Adwords hike in rates

Hi - has anyone an explanation for Google increasing the keyword bids from 30 cents to sometimes $5 and $10 a keyword?

For example, scoliosis is $10; bulging discs is $10, whereas bulging disc is 30 cents.

It seems the system has gone haywire.

These are too high to make business sense.


www.londoncctv.com

Socrates wrote:

Hi - has anyone an explanation for Google increasing the keyword bids
from 30
cents to sometimes $5 and $10 a keyword?

For example, scoliosis is $10; bulging discs is $10, whereas bulging
disc is 30
cents.

It seems the system has gone haywire.

These are too high to make business sense.

www.londoncctv.com

The system is fine. It's an auction, so there are players out there that
identified they want to bid higher on those keywords. This may be a
mistake, too, like, Google gave them a suggested CPC for #1 position
that's usually sky high, and they simply agreed without understanding the
way the system works. It is usually not a problem, and you'll never have
to pay this much unless there is another inexperienced advertiser out
there that does the same thing - agrees to the sky high #1 bid. In this
case you'll be bidding to the very top of the suggested level. This is
going to raise the suggested level even more, so if there is a third
reckless advertiser entering the arena... Well, you got the picture.

Don't forget that you don't know exactly what people do with all that
traffic. Maybe there *is* business sense for them to pay this much, you
never know. Analyze #1 and #2 sites, maybe you'll get some clues.

--
Cheers,
Dmitri
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Hi Dimitri -

You may be right about the inexperienced users who are setting too high a click value by simply relying on the Google Adwords "Discounter" (sic). That tool will ratchet up your costs much more than if you specify your own maximum CPC.

We obtained a refund from Google precisely because of this anomally.

However, this is not an explanation for why Google has suddenly ramped up the cost of keywords. The system will not activate a keyword unless the minimum bid is brought up to a set value. If these values represent the cost of advertising in the No 1 spot as set by the "Discounter" tool or by some inexperienced advertiser who doesn't know the difference between 30 cents and $10, this should not mean that the desired keywords for new advertisers cannot be made active until this No 1 value is met, otherwise no advertiser will be able to advertise unless they meet the current keyword cost for advertising in the No 1 spot!

Adwords is not an auction to match the cost of advertising in the No 1 banner position, otherwise any Google employee could be paid to log in and set an artificially high maximum cost per click.

On the other hand, perhaps that is in fact what Google is now doing to increase revenue.

www.londoncctv.com








"www.1-script.com" <info_at_1-script_dot_com (AT) foo (DOT) com> wrote

Socrates wrote:


Hi - has anyone an explanation for Google increasing the keyword bids
from 30
cents to sometimes $5 and $10 a keyword?

For example, scoliosis is $10; bulging discs is $10, whereas bulging
disc is 30
cents.

It seems the system has gone haywire.

These are too high to make business sense.


www.londoncctv.com

The system is fine. It's an auction, so there are players out there that
identified they want to bid higher on those keywords. This may be a
mistake, too, like, Google gave them a suggested CPC for #1 position
that's usually sky high, and they simply agreed without understanding the
way the system works. It is usually not a problem, and you'll never have
to pay this much unless there is another inexperienced advertiser out
there that does the same thing - agrees to the sky high #1 bid. In this
case you'll be bidding to the very top of the suggested level. This is
going to raise the suggested level even more, so if there is a third
reckless advertiser entering the arena... Well, you got the picture.

Don't forget that you don't know exactly what people do with all that
traffic. Maybe there *is* business sense for them to pay this much, you
never know. Analyze #1 and #2 sites, maybe you'll get some clues.

--
Cheers,
Dmitri
See Site Sig Below
-------------------------------------


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Socrates wrote:

Adwords is not an auction to match the cost of advertising in the No 1
banner position, otherwise any Google employee could be paid to log in and
set
an artificially high maximum cost per click.

I'm sorry, I think you don't fully understand the way the system works. It
*IS* an auction, and the famous "discounter" has to do with the fact that
your bid is only 1 cent higher than the runner-up. However, there is a
fixed starting price of 5 cents. It used to be the case that Google
arbitrarily set starting prices back in 2002-2003, but they let go on this
practice because it was not fair to say the least. They do let the system
manage itself, which it does in most cases except for notable glitches one
of which you may be involved in. So, I think the reason some keywords
are overpriced is because there are TWO (or more, but multiple, which is
important) bidders. Otherwise you’d stay at 6c per click all the time. If
you think the keyword is so obscure that nobody wants it, and it’s still
overpriced, think again. There are reported 280,000 advertisers in this
system. Someone almost definitely wants almost any word or phrase someone
has come up with.

On the other hand, perhaps that is in fact what Google is now doing to
increase revenue.

Like I said, they used to have arbitrarily high starting CPC, but they
don’t anymore.

There is a great book on the subject: Winning Results with Google AdWords
by Andrew Goodman. Very recent and the best I have read on the subject to
date. Definitely give it a try if AdWords is an important part of your
business.

Good luck!

--
Cheers,


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"www.1-script.com" <info_at_1-script_dot_com (AT) foo (DOT) com> wrote

I'm sorry, I think you don't fully understand the way the system works. It
*IS* an auction, and the famous "discounter" has to do with the fact that

your bid is only 1 cent higher than the runner-up.

I think you need to re-think your statement. You are being fooled by Google's own blurb which is quite deceptive.

Many advertisers have now understood after examining the exhorbitant charges on their statements that the discounter tool does not actually save you any money - it increases your costs exponentially - if both you and your "runner-up" have like sheep naively accepted the suggested default "recommended" maximum cost per click.

In that case all that happens if you are the second entry in the so-called 'auction' is that the tool will place you 1 cent higher than the next lowest advertiser. And who is the next lowest advertiser? Why it is none other than that fellow gullible sheep who has meekly accepted to rely on the discounter tool to set the maximum spend!

There is no actual auction. However, without the famous discounter tool there would be a free market in operation and it would be a genuine auction.

That is why it is only a matter of time before Google ends up on the thin edge of a class action suit.

www.londoncctv.com