After spending hours struggling with Adwords to make my campaigns profitable, I noticed that Google increases bids for keywords even if there's no one else bidding for the same keyword. I made a controlled experiment where I entered words (strings?) that give 0 (zero) search results in Google Search. For example, I entered the keyword "aa11ss22dd3322ss" for one of my ad groups. Since there are no other users bidding for the same keyword, a max cpc of $0.01 should be enough. However Adwords said Bid is below first page bid estimate of $0.15 This is really interesting and maybe the reason why the bids keep increasing as our campaigns convert. Correct me if I'm missing something. Otherwise this smells like fraud. Best regards, PS: And I'd really appreciate if someone could suggest an Adwords alternative where I can have same conversions for lower prices.
This is common knowledge. Adwords does not work in a free market bidding system. Google adjusts bids as they see fit, based on quality scores and other factors. Most other PPC search marketing engines do the same, and for good reason.
The reason is in a free market bidding system without quality scores etc people would be trying to get the fewest people, the people that actually buy their products, to click their ads, not the most. For example they could create an ad that says "Click this only if you actually want to buy product X". That way they get the highest conversion rate and make the most money. Quality scores prevent this by charging you more for ads if you have a low ctr. Fixing ad prices also serves google as well, they get more control over which ads run and they make the most money.
There was an interesting thread on Webmasterworld about this subject, http://www.webmasterworld.com/google_adwords/3820801.htm The main gist of it seems to be that min. 1st page bid is based on QS and not the number of competitors. Therefore, since I imagine it would be difficult to get any relevance, etc. for "aa11ss22dd3322ss", I expect it has low QS and hence, a high bid.
This is known as "shill bidding" and is a crime under FTC rules. I seriously doubt you would be able to prove this though because if something is being done by google to achieve the same result as shill bidding then they would have fixed their software up to make things 100% legal when subjected to an audit. Google is way too large and to a degree much too transparent to be able to get away with something like this.
What Google is doing is in no way illegal. They have no obligation to run their system under a free market, as long as they make that clear to their users.
I didn't say google is doing anything illegal. What I said was that google, being the large and transparent company that it is cannot brazenly get away with anything of this scale. However, creating fake testimonials, fooling buyers into thinking there are other real buyers(who are actually shills set up by the seller), driving up the bid of an auctioned item using shill bidders; these are all borderline illegal and against FTC rules. So my point was that if google appears to be doing this then I am sure that their armies of lawyers and programmers have figured out a way to legally insulate them in case of an audit. So in other words they are playing a dirty game and getting the same results but going about it "legally".
[/quote]There was an interesting thread on Webmasterworld about this subject, http://www.webmasterworld.com/google...ds/3820801.htm The main gist of it seems to be that min. 1st page bid is based on QS and not the number of competitors. Therefore, since I imagine it would be difficult to get any relevance, etc. for "aa11ss22dd3322ss", I expect it has low QS and hence, a high bid.[/quote] @bjewelled - thanks for the above post - I've been trying to find some information on this for a while now - it completely confirms what I've been thinking about minimum first page bid - BUT I think Google isn't being completely honest here. I don't think they're using the actual account's QS to show the first page bid position - I have a lot of accounts with an average QS of 9 or above and the estimated first page bid is still way higher than it 'should' be - my take on things is that they automatically assume a low QS (maybe around a 4 / 5) and then give the estimate based around that...
Since Google says they base the bid on factors including webpage relevence/quality and CTR, they can't be accused of shill bidding. Their machine, their rules.
Google does adjust the bids, but it is based on numerous factors including relevance, quality score, bidders, etc. I have a feeling that your ad would show up sometimes, but not for every click.
Nosense! Huge corporations commit illegal acts every single day ie. price fixing, anti-trust violations, violations of legistlative requirements, etc. It's just a matter of being caught and who is going to catch them out. Remember enron? enron was purposely causing power blackouts in order to increase their power prices. We, adwords users have made google who they are. We just take everything they dish at us lying down. We have only ourselves to blame. As far as transparency goes, nothing can be further from the truth. They are a bunch of "glamourized crooks" who change their algos, prices, rules any time they feel like it.