

Visitor ✭ ✭ ✭
# 6
Visitor ✭ ✭ ✭

This is the chart I'm talking about.  If you have time to take a quick look, that'd be great.  More generally, I'm just trying to understand how I should use the chart to set my bid.  For example, in this chart, why would anyone bid at $1.00, when they could bid at $0.10 and get almost the same amount of (estimated) impressions and ad position.  And what causes the sharp increase at $1.32?  Are there any good resources (books or online videos) that explain how to use this chart to set bids?  I read Ultimate Guide to Google Adwords by Perry Marshall, but I didn't find it all that helpful.  Thanks again!

 

Chart.jpg

Re: Trying to understand the daily forecasts chart

Top Contributor
# 7
Top Contributor

The step function, in theory, represents  the point in which the system estimates,  based on your past performance and statistical analysis that if you higher the CPC, you would likely get more clicks. But as you can see  the change is not significant for this specific keyword.

Moshe, AdWords Top Contributor , Twitter | Linkedin | Community Profile | Ad-Globe
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Re: Trying to understand the daily forecasts chart

Rising Star
# 8
Rising Star
Hi Daniel,

As Moshe again has rightly said, the steep increase in traffic that you see on the graph represents the spike that you can see when you increase your bid or budget.

If you see the horizontal axis, it ranges from CA $0 to CA $3.97. This is basically telling you that range of bids you can set for your themes and and the traffic that you will get for the bids.

If you look at the graph, there is a vertical line on it, much like a radio receivers frequency indicator. If you change the bid in the text box above the graph, you will see it shift higher or lower depending on your bid and the subsequent impressions and cost estimated will also change accordingly.

Hope this helps you and clears things up!

Cheers!

Shashank
Cheers,
Shashank Singh, AdWords Rising Star |
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