How To Compete With a Very High PPC Bidder

11 replies
  • PPC/SEM
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I am running a successful ad campaign on Microsoft Advertising (formerly Bing). My page ranking averages 2.5.

I have a competitor in my business sector that has set very high first position bids. Most of them are over $40 per click. I do not have the budget to compete with these high bids and I know my service is better then the competitors. Is there a way to combat this/compete with this? I know who the competitor is and I know that they do not have the budget to sustain those high bids for a long time.

Since my page rank is normally around the second position I had an idea. If I were to set my bids at $30, the competitor with a bid higher than $30 would have to pay that to stay higher ranked correct? I know that the competitor could not sustain $30 per click when there are hundreds of clicks a day.

Is there a flaw in my thinking? Is there something I am missing? Does anyone have a recommendation or a plan to compete with a very high bidder? I look forward to hearing from someone.
#bidder #compete #high #ppc
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  • Profile picture of the author IGotMine
    What's wrong with second position?

    I know who the competitor is and I know that they do not have the budget to sustain those high bids for a long time.
    So let them burn themselves out.
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  • Profile picture of the author HarrieB
    Stay on 2nd position for some time so that they can max out their budget. If they still run ads after a few days means they are making more money than expected so they are still continuing. In that case, u can bid higher than them.

    PS: U can also focus on other keywords.
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  • Profile picture of the author Medon
    Originally Posted by mrripley View Post

    I am running a successful ad campaign on Microsoft Advertising (formerly Bing). My page ranking averages 2.5.

    I have a competitor in my business sector that has set very high first position bids. Most of them are over $40 per click. I do not have the budget to compete with these high bids and I know my service is better then the competitors. Is there a way to combat this/compete with this? I know who the competitor is and I know that they do not have the budget to sustain those high bids for a long time.

    Since my page rank is normally around the second position I had an idea. If I were to set my bids at $30, the competitor with a bid higher than $30 would have to pay that to stay higher ranked correct? I know that the competitor could not sustain $30 per click when there are hundreds of clicks a day.

    Is there a flaw in my thinking? Is there something I am missing? Does anyone have a recommendation or a plan to compete with a very high bidder? I look forward to hearing from someone.
    I have a simple question for you. will you be able to sustain a bid of $30 if say 200 clicks are made per day?. If you can, then your strategy is right. Go a head.
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  • Profile picture of the author options
    You already say you are running a successful campaign so whats the problem?

    Its not all about the bid amount, you have to have a good relevant advert plus landing page.

    I would setup another campaign and go for longer tail keywords with a very low CPC. Go to google keyword tool, type in the main keyword then export those keywords (normally around 800) copy and paste to bing. Set bid amounts really low. If you dont see any impressions increase bid amount.

    I hope you have conversion tracking setup.
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  • Profile picture of the author dburk
    Hi mrripley,

    As you likely are already aware, just because your competitor is bidding $40 a click he isn't paying his maximum bid, he's only paying one penny more than the second highest bidder.

    So you could easily drive your competitors cost higher by raising your bid to the highest amount that does not exceed your top competitor's bid. This will force your competitor to pay very close to his maximum bid while you are paying only one penny more then the 3rd highest bidder.

    Of course this only works out like that if you also have 10/10 Quality scores. So make sure you have split tested ads and have great Quality scores before embarking on this type of strategy.

    Also, be wary of competitors that have 2 websites and are double serving ads. They could easily bracket your ads and drive your costs to nearly as high as the top bidder's Max bid.

    So research and make sure you know who owns and manages the campaigns of your top 3- competitors in the auctions you compete in, and make sure you have at least a couple rounds of ad text optimizations done through A/B Split testing, before you embark on such a strategy.

    HTH,

    Don Burk
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  • Profile picture of the author RuskinF
    Focus on On-page optimization. If your website is more user-friendly and neat.
    You can bid a little bit lower than your competitor. This will place their page-ad on top of yours' . If their site makes the new user leave it easily, it would set a threshold for new user. And once those same users visit your site, it would be easy for you to please them due to already low threshold w.r.t expectation and user-friendliness.
    I mean to say on-page optimization can help you do business in less costs.
    Let me know your thoughts.
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  • Profile picture of the author dave_hermansen
    Maybe I don't understand the question, but what SHOULD happen is that your competitor is going to maintain that first position no matter what you do, UNLESS you bid even more than them. You can drop your bid to $30 and the price they pay will be $30.01. You can drop it to $20 and the price they will pay will be $20.01.

    Personally, I'd figure out what the lowest bid is that would get me the #2 position and then split test headlines and ad copy to compel people to click on your listing instead of the competitor's.
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  • Profile picture of the author talfighel
    The longer you stay as an advertiser there, the better for you. They like seeing serious advertisers using their platform and if you keep at it, you will get better rankings.
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  • Profile picture of the author ChrisBa
    Originally Posted by mrripley View Post

    I am running a successful ad campaign on Microsoft Advertising (formerly Bing). My page ranking averages 2.5.

    I have a competitor in my business sector that has set very high first position bids. Most of them are over $40 per click. I do not have the budget to compete with these high bids and I know my service is better then the competitors. Is there a way to combat this/compete with this? I know who the competitor is and I know that they do not have the budget to sustain those high bids for a long time.

    Since my page rank is normally around the second position I had an idea. If I were to set my bids at $30, the competitor with a bid higher than $30 would have to pay that to stay higher ranked correct? I know that the competitor could not sustain $30 per click when there are hundreds of clicks a day.

    Is there a flaw in my thinking? Is there something I am missing? Does anyone have a recommendation or a plan to compete with a very high bidder? I look forward to hearing from someone.
    Without knowing the full details I'd just settle for second position if it's not to crazy or look for other keywords/targeting.


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  • Profile picture of the author martworld
    Try to add more keywords on your campaign. Add long tail keywords that your competitor is not bidding on. This way, you will gain 1st position
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  • There's just a small flaw in your logic.

    You may not know the basic CPC formula, published some years ago and admittedly may have changed, which is the ad rank of the competitor ranking below you (in this case, you) divided by their QS. To affect their CPC, you either need to increase your bid or improve your QS, either of which improves your ad rank. Plug in some numbers, play around and you'll see what happens depending on your bid and QS.

    Setting your bid at $30 would increase their CPC but it doesn't mean it would remove them from the first position.

    Another flaw in your logic is that if others are bidding that much, there's a reason for it. It's called market forces, supply and demand. It's not uncommon in the insurance industry for example to hear of $300 or even $500 cost of acquisition for a customer but it's worth it because the long-term value of that customer is so much more.

    But if you want to try to smoke out the top competitor, go ahead and bid higher. I'd go higher since you say they are bidding $40. It won't affect your CPC until you actually are on top yourself (he'll become your competitor and have a new competitor himself and pay less). I'd just do it if my QS was high to protect yourself against a big CPC increase when it happens. The problem is, you'll have to reduce it yourself (he may be playing the same game) eventually and you're right back where you started.
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