The mystery about Low Bidding

by ns17
19 replies
  • PPC/SEM
  • |
Hey Warriors I am new to this IM and have started few campaigns on BING.

The things that's confusing me is that if we are bidding low on the keywords then does our Ads are appearing on the search network. From what I understand is that we need to bid low on the keywords in order to minimize our cost. However if the Bid is low then the search network says your ads are not appearing due to LOW BID.

Then where exactly our ads are running if we are running a campaign while bidding low on the keywords. This is puzzling me any help on this would be highly appreciated. thanks
#bidding #low #mystery
  • Profile picture of the author solarwarrior
    You need to find those keywords.

    That's the catch.
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  • Profile picture of the author hpasha
    Low Competition keywords that also converts into leads will solve the puzzle.
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    • Profile picture of the author dburk
      Hi ns17,

      If you bid too low your ads will display little, or not at all.

      I think you may be a little confused about how to bid on keywords. While it is true that bidding low will lower your CPC (Cost Per Click), it doesn't always translate into a lower CPA (Cost Per Acquisition), which is far more important metric than CPC. However, neither CPA, nor ROI are nearly as important as maximizing total profit, which should be your primary objective.

      Often bidding higher will increase impressions, CTR, and conversions to the point that you make more total profit than could ever be possible with a lower bid.

      The key is to determine the average value per click for a particular keyword and then bid at, or below, the value per click average to see where "click volume" and "value per click" combine to yield the highest total profit.

      The bottom line is that you need to test both high, medium, and low bids, gather data and allow that data to inform your decision making process, otherwise you are just making wild guesses.
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      • Profile picture of the author solarwarrior
        Originally Posted by dburk View Post

        Hi ns17,

        If you bid too low your ads will display little, or not at all.

        I think you may be a little confused about how to bid on keywords. While it is true that bidding low will lower your CPC (Cost Per Click), it doesn't always translate into a lower CPA (Cost Per Acquisition), which is far more important metric than CPC. However, neither CPA, nor ROI are nearly as important as maximizing total profit, which should be your primary objective.

        Often bidding higher will increase impressions, CTR, and conversions to the point that you make more total profit than could ever be possible with a lower bid.

        The key is to determine the average value per click for a particular keyword and then bid at, or below, the value per click average to see where "click volume" and "value per click" combine to yield the highest total profit.

        The bottom line is that you need to test both high, medium, and low bids, gather data and allow that data to inform your decision making process, otherwise you are just making wild guesses.
        Partly correct.

        It is possible to profit with lower bids.

        I have been bidding not more than 1 dollar per keyword in my campaigns.

        However, as dburk stated, you need high cpc initially to get clicks and impressions asap so you can find those low bidding keywords.

        PPC is an art.

        You need to enjoy the process, rather than looking at the money at the end.
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        • Profile picture of the author dburk
          Originally Posted by solarwarrior View Post

          Partly correct.
          Hi solarwarrior,

          Really, only "partly correct"? Please tell which part wasn't correct?

          Originally Posted by solarwarrior View Post

          It is possible to profit with lower bids.
          I'm pretty sure no one on this thread has asserted otherwise.

          I was simply pointing out that lower bids frequently lead to much lower total profits, and sometimes negative returns while higher bids often return higher total profit.

          My key assertion is that you should not assume that lower bids will increase profits. There is generally an optimum bid, one that yields the highest total profit for a given time period, and that optimum bid should be your objective. The only way to find it is to set aside assumptions and test. Why guess when you have data?

          Originally Posted by solarwarrior View Post

          However, as dburk stated, you need high cpc initially to get clicks and impressions asap so you can find those low bidding keywords.

          PPC is an art.

          You need to enjoy the process, rather than looking at the money at the end.
          I like to think of PPC as a game of strategy, and for me it is about 10% art and 90% science. Using scientific methodology to test creatives that make up the "art". And like any game of strategy it becomes more difficult as the your competitors become more sophisticated in their use of strategy. When you look at it as a test of competing strategies you can take it to a whole new level, for me it is about crushing competitors and taking market share.

