As an AdWords advertiser with a relatively significant daily spend (over a thousand dollars) and a lot of keywords to manage I've been faced with a problem that I'm sure a lot of you also have confronted. How do I maximize my profit? How do I find the right mix of sales and advertising spend. Example: Position 1: 100 sales per day with average profit per sale of 30 after ad costs = 3000 Position 2: 80 sales per day with average profit per sale of 40 after ad costs = 3200 Position 3: 60 sales per day with average profit per sale of 45 after ad costs = 2700 The ideal position is clearly 2nd place. But as advertisers we have to take into account days with unusual sales that skew the results. The task becomes increasingly daunting when you have thousands of keywords to position and monitor. I've been developing a utility that uses the adwords API and some relativly complex statistical analysis that automaticaly 'floats' (moves ads up and down in the positions) an ad to find the most profitable position. I would appricate some input from my fellow advertisers. How do deal with this problem? Do you have any suggestions? Am I being foolish to even think that I could automate ad positioning?
I feel your pain. Though my spending is only at around 400 to 500 a day, most of that is focused on a program I know inside and out. I'm able to change bids at certain times of the day because I know the sales trends so well. But for new and upcoming programs, I know that I could be losing potential earnings by not having the best ROI ad position and etc. Just the fact that you have developed your own utility makes me think that you are the only one that is close to having a solution. If you ever develop this tool, I'd look into marketing it and making a good profit from it.
Honestly, I think the best position is #1. Why? Because you never know when interest will spike and you want to be in a position to take advantage of that spike.
Best position is #1 sometimes. But some keywords that can be profitable with a low CPC will eat your lunch if you put them in first place.
What about determining people who buy later? I too like being in the #1 spot and think its best. For one product, whenever commercials on tv would come up for it and I was in 1st, orders would pour in, if I were in 2nd or lower, orders would not be anywhere near as high. It turns into somewhat of an impulse buy when demand spikes for certain products.
I've seen plenty of sales take place months later. The product or service sold though depends if it's an impulse type buy or something people research first then buy later.
Regarding positioning, 9 times out of 10 I'm happy to let other advertisers have spots 1 & 2. Lots of "tire kickers" click those first. Of course there are times when spots 1 & 2 make sense - all depeneds on the potential ROI & current level of competitiveness.
An easy solution to reducing "tire kicker" type clicks is picking longer keyword phrases. The single broad type keywords do not do well in first position most of the time unless it's a subject specific/unique word.
Actually if the broad keywords perform at a different level than very specific keywords I still advertise both of them. Even if they include the same word or phrase. That way I can bid up specific phrases with a high ROI and bid down, but still run, the less specific keywords. For instance (I don't sell car parts) say you where selling engine parts for a Jeep wrangler. I might bid a broad match 'Jeep Wrangler Engine Parts' at one level based on performance a phrase matched 'Wrangler Engine Parts' at another level and 'Engine Parts' at another level completely.