Google AdWords Management – A Useful Tip
Folks are drawn to relevant ads. The way to be successful with Google AdWords is the have relevance. Folks will click on your relevant ads. You will be rewarded by Google because of it and your costs will drop and your Profits will increase. This is because of your relevance.
When you’re the person laying out the cash yourself and it’s your own business, your own risk, and your own credit card that Google is dinging every month, you don’t have time for your own ego stroking. Your customers don’t have the patience for it either. Nowhere is this more clear than in Google AdWords management. Putting your own money on the line has a funny way of wising us up to what gets clicks and what doesn’t.
Google Will Reward Your Relevance
If you bid higher for clicks you can get a higher position on the search pages. However, as your click-through-rate increases, Google will reward you by giving you a better position on the search pages. That is to say they reward you for relevance.
Basically, the number one position always goes to the top bidder. However Google has a long standing tricky little twist. This is the boiled down view of the formula:
Your Relative Position = Your Bid Price x Your Clickthrough Rate
The more precise explanation of the equation is: your bid price x you Quality Score. But whichever one you use, your click-through-rate makes the biggest impact, besides your bid price.
Next question: Which CTR are we talking about? We are not talking about, the total ad group CTR, nor the CTR of any of your ads either in the search partners or in adsense. We are talking about the Click-Through-Rate of the individual keywords, their performance on Google alone.
If you are getting a good CTR, you won’t be required to have as high a bid for a good position. It works like this; I bid one dollar and the ad gets a click through rate of one percent, and your ad gets a click through rate of two percent. You will be able to get about the same position as I do with only a bid of 50 cents. With a 51 cent bid you will get a higher position than I have. Say you already have top position, Google will charge you a lower bid price as your click through rate improves, without you having to do anything. Nice!
This isn’t magic, even though it looks like magic. It means you’re coughing up less money to Google every month, and you’re putting more in your own pocket every day.
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