          PPC marketing at the pro level is a little like poker, chess, and day trading combined. Gambits, bluffs, analysis, and strategies, using real money and the fate of entire companies at stake. What could be more fun that?
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  • Your ad rank is determined by quality and bid. For the same quality, bidding lower by definition lowers your ad's ranking. This could mean you show on page 2 or beyond which could mean that your ads are rarely seen since few people go beyond the first page. Sorts of defeats the purpose of advertising.

    You need to know the difference between a bid (also called maximum CPC by some) and what you actually pay, the actual CPC. This is calculated based on your quality and what others are willing to bid. You almost never pay your bid.

    More important, you need to understand quality. This is more important than bid because it's a auction and prices are determined by your competitors, a supply and demand situation. If certain number of advertisers are willing to pay (bid) up to $1, and you bid only half that, you are putting yourself at a disadvantage: lower position which results in less clicks since more people click on higher positioned ads. It's more important therefore to improve your quality (higher CTR) than trying to rank based on bid. It's something you can control. You can't control what others are bidding which is determined by the market. With higher quality, you are protecting yourself against others and you are rewarded with lower actual CPC than with a lower quality ad.

    CPC is not the most important metric. CPA/ROI is but at the same time you want to maximize profits which will only happen if you get higher CTR, another argument for striving for higher quality and position.
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    • Profile picture of the author owynjohnny
      Its all down to the research, we do many PPC campaigns for our clients, first part is always keywords research. Get this right you have a fighting chance of good conversions.

      Next part is relevant ads and keep them catchy, these must then link to a relevant page.

      Don't waste your money do your research first..

      good luck
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  • Profile picture of the author svetod
    That's wrong thinking, you have to bid high in the beginning in order to achieve a good CTR. Later on, Bing will reward you by giving you high quality score and decreasing your CPCs.

    If you keep bidding low, you'll end up having low quality score and you'll never get to pay low per click.

    Good luck

    Svetlin
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    • Originally Posted by svetod View Post

      you have to bid high in the beginning in order to achieve a good CTR. Later on, Bing will reward you by giving you high quality score and decreasing your CPCs
      That is simply not true.

      Bidding high (meaning highER than what the average advertiser is bidding) means you will achieve a higher position. Higher positions do get a higher CTR. That's why everybody wants a higher natural ranking in SEO. It's the same with PPC.

      BUT, Quality Scores are not calculated based on straight CTR. It's a comparison of the average which takes position into account. If other advertisers have had better CTR at that position, your poor ad will not get a better QS. A poor ad does not get its QS increased simply because your CTR was higher as you increased your bid. Sure, comparing your own CTR shows it is higher, but that does not make it's quality better compared to the competition. Their better ad also has a higher CTR at each of those positions.

      Advertisers have to realize they are competing against each other. QS is a relative measure of your CTR against each other, not against yourself. You can have a great ad with QS of 10 at any position and for any bid and conversely low QS at any position for any bid. There is no relation between bid, QS and position.
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    • Profile picture of the author ghost209
      Originally Posted by svetod View Post

      That's wrong thinking, you have to bid high in the beginning in order to achieve a good CTR. Later on, Bing will reward you by giving you high quality score and decreasing your CPCs.

      If you keep bidding low, you'll end up having low quality score and you'll never get to pay low per click.

      Good luck

      Svetlin
      I agree with Svetlin. with every ppc network I do, I start off bidding higher. That way i can force my way to the top, get higher quality traffic, and improve my CTR.

      then once I test it, I start to optimize my campaign and will work my way down
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  • Profile picture of the author Oziboomer
    Testing is the key.

    Usually testing costs money and a long term commitment to a project.

    Removing low quality score keywords or improving onsite relevance to the targeted keywords is important particular if there is search traffic for the keyword or more importantly "buyer" search traffic for the keyword.

