When it comes to paid advertising, deciding how much to bid on each keyword can be difficult. On one hand you need to consider how many clicks you can achieve within your budget but on the other you need to target quality clicks and conversions. Whether you use bid management software or adjust your bids manually it is something that you need to stay on top of due to seasonality and changes that are made by your competitors. The amount you are willing to pay per click can effect a number of things including click through rate and quality score, which can have an impact on how much you have to pay per click compared to a competitor. Here is a guide to why bidding in the top positions could be the best strategy.
It is easy to see the evidence of why bidding in the top positions is an effective strategy. If you have been bidding high you can split the ‘Top positions’ against ‘other positions’ within Google Adwords. Just click the ‘Segment’ drop down and select ‘Top Vs Other’.
Top Vs Other Statistics
Regularly we see ads performing much better when they appear in the top positions. Here is a real comparison looking at ‘Top Vs Other’ conversions in November
Even when the ads appeared less in the top positions they still generated more conversions.
Why Bidding Higher Works – Click Through Rate
The reason why bidding higher works is due to increasing the click through rate. Click through rate is calculated by dividing the number of impressions by the number of clicks. As an impression is counted every time your ad is shown irrespective of the position having an ad at the bottom of the page could lower the click through rate as the ad will show more often but due to being at the bottom of the page get less clicks.
If you bid in the top positions yours will be the first ad that the user sees and providing you have eye catching ad copy more likely to be clicked. Due to this the click through rate will always be higher, even if you show less the percentage of clicks will still be higher and this metric is used by Google to determine your quality score
Bid Higher Pay Less
When your quality score increases you will pay less for each click. Google would rather have 10 relevant clicks at £0.50 than 5 irrelevant poor quality clicks at £1.00 as they pride themselves on the quality of the Google Paid listings.
Take a look at your account and see which areas you can bid more on. Start with the keywords you expect to perform well and try bidding the ‘Estimate Top Bid’ and monitor the progress. Remember not only will you be in the positions that get the best click-through rate but the ad extensions will also show, taking up more space on the page!
Finding the Top Page Estimate
To find the top page estimate add the ‘column’ ‘Estimated Top Page Bid.’ Try not to limit your activity by bidding low, set your budgets and bid high, this way you will gain quality traffic and increase the budget gradually over time.