In pricing PPC keywords, competing for the top spot could be your biggest mistake. Capturing the #1 position is not always realistic, and it is a likely waste of your money. The waves of information we see for search marketing has clued us in to smart concepts that pay off when put into practice. We’ll show you exactly how to stretch your ad dollars without sacrificing exposure to your domain.

Often, search marketers spend hours carefully pouring over data in a concentrated effort to hit that trophy—the top ad position. There is value to that position, but that value usually means more to a deep-pocketed advertiser, fighting to close the gap against an aggressive competitor.

For most advertisers, shooting low is smart. Position 6 or 7 is the better answer. Not only does a lower bid still bring in respectable traffic, but it stretches your budget once clicks start adding up.

Devote your attention instead to building your click through rate (CTR) with relevant ads for the keyword. This carries more weight with Google and allows your ad to show up at a higher position than what your bid alone would have delivered.

By analyzing SpyFu data, we found that advertisers getting clicks in these middle positions are usually paying between 35-45% of the top domain’s bid. (You will want to determine the difference in your specific niche between the two, but 35% can be our working model.)

When you reset your bid prices to reflect this play on the top money-guzzlers, you have a more competitive strategy that keeps you in line with a mid to low range position.

Follow through to the end of the post to see how to get a better idea for the range of keywords that you use.*

Experienced Adwords managers are starting to cringe at where this is leading. The idea of calculating new pricing for dozens or even hundreds of terms might start to sound like a task that isn’t worth the pain.That could be, but there is an easy solution.

SpyFu has constructed a new interactive keyword viewer to manage strategies just like this. With a built-in export function created specifically for Adwords users, it takes the pain out of practices that savvy search marketers rely on most.

You can enter your pricing pattern as a multiplier of the max bid price.In one move, your entire ad group is individually priced and ready to start getting you results. For our example, your multiplier is ".35" for 35% of the max bid price. Don’t worry about one size fits all.S hould you spot few keywords where you’d like to rank higher, you can make individual updates. The built-in multiplier just helps you buy time when you are setting up your group.

As you start to get clicks and results, you can always measure your CTR to determine if you need to adjust your bids up to take advantage of more competitive keywords and ads. Starting low and raising your bid is a better position to be in than wringing your hands over lost dollars you’re trying to salvage.

Try it for yourself:

Enter your own domain into SpyFu to pull up your paid keyword list, or choose about 5-8 PPC keywords that represent the niche where you plan to advertise.

Choose a term where you ranked about 5, 6, or 7^th. In our example, candyfavorites.com ranked 5th for saltwater taffy.

Select the keyword to retrieve its stats, and find the cost per click in the top left corner.

Divide the top end of the range by the low end of the range. Here, the CPC ranges from .28 to .60. The low end is about 47% of the high end. Continue this pattern on selected terms until you come up with an average percentage of low range bid trends you would like to use.

Labels: Google Adwords, SEM, SpyFu

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