    In many cases you can get good results with lower bids but I would encourage you to test what bids give the best results.

    You should try some things like odd number bidding for certain keywords for example. Many people would bid whole number bids so for example $2.00. Test different things like $2.01, $2.02, $2.11, $2.16 etc until you get the right mix of position on the page and CTR to match your expectations.

    Test different ad copy...use the experiment functions.

    All these things take time but if you have a solid business and are paying attention to other factors once people are on the site then PPC is a great place to get quality traffic.

    You can always combine testing short term keyword orientated ads on somewhere like FB and then bring those that are successful into bing or adwords etc.

    Sometimes you get lucky but usually testing over a longer period ultimately allows you to refine things so the ROI can be incrementally improved.
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  • Profile picture of the author ns17
    thanks everyone for your response.
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  • Profile picture of the author badboy_Nick
    Originally Posted by ns17 View Post

    From what I understand is that we need to bid low on the keywords in order to minimize our cost. However if the Bid is low then the search network says your ads are not appearing due to LOW BID.
    OK this is where you are going wrong - your ultimate end goal is PROFIT. In order to make a profit (especially a large one), you need a lot of clicks. You can only get clicks if you bid on a large amount of keywords ... and most importantly, you bid high.

    Yes, you bid HIGH! You want to aim for ad positions 2-4 and ensure your CTR is at least around 1-2% at campaign level. If you can't keep CTR high, Adwords will penalize you and want you to pay more to keep your ad positions and high click volume. So ensure you get that high CTR by writing good quality ads, add negatives and pause anything that goes below 0.5% CTR.

    Spend some money to gather data with CTR being your short-term priority. Get a good number of clicks in from a good number of keywords, see what converts and then optimize for profit by pausing keywords and throttling bids to push them into profitability.

    But in order to get there, you need to spend money so expect to break-even in the beginning or make a small loss. Only AFTER you have tested out these keywords can you pause your non-performers and keep your winners in order to make a profit.

    Once you have established a solid CTR, you can then also throttle down your bids further on your converting keywords and Adwords should also reward you with some automatically lower bids for your high CTR and Quality Score.

    That's how I do it for every new PPC campaign I run nowadays. Hope that helps.

    Nick
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  • Profile picture of the author MarkKelly
    There is no mystery in low biding. It's such that you are biding low then your competitors then you will be placed higher in the search engine from your competitors.
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    ppc management

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  • Profile picture of the author SEMResource
    Your ads will still show up, but not as much as the competitor ads that have a higher bid. Your ads may show up on the second or third page instead of the first mostly.

    Check your average placement to see where your ads generally show up. If it is a higher number, then your ads may be lower down the page or on the 2nd or 3rd pages.

    Your best bet is to see which keywords are performing the most for you and focus on those until your budget increases.

    I'd check the keywords that bring traffic in and add them to the relevant campaign each week to see if they have a lower bid rate, yet still get you results.

    Make sure to add negative keywords to your list each week too so that you aren't paying for non-relevant keywords.
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  • Profile picture of the author christina21maria
    Its all down to the research, we do many PPC campaigns for our clients, first part is always keywords research. Get this right you have a fighting chance of good conversions.
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  • Profile picture of the author ghost209
    if you start off cheapest, you're starting off on the wrong foot. And you are going to have an uphill battle.
    they are going to give you their junkiest quality traffic if any at all (do you really want 30,000 clicks from third world countries like nigeria?)


    Sure there are *tricks* tro try and make it work.. but it's really not worth it.

    I know this goes completely against what alot of self proclaimed gurus on WF tell you when it come to ppc. But there's a reason why they are selling $7 wso's and not making millions.

    everyone i know that runs multi-million dollar PPC agencies that control 7 and 8 figure adspend all bid higher. but that's just my 2cents.

    big rule: CPC means nothing. EPC means everything! who cares how much you are paying per click.. the only metric you need to focus on is ROI.

    i'll spend $2 a click all day every day if my ROI is $5/click

    just some food for thought
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