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Wednesday, August 03, 2005

One 'Trivial' Change Can Cut Your Bid Prices by 95 %!

Why the Bid Price is NOT the Price You Pay & the Huge Difference that Makes for You
What to do when your Keywords Get Disabled

Today I'm going to talk about the thing that many newcomers find most confusing about Google - and I'm going to explain why it's a really ingenious twist that will actually help you.
The price you bid is almost never the price you actually pay. You almost always pay less.
First, it's a little bit like Ebay: You pay 1 cent above the position below you, not the maximum that you bid.
But there's an even more important secret that is the key to getting lower and lower prices, even while other bidders are jumping into the game:
Your Click Thru Rate (CTR) is MORE important than how much you bid.
The Click Thru Rate is the percentage of people searching who click. If 100 people search, your ad shows up 100 times, and one person clicks through, that's a 1% click thru rate.
So let's say I've got a 1% CTR and I'm paying $1.00 for position #2.
Let's say you've got a 2% CTR --- you only have to pay 51 cents to get position #2 and knock me down to position #3.
That means if you're 2 times as relevant, you pay 1/2 as much!
The rules are simple, but the implications are huge.
When you achieve high click-thru rates, your bid prices go down, down, down and your traffic goes up.
The difference can be quite amazing. Here's an example of two ads - they are ALMOST IDENTICAL but one got nearly TWENTY TIMES the CTR as the other:

Popular Ethernet Terms
3 Page Guide - Free PDF Download
Complex Words - Simple Definitions
www.bb-elec.com
2 Clicks - CTR 0.1%

Popular Ethernet Terms
Complex Words - Simple Definitions
3 Page Guide - Free PDF Download
www.bb-elec.com
39 Clicks - CTR 3.6%

Notice what happened: All I did was reverse two lines - and the Click Thru Rate jumped from 0.1% to 3.6%!!!
That means that the ad on the right gets more than TWENTY TIMES as much traffic for the same amount of money. Just think how much money we'd be leaving on the table if we didn't discover this???
This is just one of dozens of tricks I've found that push your bid prices down, down, down while your traffic goes up. (Of course you get all the secrets in my toolkit.)
Beat your best and you'll get more and more traffic for less.
I just explained how Google ranks your ad higher as your CTR goes up. Overture does not do this. In Overture, the highest bidder always wins.
That rewards people who have more money than brains.
Which means that for the smart marketer, Google is vastly superior!
Before I go, there's one other thing I need to tell you: This is precisely the thing that gets people all tangled up over disabled keywords.
Keywords get disabled for one and only one reason: The message in the ad doesn't match what the person wanted when they typed in the keyword!
How do you fix this problem? By organizing your keywords into narrow themes and by testing different ads, like I described above, until peoples' clicks vote on the words that actually sell! This is an absolutely foolproof method, and my Definitive Guide shows you dozens of variations on this method that you can use right away.

Read the original article here.

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