Understanding Adwords Bidding Structure and Video Tutorial
September 23, 2009 by Pablo Palatnik
As many of you have seen, the Adwords interface has pretty much changed across the board for all. The new interface is up (has been for a while actually) and may be harder for some to manage the current structure (to get used to) and for beginners, it may be a little confusing.
I personally love the tool that allows you to see the amount of bid that will get you a certain number of clicks and/or impressions which of course those are all estimates as it has a lot to do with your ads, etc. You will see this like this when you click on the little arrow next to your bids:
The New Google Adwords Bid Simulator
From the newest post on the Adwords blog, Hal Varian explains, “In general, when you increase your maximum CPC bid for keywords on search you are able to generate more clicks to your site. This may be because your new bid qualifies you to appear higher up in the Sponsored Links on the search results page, or because your higher bid qualifies your ad to appear in new, more expensive, auctions. The goal for you as an advertiser is to decide whether or not these additional clicks come at a cost that is still profitable for you.
To make this decision, you need to compare your expected value per click to your incremental cost per click. Your value per click is how much a click for a particular keyword is worth to you, on average. Your incremental cost per click is how much extra you are paying, on average, for the extra clicks you are getting from your higher bid. When your value per click is higher than your incremental cost per click it makes sense to increase your bid. On the other hand, if your value per click is lower than your incremental cost per click, you probably want to decrease your bid.”
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Comments (4)
Hi there,
Not sure that this is true:), but thanks for a post.
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Thank you for this post. This is a very important video for anyone who bids on pay-per-click auctions to understand. If you find it to be interesting, then you might also like to read Optimal Bidding, Part 1: Behind the Scenes of ‘Google AdWords Bidding Tutorial’ for some of the important things Hal glossed over in his presentation.
Also, please see Behind the Scenes of ‘Google AdWords Bidding Tutorial’, Part 2 for a demonstration of how to determine your optimal bid using Hal’s approach which doesn’t resort to approximations.
Thank you again.
I didn’t know these tips for adwords so thx a lot for sharing.