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Pay Per Click June 9th, 2009
Last week, I talked about Google introducing the Bid Simulator. While reviewing the presentation, I noticed something interesting, and it seemed to verify that ad impressions do increase with higher per click bid prices as well as moving ads up in the paid search results on SERPs.
Take a look at this graph supplied by Google in the Bid Simulator reference guide:
You might notice that this chart presents advertisers with "estimated clicks" based on an increase of the advertisers maximum cost per click, or the amount they are most willing to pay per click on their ads. But look two columns over; Advertisers are also presented with "estimated impressions" based on these bids.
With the increase in per click bid prices, we see the obvious increase, and that is the average position of the advertiser’s PPC ad. But we also see that ad impressions increase. Simply having an average position in the search results that should place you on the first page does not always guarantee your ad will appear in search results.
Thinking about this situation, it does make sense for both parties – the advertiser and Google. The higher your position, the more you will pay per click. Well, in most cases you will. Campaigns that are optimized well can attract clicks that cost less than clicks on ads below them. But this takes a lot of work to accomplish.
Advertisers who are willing to bid more per click would also benefit from higher positions, and are therefore be rewarded, in a way, for this willingness to pay more by being presented more often to people searching on Google.
It also shows that bidding higher when launching a campaign will contribute to an advertiser’s account history quickly and allows internet marketers to make judgements on account performance sooner rather than later. Making judgements on keywords with low click thru rates and average ad positions closer to 10 than 1 would not be as smart, in my opinion. Fewer impressions may mean a loss of clicks, which might mean a loss of sales.
One other note: I would hope that shady "internet marketers" would not use information like this to convince clients to increase their budgets simply to make more money off them. I would hope that they would use it with the client’s best interests at heart. How is the account performing overall? Do they have a great click thru rate, convert well, and have great keyword quality scores? Numerous factors should be taken in to account before approaching a client to increase their paid search advertising budgets.
As we do here at TechWyse, keep your search marketing process transparent and make sure the client knows how every cent is being spent.