Everything You Need to Know about AdWords Preferred Cost Bidding

May 4, 2007

Preferred Cost Bidding allows you to set your bid prices to your average CPC and not your max CPC

You can enable this for both CPC and CPM (site-targeted) campaigns.

This is very useful in three different scenarios:

1. You know your value per keyword. If you have the data that says keyword 1 is worth $4.23, and keyword 2 is worth $3.56, then instead of ‘guessing’ what the max CPC should be, you can set your preferred cost at those actual prices.

2. You want more control over expenditures. When setting max CPC, your click cost can vary widely from day-to-day. With preferred bidding, you have much more control over how much you actually pay for keyword. This makes it so your average spend per keyword should be much more consistent.

3. You don’t want to spend all day reconfiguring bids. Since preferred bidding changes your max CPC behind the scenes to reach your actual bid price, there’s a lot less work in adjusting bids with preferred cost bidding.

How does it actually work?

With preferred cost bidding, you can set your preferred click cost at the keyword or ad group level. Behind the scenes, Google then adjusts what your max CPC should be so that your actual click cost comes out to be in your preferred cost bidding range. (More on quality score and ad rank)

So, the same ad rank formula (ad rank = quality score X max CPC) still applies, just Google is doing an addition algo behind the scenes to determine your max CPC.

Incompatibilities

Since Google needs control over your max CPC in preferred cost bidding, it’s not compatible with a couple of AdWords features:

Ad Scheduling advanced features. Preferred cost bidding works with the normal ad scheduling (which is essentially day parting or showing your ads at specific times of the day and days of the week). However, the advanced version of ad scheduling allows you to automatically change your max CPC at various times by a percentage. This advanced feature is not compatible with preferred cost bidding.

Position Preference. This feature allows you to control which range of positions you wish your ad to show. Since Google is changing the max CPC behind the scenes in position preference to determine your ad rank, this is incompatible with preferred cost bidding which is also trying to change your max CPC.

Will you overpay?

The first negative reactions I heard about this feature is that since you are setting a preferred cost, in times when you could pay less for the top positions, you could easily end up overpaying for ads (i.e. if your bid was $3, and it required you to pay $1 to be in the number one spot, the rumor was Google would charge you $3).

This isn’t true.

Google is still running the ad rank formula for all companies involved in the auction for a single keyword, and the ad discounter still applies as well. Essentially, the ad discounter calculates the values for all companies in the auction process and reduces your actual CPC to the lowest possible CPC you could pay to be in that ad position.

Enabling Preferred Cost Bidding

Preferred cost bidding is another bidding option. In the campaign settings, you’ll first want to ‘view and edit options’ under bidding.

Next, choose from one of the three bidding options:

Set max limits - default bidding
Set preferred bids - preferred cost bidding
Budget optimizer - maximize traffic

Finally, choose how to change your current max CPCs to your preferred cost bids.

Preferred Cost Bidding can be very useful for controlling your ad spend, or for those who really understand the best bid by keyword or ad group.

I’ve been playing with it in a few accounts (it’s still in beta), and have been quite happy with the results so far.

It won’t be for everyone (the advanced ad scheduling being the one incompatibility I hope they fix), however, if you want more control over what you pay per click instead of what you bid per click, then it’s worth taking preferred cost bidding for a spin.

Written by Brad Geddes aka eWhisper · Filed Under Blog, Creating PPC Accounts, Google AdWords | 8 Comments

Ad Copy that Increases Conversion or Click Through Rate

April 17, 2007

Words that increase CTR:

Action words

Find
Search

Solving words

Cure
Help

Words that increase conversion rate:

Call to action

Learn more
Subscribe today

Words that do both:

Credibility words:

Guaranteed
Authorized reseller

What do you want from your 95 character ads?

Written by Brad Geddes aka eWhisper · Filed Under Blog, Creating PPC Accounts | 3 Comments

Use Day Parting to Increase Your Business

August 14, 2006

Show your ad when people are more likely to buy (eCommerce)
Show your ad when your office is actually open (for small businesses)

Generate new businesses only when you want more business

Stop wasting your internet marketing dollars by showing your ad 24/7. Is your businesses open 24/7? If yes, then by all means show your ad 24/7. However, are there times of the day or week when businesses is slower than normal? Are you a business with regular 9-6 hours, but late Thursday night and Friday afternoon the phone just stops ringing? There is a solution…

Time sensitive offers.

