I am working on a campaign. When I used the keyword tool it said that the keywords I am using had very low competition, but in order to get a number 2 position I have to keep my bids up around 4 or 5 dollars per click. Doesn't this seem kind of high for something with low competition?
Which keyword tool did you use?I would recommend google adwords keyword tool,btw that is a bit high min. bid price but for some keywords you can pay even more. Maybe your quality score isn't good so you are paying high bid prices,too improve your quality score you can check if your keywords are highly relevant with the ad copy and the landing page.If you are direct linking to the merchant page you can pay higher prices than linking too your own landing page. First I would recommend that you check your quality score.
My quality score reads ok, The minimum bids are about .10 to .15, but I am paying around $5 per click. I have a review page that I am using, and I am using the google keyword tool.
How long are you runing this campaign?I quess a short time,then you have a problem with your CTR rate,what is yours CTR?
CTR is better than just okay but you have gained that CTR paying high bid prices for the first,second,third ad position. If you are running this campaign for a short time here is definitely the problem because after time you can decrease bid prices and still hold your ad position,the better quality score you have less will you pay for your ads. Has this campaign a huge competition for the keywords you have selected in google adwords?if it has here is also the problem with high bid prices, to remain your ad on a good position. Try to log into your google adwords account and check your keywords to see why your quality score is just "ok",you can also check for every keyword why it isn't "great" .Google will tell you where the problem is,maybe your preview page isn't highly relevant with your keywords,maybe your page showing time is too slow that can also bee a problem for which they will penalize you and give you higher bid prices. Check it out.
Have you tried backing down on your bids, then check your keywords to see where your position is? I have seen a similar situation, and I just played with my bids, and I ended up paying less for being in the same position.
I tried that, I just went under $4, it dropped me to the 4 position, and lowered my ctr a little, Ill keep it set there for awhile and see what happens.
Try to lower your bid cost about 10 percent every time.If you are biding 4 dollars try to bid 3 dollars and 60 cents this tehnique can help you.
Check your quality score, it should be ok/great. (increase the score by having relevant keywords on your landing page).