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Are other sellers paying less per click?

Follower ✭ ✭ ☆
# 1
Follower ✭ ✭ ☆

Hi all,

 

How can an advertiser be sure that the cost they're paying for each click isn't way more than what their competitors are paying to achieve much the same result (ie. ad position)?

 

If an advertiser sets a keyword's maximum CPC too high, can this lead to them paying more than they needed to?

 

(I only ask because competitors with far shallower pockets are managing to stay in AdWords search network and Google Shopping 24hrs a day 7 days a week whereas this advertiser is burning through money at an alarming rate.) 

 

Swebber

 

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Accepted by topic author swebber
March 2017

Are other sellers paying less per click?

Top Contributor
# 2
Top Contributor

Hi Swebber,

 

This is quite a common scenario. There are many possible reasons for this:

 

The competitor isn't measuring conversions

The conversion tracking is wrong

Their ads get a higher click-through rate and Quality Score = they pay less per click

Their site converts better

 

In some "lucrative" niches click prices are higher than what is sustainable due to a constant influx of new advertisers.

 

View solution in original post

Marked as Best Answer.
Solution
Accepted by topic author swebber
March 2017

Are other sellers paying less per click?

Top Contributor
# 2
Top Contributor

Hi Swebber,

 

This is quite a common scenario. There are many possible reasons for this:

 

The competitor isn't measuring conversions

The conversion tracking is wrong

Their ads get a higher click-through rate and Quality Score = they pay less per click

Their site converts better

 

In some "lucrative" niches click prices are higher than what is sustainable due to a constant influx of new advertisers.

 

Are other sellers paying less per click?

Follower ✭ ✭ ☆
# 3
Follower ✭ ✭ ☆

Hi Rob,

 

Thanks for your reply and for those suggestions of possible reasons. There are always lots of unknowns where competitors are concerned (and it's easy to get paranoid!). I'm curious as to the relationship between a keyword's Max CPC and the actual CPC. 

 

Let's say you set a keyword's Max CPC to be $2.00. You end up paying $1.55 for the click, with your ad displayed in position 1. Is it possible that you could have still been in position 1 but ended up paying less than $1.55 for the click if you'd set your Max CPC lower?

 

Swebber

Are other sellers paying less per click?

Top Contributor
# 4
Top Contributor

How much you pay is dependant on those who are in the positions below you, and their ad rank and bids.

 

All other thing being equal, if you are bidding $2.00 to be in #1 and are paying $1.55, if you raised your bid to $3.00 you will still pay $1.55.

 

Lowering your bid could either see you still paying $1.55 and being in #1, or you could drop to #2 and be paying less.

 

So as long as you are bidding high enough to be in #1, your actual bid makes no difference to how much you pay.

 

Are other sellers paying less per click?

Follower ✭ ✭ ☆
# 5
Follower ✭ ✭ ☆

Makes sense. Thank you.