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How can my cpc go up with an increased bid yet the overall position and traffic stays the same ?

[ Edited ]
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# 1
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I am having a problem with my campaign.

 

Let's say that I bid .20 per click and I am in position 3 in Google AdWords over average. I then increase my bid to .40 and I expect to be in position 2. However, I remain in position 3 and I understand that the advertisers in position 1 and 2 have likely bid more then .40, hence the reason why I remain in position 3. 

 

What I dont understand is how my cpc can go up from .20 to around .35 if I remained in the same position just because I bid more. I thought that Google was supposed to take the least amount necessary to beat the person below me? Surely just because I bid more doesn't mean that suddenly the person below me did the same?

 

Can anyone share light as to how increasing ones bid can increase ones cpc yet still remain in the same ad position with no increase of traffic?

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How can my cpc go up with an increased bid yet the overall position and traffic stays the same ?

[ Edited ]
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# 2
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@Zevi S;

This signals a competition. The cost per click depends on the ad-rank of the advertiser below you (his ad-rank/your QS), while your position depends on your bid. You either do not bid high enough or your ad quality (represented by QS) is low. The result is the same position - yet higher CPC.

[edit]: typo corrected

Moshe, AdWords Top Contributor , Twitter | Linkedin | Community Profile | Ad-Globe
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How can my cpc go up with an increased bid yet the overall position and traffic stays the same ?

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# 3
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Thanks @MosheTLVMoshe for helping me understand, 

 

I dont understand what you mean by "completion". Also, from what I understood from Val's video explanation of ad rank, Position is also based on Ad Rank (Bid * QS), not only the bid.

 

Either way, I still dont understand your answer. You start by saying that "The cost per click depends on the ad-rank of the advertiser below you (his ad-rank/your QS)". You conclude by saying that I will have a "yet higher CPC". 

 

Until now I bid a max-cpc of 0.20, my actual cpc is 0.13, my ad position is 3.0, QS is 10.

I now bid a max-cpc of 0.40, my actual cpc is .23, my ad position is 3.0, QS is 10.

 

As my position didn't change, it means I have same advertiser below me as before. How then can I be paying more if the amount I am supposed to pay is the advertiser below me's Ad Rank over My QS. Surely that hasnt changed just because I upped my bid?

 

(Or are you saying that my scenario is actually impossible and my ad position must have gone up if my cpc has gone up?)

 

 

How can my cpc go up with an increased bid yet the overall position and traffic stays the same ?

[ Edited ]
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# 4
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@Zevi S;

The updated version of my new proofreading tool "accepts" corrections without approval... That should have been "competition"... Smiley Surprised

Let's say that you bid $10 dollars and your QS  is 8 - your ad rank is 80. (Roughly, because other factors also play a role in calculating)

Let's assume that your competitor's ad-rank is 70. Your price would be $8.75

If in the next auction, your QS is still 8, you still bid 10, and another competitor bids aggressively, let's say:  an ad-rank of 75. You would pay higher,  to keep the same position. At this point you might increase your bid, (to achieve a higher ad-rank). And the cycle goes on.... That's how the cost of CPC has (slightly?) increased every year. 

Moshe, AdWords Top Contributor , Twitter | Linkedin | Community Profile | Ad-Globe
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How can my cpc go up with an increased bid yet the overall position and traffic stays the same ?

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# 5
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@MosheTLV that makes sense to me, as you pay more because someone else has become more competitive.

 

However, do you agree that without the addition of this new aggressive bidder that you mention, even if I now bid $20 dollars I would still only be paying that same $8.75 for my click provided that my new ad rank hasn't overtaken a competitor whose ad rank is higher then 80?

How can my cpc go up with an increased bid yet the overall position and traffic stays the same ?

[ Edited ]
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# 6
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@Zevi S;

Correct; but this assumes a "steady state" among all advertisers bidding on the same keyword. Practically, in competitive markets, there is no "steady state" and  bids slowly climbing up, and as a result the CPC.

This is my interpretation of the scenario in your query.

Moshe, AdWords Top Contributor , Twitter | Linkedin | Community Profile | Ad-Globe
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How can my cpc go up with an increased bid yet the overall position and traffic stays the same ?

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# 7
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@MosheTLV Excellent, so this brings me to the crux of my question.

 

My ad position is 3.0. When I up my bid to 0.40 (my ceiling), this is to try and unseat the top two competitors who have the top two positions. When I remain in position 3.0, I can assume that they have a very high ad rank which I cant compete with. 

 

 

If I instantly see an increase in my actual CPC, you are saying that it must be that at the same time that I upped my bid, so did a below competitor of mine, hence the increase in my CPC.

 

This is hard to believe that right at the same time as I upped my bid, so did my competitor below me.

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Accepted by topic author Zevi S
December 2016

Re: How can my cpc go up with an increased bid yet the overall position and traffic stays the same ?

[ Edited ]
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# 8
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@Zevi S;

Not necessarily;

And, there are a few reasons:

  •  First, avg position could be a misleading metric: as long as the range / span (aka variance)  is not reported. (What is the average of 1 and 5, vs. the average of 2 and 4?). In other words: your "bid hike" could, indeed, secure you a higher position in some auctions. But, depending on competition, could keep you at a lower position in other auctions,
  • Second: it's not only one competitor, but rather competitors; all bidding simultaneously on the same keyword: this transforms the problem from single variable statistics to a multi variable statistics.
  • And lastly; your competitor might be using a bid management  software  to closely monitor and  change the bid.

 

 

Moshe, AdWords Top Contributor , Twitter | Linkedin | Community Profile | Ad-Globe
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How can my cpc go up with an increased bid yet the overall position and traffic stays the same ?

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# 9
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@MosheTLV 

 

Thanks for explaining this so clearly, I now understand perfectly.

 

Ingenious Smiley Happy

 

Regards,

 

Zevi