Written by Brad Geddes aka eWhisper · Filed Under Blog, Creating PPC Accounts, Local Advertising News | 3 Comments

Drilling Down into Geographic Keywords

August 2, 2006

When trying to reach a geographic audience, one must understand all of the geographic variations that searchers use to surf the web. Understanding these permutations will help target your online efforts at the appropriate geographic level.

If you play in the PPC (pay per click) arena, these are the types of keywords that will help you take advantage of the â€˜long tailâ€™ and drill down into very specific geographic queries. First, lets take a look at the geographic keywords, and then weâ€™ll examine the implementation techniques.

Written by Brad Geddes aka eWhisper · Filed Under Blog, Creating PPC Accounts, Local Advertising News | 2 Comments

Keyword Research Tools

September 21, 2005

Knowing where todo keyword research is as imporntant as knowing
how to do keyword research.

Just Keywords:

AdWords Sandbox
Overture Suggestion Tool
7Search Tool - (like overture for 7search)
iotaweb
Miva Tool(like Overture for Miva)

Multiple purposes or engines:

Webmaster Toolkit
Nichebot

Overture/Wordtracker Info:

Pixelfast - framed overture suggestion & bids
Digital Point overture/wordtracker comparison

Similar:

Keyword Map - similar & kw maps
Lycos - has a ‘narrow results’ - related keywords
Ask- has a ‘narrow results’ - related keywords
Alta Vista - has a ‘narrow results’ - related keywords
Thesaurus - one of my favorites still

Competition Watcher:

Google Spy

Written by Brad Geddes aka eWhisper · Filed Under Creating PPC Accounts, PPC Info | 1 Comment

PPC Title & Description Writing

September 2, 2005

Writing PPC Titles - What’s the Ad’s Purpose?

PPC Descriptions - What’s the Ad’s Purpose?

PPC Description Length:

Written by Brad Geddes aka eWhisper · Filed Under Blog, Creating PPC Accounts | 2 Comments

Pay Per Click Bidding - Relative Links

May 1, 2005

Relative bidding is used when you want your listing either above or below another specific listing.
Read more

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Value of a Lifetime Customer

July 9, 2004

The goal of many websites is not to make just one sale to an individual, but to make several over the course of each year.
Read more

Written by · Filed Under Blog, Creating PPC Accounts, PPC Info | 1 Comment

PPC Writing: Creating Keyword Landing Pages

June 30, 2004

The most important page on your site is the one a visitor is currently viewing. No other pages matter at that moment.

When someone has done a search at a pay per click search engine, they inputted several keywords, and that is what they are looking for. Never take someone directly to the front page of your site, unless it’s a very broad keyword which they are searching for, even then, use only with caution.

You want the visitor to see exactly what they are searching for as this will keep them on your site, and make it easier for them to go from a search engine to your shopping cart - the fewer steps the better.

Effective landing pages:

Show the user the product or information based on the keyword search preformed.
Product information - many users are looking for information before they buy, educate them and they will remember you.
One step process to conversion. If its a shipping site, one click to add product to a shopping cart. Highly useful, one click to buy product.
A listing of highly related or complementary products on that page.
Price

Effective landing pages should be one click away from:

Contact information, shows legitimacy of company.
Shopping cart review and checkout.
Shipping information.
Related products.

Many sites already have similar pages built into them, which is useful for people visiting their website through other sources, or wandering around a site reviewing products.

If you do not have structured pay per click landing page on your website, the invested time to make a landing page specific to a keyword can be a valuable investment.

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Crafting an AdWords Account

June 24, 2004

This overview is meant for those who have some basic understanding of Google AdWords or pay per clicks in general.

If you are still learning the basics, please read Creating your own pay per click account). Of course, you are free to continue reading. This is meant as a primer guide of how to run an AdWords account, as there is no substitute for experience and expertise.
Read more

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