I currently have a max bid for a keyword at $1.00 and my average cpc is $.93. I would like to increase my position though. If I up the bid to $2.00 for example, will my average cpc still stay at $.93 or will my cpc go up? Hope that question makes sense. Thanks for the help.
In principle Google only charge you what is required to beat the bid in the position below yours by $.01. So, in order to leapfrog the ad ahead of you, your ave. CPC will certainly increase to more than $1.00. The only way to know exactly how much more it will cost is to try it and see!
No. ACtually the real answer is the CTR The more CTR you have will help you get more better position. You should research in marketing tactics.
Almost completely and utterly wrong! There is no direct link between CTR and position. CTR plays a small part in determining the QS but it is probably the most difficult factor to develop and least productive in raising QS. It is possible to have high QS, i.e. 9 or 10, and low, even 0% CTR. If you have low QS it is better to work on relevance, ad-text, landing page, etc. to improve it. Your ad's position is determined by its ad-rank. Put simply, Ad-rank = Quality Score (QS) x Bid, e.g. OP is in position 5 with QS of 6 and bid of $1 (Ad rank = 6 x 1 = 6) Advertiser in position 4 has qs 9 and is bidding $1.50 (Ad rank = 9 x 1.5 = 13.5) OP raises bid to $2 , Ad-rank now is 6 x 2 = 12 so ad remains in position 5 with ave. CPC of $0.93. OP would need to bid $2.26 (13.5 divided by 6 plus $0.01) to move ahead and ave.CPC = $2.26 Since you cannot know your competition's QS or bid, the simplest, quickest and only way to know what would be required to improve your ad's position is to raise your bid and see what your new ave. CPC would be. If there is room for improving QS you can then calculate the effect that would have on your bid (although I suggest you should be working on QS anyway.)
Put the higher bid in and with more clicks as a result eventually your QS will go up dropping you ave cpc! Its a game of poker, those who are brave enought to pay more early on will get the higher QS and can therefore drop their bid and still stay high!
Your average CPC will more than likely go up with an increase in bids. You will also notice an increase in position. The key is to compare what effect if any the increase in position has on sales and whether the increased average CPC is worth the extra sales generated. I assume you are keeping your budget static, so compare sales before the increase in max CPC with that after the increase.
Okay, I concede this is theoretically still, at the moment*, possible with the new QS system but ONLY if you can achieve a consistently, significantly, higher CTR than Google anticipates you would get for any particular position. Then, your QS may "eventually" rise by a point. Of course, the downside is that if you bid to a higher position but achieve a lower CTR than the ad you displaced your QS is likely to drop! But, in general, IMHO and experience, CTR is now of minor significance to QS. If you have low QS you can often improve it by 2 or 3 points in 24 hours by working on ad-text, relevance, etc. thus achieving the same benefits (improved position and/or reduced CPC) without paying anything extra. *If the new QS system works as Google describe then this method will soon become obsolete since whatever CTR you achieve in a particular position will eventually become the "benchmark" or norm against which CTR performance is judged. The ability of advertisers to achieve significantly better CTR for position will become more and more difficult; hence, CTR will be a diminishing factor in QS.
Wow. Thanks for all of the information everybody. My quality score is good, 7 out of 10, so I'm gonna bump up my bids and see what happens. Maybe I'll post the results when I'm done.