Saturday, August 27, 2005

Quality-Based Bidding: One Man's Poison...

CNET reports that AdWords advertisers are feeling the burn from the new "minimum bid" system, while AdSense customers are seeing higher revenues. This is in line with what I've been hearing over the last week and a half. One audience member at my BAR Camp talk said his AdSense revenue had tripled in the prior few days.

If you're adding new keywords to your AdWords campaign, I recommend starting out with a higher max CPC than you'd normally use. If you bid really low (as you might have been wont to do under the old system), and that bid proves to be well below what most others are bidding, your ad will display in a low position, resulting in poor CTR, resulting in the keyword's getting disabled, and as a result you'll be asked to pay a higher minimum CPC to reactivate it. That is, if your ad even gets a chance to show -- I've already heard tell of keywords that were just added getting disabled immediately, with Google setting min CPC to reactivate at way above the original max CPC the advertiser had chosen. On the other hand, if you bid too high to start with, you can always adjust downward later. Keep an eye on things. We're all going to have to baby our accounts for this first while.

You should also be thinking about what keywords you're really attached to: you might allow some keywords that are of lesser importance to you (i.e. not worth it to you to pay the minimum bid) to get deactivated, and reallocate that money to your core group of keywords. Figure out which keywords have been most successful for you, which are core to your branding, and conversely, which have been poor investments. Do you have keywords that are getting high CTRs but don't convert well after the user reaches your site? Consider getting rid of 'em. The Long Tail is sooo five minutes ago. Take a long, hard look at that keyword list and think about thinning the herd.