About a week ago Google made a post called How auctions set ad prices which I thought was very important for you to take a look at. I would have posted a little sooner, but I was slammed with work last week. Let's take a look step by step and I'll give you my personal tips along the way. I figured what's a little online marketing secrets revealed between friends.
1) Each advertiser enters a list of keywords, ads, and bids. OK, here's where a little art and a little science starts and helps later on when they get to quality score.
- First you need to come up with your strategy for how you'll organize your words. Don't just stick them in a single ad group -create multiple groups and organize your words. This is probably the most important tactic for you. ORGANIZE YOUR KEYWORDS INTO GOOD GROUPS
- Second, you need to figure out what your daily spend is based on your goals
- Third, use Google's keyword tool as well as other ones to come up with your base of keywords by ad group. Make sure you use another keyword tool otherwise the words will look like your competitor's words
- Build your text ads by ad group. Make sure if it warrants, to use the keyword insertion tool
- Start your basic maximum bid at the ad group level to what you can afford. When Google determines your Quality Score you'll know what to do next
2) Google matches search queeries with keywords - Don't forget long tail words (think three or more keywords); these will probably convert better for you but at much lower volumes and hopefully cost.
3) The list of ads are ordered by bids and Quality Score. This is where things get a little tougher and separates the search children from the search adults. Google lists 6 ways it makes up Quality Score so let's examine them but quickly
- Historical click rates on Google's network (which you may or may not have anything to do with). This will be one of the reasons why you need to pay the mythical $5 CPC bid for an extremely relevant campaign.
- Other relevancies factors again that contribute to a higher CPC which probably upsets you
- Relevancy of keywords in your ad group (see step #1)
- You account's CTR history (that is your quality score changes over time)
- Historical CTR of the display URL in your ad group (see step #1)
- The quality of your landing page. Make sure your pages are relevant by your ad group
4) Google ranks the ads
5) Once a user clicks on an ad the advertiser is charged the minimum CPC over the advertiser right below it based on bid and quality score. You can try and optimize these bids by hand or get a bid manager to automatically adjust your bids multiple times per day based on your goals.
6) There are actually two auctions Google runs. One for the shaded bar on the top left of the page and one for the links on the right hand margin. To get listed on the top you must have a high quality score for a particular keyword; the top shaded area will cost you more than your normal #1 place. According to a blog post back in August 2007 your maximum cost per click will be considered to get you in the shaded region. So what does this mean to you? You will pay close to your maximum bid and when I personally tracked my best keywords over time I did see a significant increase in actual CPC for my #1 placements. Basically you must know for sure whether you want that #1 for a certain word; you might be better off with a lower placement at a much lower cost.
That's it. Enjoy your search tips...