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When Starting An Account - Should The CPC Bids Be Higher?

Explorer ✭ ✭ ☆
# 1
Explorer ✭ ✭ ☆

There's always a confusion with the CPC Bids.

 

If One Is Starting A New Account - Should The Bids Be Higher?

 

Or Should They Be Lower?

 

Reason for higher bids - If your ads are in the top 4-5 positions you would have a higher CTR. Thus, better the quality score and furthere as you go on spending, the bids would lower down with a good quality score.

 

Let me know if this is correct.

 

Thanks,

Chetan.

2 Expert replyverified_user
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Marked as Best Answer.
Solution
Accepted by topic author ChetanP
September 2015

Re: When Starting An Account - Should The CPC Bids Be Higher?

[ Edited ]
Explorer ✭ ☆ ☆
# 3
Explorer ✭ ☆ ☆

Hello ChetanP, this is good question, but it's not complete. We need a few more things to give a good answer.

 

Should The CPC Bids Be Higher at the begining - is a question of strategy. Strategy is defined as: a plan of action or policy designed to achieve a major or overall aim. Depending on the overall aim you wish to achive, this can be a good thing or a bad thing.

 

-> For example, it can be a good thing as a part of strategy when you made sure you extract the most value out of your visitors by:

 - having a good on-page user experience

 - after you did a lot of A/B testing and you are sure the curent setup is among the best (based on organic or other sources of traffic)

 - after you eliminated all the possible errors that appear in your funnel

 - after you made sure your visitors can easily create favorable reviews

 - after you made sure you can re-engage the visitors easily by social media

 - having a good remarketing campaign active

 

These are just a few things that encourage you to start with higher bids, but it also depends on the competition and how well their process is working.

 

And, as MosheTLV said, it's not only a question of CTR. With high CPC you will feel the burden of any problem amplified.

 

-> If you don't have a very good system in place to monetize and also to satisfy your customers, then starting with high bids it's a very bad idea. Probably you won't be able to sustain that price even if CTR is amazing. There will be many people leaving your site as bounces, maybe they won't feel that the site is trustworthy and so on. Maybe your competitor are extracting more value from cliends by engaging with them again through social media, while you don't.

 

As a general rule, I always make sure I have all the process in the back set up as best as I can, then I start with hgih bids.

 

So the question is: do you have everything in place to get most of your visitors and to satisfy their needs? If yes, then starting with high bids it's probably a good idea. If not, starting with lower bids might be an alternative, even though I don't recommend it.

 

View solution in original post

Re: When Starting An Account - Should The CPC Bids Be Higher?

Top Contributor
# 2
Top Contributor

Hello ChetanP;

The algorithm of compiling QS is not as simple as that. (And that's one of the beauties in AdWords)

QS is not solely based on CTR. many parameters are compiled (Google does not disclose all of them) . However, relevancy to ad-copy and relevent content are major factors.

Read more on how QS is calculated, in the help center article.

 

-Moshe

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’
Marked as Best Answer.
Solution
Accepted by topic author ChetanP
September 2015

Re: When Starting An Account - Should The CPC Bids Be Higher?

[ Edited ]
Explorer ✭ ☆ ☆
# 3
Explorer ✭ ☆ ☆

Hello ChetanP, this is good question, but it's not complete. We need a few more things to give a good answer.

 

Should The CPC Bids Be Higher at the begining - is a question of strategy. Strategy is defined as: a plan of action or policy designed to achieve a major or overall aim. Depending on the overall aim you wish to achive, this can be a good thing or a bad thing.

 

-> For example, it can be a good thing as a part of strategy when you made sure you extract the most value out of your visitors by:

 - having a good on-page user experience

 - after you did a lot of A/B testing and you are sure the curent setup is among the best (based on organic or other sources of traffic)

 - after you eliminated all the possible errors that appear in your funnel

 - after you made sure your visitors can easily create favorable reviews

 - after you made sure you can re-engage the visitors easily by social media

 - having a good remarketing campaign active

 

These are just a few things that encourage you to start with higher bids, but it also depends on the competition and how well their process is working.

 

And, as MosheTLV said, it's not only a question of CTR. With high CPC you will feel the burden of any problem amplified.

