I just started Adwords after reading everything I can on the subject. It's a sub niche and I'm only using exact and phrase match for now. I set my initial limit to 0.04 so it would let me know the lowest price it would accept for each keyword. Firstly, why would a bid price be 0.20 CPC if there are only two other ads showing? And secondly, why does it say "first page bid estimate 0.20" but when I increase it to 0.20 it says "first page bid estimate 0.45"? This has happened to a lot of my keywords. Google must think I've nothing better to do than sit here changing my bids while they keep bumping them up. What is going on please? thank you
In 2 words - Quality Score What you are charged will go down as your Quality Score goes up. Quality Score goes up for 2 reasons 1-relevancy - how closely your keywords match the landing page.2 - click through rate. If the cost keeps going up it's a sign that's there something wrong - probably with your match of keywords to your landing page, or even that your landing page is altogether something that google doesn't like.
Thanks magda, I understand that CPC are higher when you start out because of Quality Score, but I still don't understand why the estimated first page bid is going up and up right in front of my eyes! Honestly I wish I was using Jing to show you what was happening. I was increasing it to exactly what it said, then it went up more.
The first page bid may be going up because other advertisers are increasing their bids, because Google is increasing the CPC as a result of your ads not performing to their standards (mainly click rate) or a combination of both.
Thank you promisem, but this is happening over seconds, not days or hours. And this all happened within one hour of me getting an Adwords account.
There is not simple rule or formula that you can apply to figure out what you need to bid to me in the top spot because Google uses a formula that factors clickthrough, bid, quality score, etc.. Something I have had success with is setting my max bid a little high to start so I can get listed and establish my CTR. Once I know I am getting a good CTR and I am placing well I will start reducing my max bid until it has an impact on my ranking. That said, it is confusing to start.
First page bid estimates are based on your QS. As the system gathers information (impressions and clicks) from your campaign, it revises the estimates. This is normal on new campaigns since less impressions is less accurate. QS changes for each search for all advertisers as well and a bunch of other factors. It's a moving target. I believe the FPBE does not take into account location. You cannot say there's only a couple of advertisers because that's all you see when doing a search. It doesn't work that way. You are effectively competing against every other advertiser in the world for that keyword, past and present.
They are telling you that you are doing something they don't like. Most probably on your landing page.
Ewan, I see the same thing, and I can tell you that it happens only with certain keywords. You can set up an alert that sends you an email when you are being outbid, your click rate falls below a certain level, etc. So if you outbid someone and knocked them off a position they want, they could get an automated email from Google and literally within minutes of your bid change their bid on the site and boost the minimum above you. I haven't tried it, but I bet you could even get the alert while you're logged into your AdWords account. I'm not saying this is definitely the reason, but I've been doing this for a while and it only seems to happen when bidding is highly competitive. And it doesn't happen on keywords with a low QS. It's happening with keywords that have a QS of 7, which means the ad, click rates and landing page are solid.
Thanks for the higher bid tip dsgehl, and for everyone's comments. I intend to hire someone to do this full time, but I thought I'd better learn it myself first. Looks like it's gonna take longer than I imagined!