I've been playing with adwords for a few weeks now and am having some success with my campaign. But I've just read a post giving direction on how to obtain a decent ad positon for a low CPC. It recommended starting the CPC off high to secure good positioning and then gradually work the CPC down as the average drops. If I am reading this correctly does this entail defining the Max CPC for each keyword? At the moment I'm defining a monthly budget and a maximum click price. In doing so I started off high and my average click price has dropped down nicely while my ads are averaging 4.1. but my CPC isn't as low as the figures I saw quoted in the other post I mentioned. I've got my CPC down to 0.28 but these guys were quoting the sub 0.1 mark with postion 1 ad placements! I'd like to try and apply the technique of starting CPC of high and dropping it but I am currently running with a lot of keywords. Is it possible to set a maximum CPC for an ad group rather than individual keywords, and if so, how? Oh, and I have a final question. This particular campaign I'm running, I am limiting the ad displayed to Australia, Canada, UK & US and the item has a +$50 price tag - should I increase the scope of my campaign to include other areas?
Sounds to me like you're using the AdWords starter edition? Setting budgets for seperate adgroups should be self explanatory for the full edition. The technique you've mentioned is legitimate, the idea is to set a really high CPC so that you're pretty much guaranteed a higher position and thus you'll probably get a higher CTR. This builds up a good CTR history, makes google think you're brilliant and gives you extra bidding power allowing you to pay less than a competitor for that position. Getting to pay just 1 cent for the same position is insanely difficult, yes, your minimum bid would drop to 1 cent but a minimum bid is exactly just that (the minimum you have to pay to appear), not the minimum you have to pay for that position. To pay just 1 cent for the same position you'd have to outdo the CTR of your competitors massively, like a 100% CTR or something Just in case you're not following, I'll explain why this technique works. The amount you pay is determined on 3 things, competition, your CTR and your quality score. If we concentrate on just the competion and CTR aspect I can show you very quickly how it works. Your "bidding power" is what determines your rank. If person 'A' has a max CPC set to $1 and a CTR of 10% Their total bidding power would be : 100 (thats $1 times 100, cos there's 100 cents in a dollar) X 10 (the percent) = 1000 bidding power units Person 'B' has a max CPC which is $0.50 but has a higher CTR at 30% (ok a bit unrealistic) Their total bidding power would be : 50 X 30 (the percent) = 1500 bidding power units Person B only has more bidding units so gets to rank higher than his competitor for less money. Sorry if insulted your intelligence here. I'm just explaining why getting a high CTR can sometimes allow you to pay less than your competitor for a higher position.
Getting clicks under 0.10 and still maintaining high position is probably not going to happen. Whatever your read was probably a unique case, or bragging about results from a limited pool of keywords. Your geo settings are good, just make sure the advertiser delivers to those countries, otherwise its a waste of traffic and money...
"I've got my CPC down to 0.28 but these guys were quoting the sub 0.1 mark with postion 1 ad placements!" It depends on how competetive your niche is, but the technique is strong and you can achieve good positions for about 0.15 to 0.20 if you consistently have a good score/ctr. "I'd like to try and apply the technique of starting CPC of high and dropping it but I am currently running with a lot of keywords. Is it possible to set a maximum CPC for an ad group rather than individual keywords, and if so, how?" Just set up a new adgroup within the same campaign. OR just select the keywords that you want to increase the bid on and set the max cpc for that group. "Oh, and I have a final question. This particular campaign I'm running, I am limiting the ad displayed to Australia, Canada, UK & US and the item has a +$50 price tag - should I increase the scope of my campaign to include other areas?" It all depends on whether the product has a market outside of these regions. People from different regions may have a different reason to buy the product and you may want to define separate campaigns for separate regions if there is a market outside of the regions for the product. $50 may not be as important for geo settings, but percieved value of the product is. Different regions might have a different percieved value for your product and you may want to advertise only in regions where you feel/know that the percieved value for the product is at least $50.
Thanks very much for your comments guys. In response to T Media's comments regarding the starter addition, no I'm using standard addition, just not familiar enough with it. I have worked out how to set the max CPC for ad groups and now I'm up in the top slots for most of my keywords. If I am to use this techinque, how long should I keep the max CPC high before I can start to ease it down to reduce costs?
The Avg CPC you pay will decrease over time if you consistently hit a high CTR. Lowering your max CPC in a sense is not necessary as it will not help you pay any less, the process is automatic anyway, just as long as you hit a high CTR you will pay less. The danger is when a competitor ups their game by either increasing their budget or CTR. Then your Avg CPC starts to move up in order to attain the higher position. With this technique you keep a higher CPC for as long as you're comfortable with... there is no "ideal length of time"... as always the most important thing is cost per conversion, the end goal is to lower your max CPC to a level that allows for profit. This technique can only be considered a "bonus" technique to put your CTR history in good standing and help facilitate cheaper bids.