I'm running a campaign in adwords, Everything was going fine, i was getting sales and even the CPA was much less than the max limit, However my ads were showing on avg position 6-7 Then i decided to raise the bids and get the ads to displayed on higher position, Ads did started to appear on 3-4 position but the sales dropped significantly Both ads and kws are same, juts the bids were increased
2 possible reasons in my mind: 1) You haven't sampled over a long enough period of time. If you've been running for only a couple of days, maybe the first few days have just been lucky. 2) You tend to find that the people who scroll down through the listings are looking for something specific, that is, they weren't satisfied with the first few results hence scrolling down. If these people click your advert it's not just a "curiousity" click, its because you have what they are looking for and thus your sales rate can often be higher lower down. My advice is that you see how you're doing in your new higher position for a bit longer, if it's simply not profitable bid lower and return to the lower positions. If this doesn't solve your problem then you were probably just lucky, or perhaps its another fundamental problem like market saturation, are you offering something a lot of people have already bought.
My suggestion is to check and make sure you don't have any 'optimization' options picked. Make sure that Google is not trying to average your cost at some amount. If you are paying more per click, Google may be showing you less often. If you are not leaving anything to Google, my suggetion would be to start bidding less and see what happens.