I was curious if anyone knows of this: It's well known that when your CTR has risen to some % and established consistency there, you can afford to lower your max cpc bid and still retain the same ad position. Specifically, when is the CTR considered "established" where you may lower the CPC bid and still have the same ad position/rank? What exact signs do you look for on timing this bid lowering? Thanks for the comments!
Letian, the key here is to monitor for sales and conversions. Depending on your volumes it may be worth comparing your analytics with your CTR and ranking. Different market categories have different characteristics. I have one client that maintains CTR's of 15% from an average ranking of 1.5 and is probably underbidding competitors by 50%. In another category 5 to 6% CTR seems the norm even thought the client has similar ranking levels.
Thanks for the reply, dburdon. It does depending on the market, but do you suggest to make a higher than usual max bid at first to get exposure for the purpose of getting a consistent CTR, then lower the CPC bid? I've heard that this is a good strategy... I'm just wondering if it matters when you start lowering your cpc bid to "underbid" those bad CTR competitors? Appreciate it!