If you’re familiar with google Adwords, no doubt you’ve seen the position preference options…
In the above example, you can see that a bid of $2.00 has been made but with a position preference of between 2-8. But why would you want to bid for a position other than first, I hear you ask.
Well consider this, I recently took over an adwords campaign for a client whose previous PPC manager had used a strategy of bidding of the highest possible position for the amount bid. This is great if you have an unlimited budget and are attempting market saturation, but in the case of my client, the budget was set at $50/day. Therefore, we want to get the most amount of clicks for our dollar – not just the most amount of clicks available. So here’s what happened…
I used the same list of keywords and identical ads, with one exception – I used dynamic keyword replacement in the Ad title but I’ll cover that subject in another post. The effect of dynamic keyword replacement would take a while to filter through so the only real change I made initially, was position preference bidding.
I set the top bracket at position 2 because it is my firm belief that the extra amount you pay to become number 1 is not worth the few extra clicks that it results in. In other words, you have to bid a lot more to gain very little. Now depending on a few factors such as the competitiveness of the keyword, the relevancy of your ad, your CTR (click through rate), etc; I’ve found that positions 2 or 3 are the optimal top position for most keywords – but there’s no hard and fast rule, it’s really a game of trial and error but certainly (unless you have an unlimited budget) I would advise against an unbridled 1st position bid.
The second thing to consider when bidding for position is the bottom bracket. In the example above, I have specified 8th position and, again, depending on a range of factors, you may want to experiment with this also. It’s important that you appear on the first page of results. In my experience, your chance of picking up clicks from the second page is very slim so unless it’s a really pricey keyword that is not a priority for your business, you want to appear on the first page.
By employing this technique, I was able to get my client’s average CPC (cost per click) down from $1.89 per click down to $1.25 in the first week – with a bit of tweaking of keywords and the insertion of dynamic keywords, I have been able to get the average CPC down to as little as $0.94.
The client’s budget was $50/day or $1500/month. Based on the number of clicks we attracted, in the first month alone, I managed to save him $480.32 – that’s a 30% reduction in his costs (he’s very happy).
If you’d like to know more about how to reduce your PPC costs or how I can help your business manage an online PPC strategy, please feel free to drop me a line.
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