 

-> If you don't have a very good system in place to monetize and also to satisfy your customers, then starting with high bids it's a very bad idea. Probably you won't be able to sustain that price even if CTR is amazing. There will be many people leaving your site as bounces, maybe they won't feel that the site is trustworthy and so on. Maybe your competitor are extracting more value from cliends by engaging with them again through social media, while you don't.

 

As a general rule, I always make sure I have all the process in the back set up as best as I can, then I start with hgih bids.

 

So the question is: do you have everything in place to get most of your visitors and to satisfy their needs? If yes, then starting with high bids it's probably a good idea. If not, starting with lower bids might be an alternative, even though I don't recommend it.

 

Re: When Starting An Account - Should The CPC Bids Be Higher?

Top Contributor
# 4
Top Contributor

Hi Chetan,

 

My advice for new accounts is very simple. Never bid more than you are willing to pay for a click.

 

That's it!

 

Best of Luck!

 

Pete

 

petebardo -- Deadhead doing AdWords

Re: When Starting An Account - Should The CPC Bids Be Higher?

Explorer ✭ ✭ ☆
# 5
Explorer ✭ ✭ ☆

Moshe TLV. I am not talking about QS. What I only want to say is should we start with higher bids when launching an adwords account or new campaigns. I dont want to consider the QS part. I am not worried about it. What I only want to know is  - Should keeping the bids higher, getting a good position and thus a good CTR, would lead to a good QS.

 

Thus my understanding is this that a lot of factors are a part of QS and bids. But some keywords also have a history with adwords. When we start with those keywords, does it make sense to have higher bids for better ctr?

 

Thanks,

Chetan.

Re: When Starting An Account - Should The CPC Bids Be Higher?

Explorer ✭ ✭ ☆
# 6
Explorer ✭ ✭ ☆
Chetan, start with what you can afford! Google's algorithm is intended to make it as much money as possible - and by extension that means you too.

So start by working out what you can afford, and work out from there. Either that or work out what's a sensible spend to get a result and work all of that backwards. In either case, Google's there to help.

When it comes to raising your bid, please remember that this is based on your QS (hence all the kerfuffle about QSs). Getting a good click through rate will reduce your spend - remember your place above your nearest competitor is

your bid price x QS + 1 penny > their bid price.

Usually their QS is poor (= their CTR is atrocious). Getting 2x the CTR means your bid price is 1/2 of theirs + 1 penny. 3x, 4x and so on means you'll climb the ladder AND see your bid price go DOWN.

It all takes a little bit of thinking, and reacting to what your customers need of you. Grab a slice of your market!!

Re: When Starting An Account - Should The CPC Bids Be Higher?

Explorer ✭ ✭ ☆
# 7
Explorer ✭ ✭ ☆

Thanks Gemma.

 

But I am yet not able to get this answer that -

 

If I have a new account, i want conversions, controlled costs. The question is, how does it make sense to move to driving traffic and conversions with higher CPC's?

Re: When Starting An Account - Should The CPC Bids Be Higher?

Follower ✭ ✭ ✭
# 8
Follower ✭ ✭ ✭

Are you able to measure conversions and their value ? If so you are also able to calculate return of investment for every conversion so you can decide from there if paying more avg. cpc. is worth or not.

If you sell expensive items like real estate, you can raise the bid, if you sell biscuits worth 3 $ a package , you cannot bid a lot even if you know that in avg. pos. 1 or 2 you will get more clicks and more sales.

So it is about the value of what you sell. You sell expensive, raise the bid, you sell cheap, keep the bid low or do not bid at all.

Re: When Starting An Account - Should The CPC Bids Be Higher?

Explorer ✭ ✭ ☆
# 9
Explorer ✭ ✭ ☆
Chetan - the higher the CPC the more money there is in that segment of the market. Getting a good CTR means you'll be paying an affordable click price - plus getting the traffic that's got serious money. That's because people are already making money there, and have driven the price up.

Getting clever means you pay substantially less in a market that's proven profitable.

If you're new, start with a small campaign - several cities for example. Work it so that you're paying around 1/4 of usual bid - and scale up. Work the price down through reverse-engineering all that info you're getting - and repeat the process. You'll now have an acceptable click price - and the experience to get them to convert.

You'll be singing!!

**************

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