Should I bid $100 on 500 broad match keywords?
I'm thinking of bidding $100 on 500 broad match keywords so my ads always beat the competition. If I understand correctly, the price I pay is the bid x quality score of the competitor below me? I currently have an average CPC of $3 and get about 80 clicks a day. If I bid $100, would I be looking at an average CPC that's close to $50 or would it be much lower? I don't want to get nickeled and dimed if I do go through with this.
Bidding $100 or $1,000 wouldn't change my average cpc, right?
Re: Should I bid $100 on 500 broad match keywords?[ Edited ]
March 2013 - last edited March 2013
You need to be very careful if you are thinking about doing this. And I mean VERY carefully.
If your competition actively monitor AdWords carefully, they could help increase your CPC while keeping theirs lower. Put it this way, I manage accounts, and in some industries I work in, a few do tend to bid a bit out of control. (i know which ones do)
I will start increasing my bids which in turn start pushing your CPC up. If my average position improves too much or my actual CPC goes up too much I know where I'm getting close to their adrank and I can lower it as needed. I will monitor this closely for a while then they usually drop off for a few weeks. Maybe they spent their budget a bit early, who knows why ;-)
If you are in the No 1 spot for your terms, your CPC may not change by upping your bids, but your competitors bids will have an effect on your CPC's
It's also called a max CPC for a reason, are you actually willing to pay $100 for the click? If not, I'd not recommend even trying it.
Re: Should I bid $100 on 500 broad match keywords?
Hi replaced, I'd add to Adam's excellent reply in the same vein - perhaps taking it further. If you actively engage in trying to outbid competition the only likely outcome of this is that you'll end up paying a lot more for your clicks and harm your ROI.
Ad Position, CTR and Conversion rates all need to be studied in quite some detail to come up with a decent plan and simply pushing, pushing, pushing to be #1 in the list is rarely the best strategy, if only because if everyone else does the same thing you're just pushing the CPC up.
Have a look at this video by Hal Varian. It's an excellent examination of bidding strategy.