Do you ever wonder? if I increase my Max CPC bid from $2 to $3, how many more clicks can I expect to get?

Transcription

1 May 2009

2 Do you ever wonder? if I increase my Max CPC bid from $2 to $3, how many more clicks can I expect to get? what would be the new position of my ad if I bid $3 instead? how much would the clicks costs? how can I bid more effectively? Google Confidential and Proprietary 2

3 Bid Simulator: What are the advantages? Adds transparency into Google s auction process and enables informed bidding decisions Estimates the click, cost, impression, and average position data that your ads would have received in the last seven days had you set different keyword Max CPC bids. Enables you to compare the performance of different bids and select the one that works best for you. Simplifies bidding process Reduces the amount of time spent doing trial and error experimenting with various keyword Max CPC bids. Enables calculation of incremental cost per click (ICC) Enables you to take incremental cost per click into account by communicating click cost information at different bid levels. More on what ICC is and why it matters later. Google Confidential and Proprietary

4 Bid Simulator Can you use this? Are currently using You can not use bid simulator if you: Conversion optimizer Budget optimizer Position preference Ads scheduling (advanced or basic) Have campaigns that hit your budget Note: If you are an Enhanced CPC beta participant, you will see the bid simulator option but should not use it. If you use any of the above, bid simulator will not show up. Google Confidential and Proprietary 4

5 Bid Simulator How does it work? Your quality score Your competitors bids and their quality scores We know Amount of traffic search network received last week Probability of a click on your ad given its position Google s auction system Which position your ad would have shown at for any bid We estimate The number of clicks you would have gotten at those positions The cost of those clicks Note: This is a simulation of last week's data. Next week's results could be very different due to changes in search traffic or actions by other advertisers Google Confidential and Proprietary 5

6 Bid Simulator Keyword thresholds In order to get simulations, your keywords must meet adequate traffic thresholds Keyword (in the last seven days) Feature simulates Receives adequate traffic Click, cost, impression, and average position data Receives lower traffic Click and cost data Receives hardly any traffic.. or keyword was recently added No simulation data Google Confidential and Proprietary 6

7 Bid Simulator Accessing the tool (step 1) Accessible from the AdWords front-end. Sign into your account, and you are ready to begin Select as many keywords as you want to see simulations for and click on Edit Keyword Settings Google Confidential and Proprietary 7

8 Bid Simulator Accessing the tool (step 2) Click bid simulator under any keyword s search bid You cannot choose keywords in bulk but must click the bid simulator link individually for each keyword Google Confidential and Proprietary 8

9 Bid Simulator UI Scenario 1 Scenario 1: Your keyword receives adequate traffic: shows the estimates of clicks, cost, impressions and average position for several bids ; Approximate hypothetical bid range: Max (2 x current bid) Min (0.5 x current bid) Google Confidential and Proprietary 9

10 Bid Simulator UI Scenario 1 (close-up) Scenario 1: Your keyword receives adequate traffic: shows the estimates of clicks, cost, impressions and average position for several bids Date range of simulation Current bid Google Confidential and Proprietary 10

11 Bid Simulator UI Scenario 2 Scenario 2: Your keyword receives lower traffic: shows the estimates of impressions and average position Date range of simulation Current bid Google Confidential and Proprietary 11

12 Bid Simulator UI Scenario 3 There are no estimates for a keyword that does not meet any threshold. either because the keyword was recently added or the bid is too low to receive any impressions Google Confidential and Proprietary 12

13 Bid Simulator Practical example I m the marketing manager at PowderSki.com and need to bid more effectively in order to get promoted this year! What should I do? Well.... I recall seeing an AdWords blog that described a free feature that will give me the insight to make better bidding decisions. So, let's see what I can do here... Our most important keywords (i.e. the ones that spend the most) get more than 30 clicks a week, so I should be able to see bids vs. click cost data for them. Let's look at [skis]. At our current bid of $1.00 we got 69 clicks for $ What if I went up to a bid of $1.25. That would mean 119 clicks for $ Hmm is it worth it? We make a profit of $50 per conversion and our conversion rate is 10%. By increasing my bid to $1.25, I would be spending $35.90 more for 50 more clicks. I expect those 50 clicks to turn into 5 conversions (at our 10% conversion rate). And I expect those 5 conversions to bring in $250 (since our average profit per conversion is $50). Wow! Spending $35.90 to get $250 seems like a good deal. I should increase my bid to get those profitable clicks. Google Confidential and Proprietary 13

14 Bid Simulator Things to note When a new keyword is added or a campaign started, simulations are generated once there is enough click or impression data Bid simulator does not simulate conversions or predict future results Data gets refreshed once a day Simulations are for Google.com and search only Bid changes do not hinder our ability to simulate For broad match keywords, the # of impressions (and, therefore, clicks) can change dramatically with each bid. Even for a KW with avg position 1.1, increasing a bid could make a significant difference in volume Google Confidential and Proprietary 14

15 Bid Simulator Popular FAQs How is bid simulator different from Traffic Estimator? Bid simulator is not available on How does it work for a campaign opted into the search and content networks? Bid simulator and the Traffic Estimator use different data The Traffic Estimator looks primarily at overall traffic patterns Bid simulator's results are specific to your campaign and keywords Bid simulator is more accurate at predicting results for a particular advertiser AW3.0 AdWords Editor API.CSV downloads Bulk changes This is not available for content. If a campaign has both search and content, bid simulator will only show simulations for search How does this compare to 3 rd party bid management tools This is not meant to replace 3rd party services for bid or campaign management, as they provide many services beyond bid estimates This feature should help 3rd party bid management companies to be more effective in helping their customers Google Confidential and Proprietary 15

16 Bid Simulator Planned future features Additional features Simulation at ad group and campaign levels Compatibility with AdWords 3.0 API Editor Conversion Optimizer Ads scheduling Budget-constrained advertisers Google Confidential and Proprietary 16

17 Bidding Concept Incremental cost per click (ICC) Bid simulator enables you to calculate your incremental cost per click. It s important to understand this concept to utilize the feature fully ICC measures how much extra you need to pay for the extra clicks when moving from a lower bid to a higher bid Bid Clicks Cost CPC Change in cost Change in clicks ICC 3 31,200 $3,770 $0.12 $3,770 - $3,360 = $ ,700 $3,360 $0.11 $3,360 - $2,810 = $550 31,200-30,700 = ,700-28,000 = 2,700 $410 / 500 = $0.82 $550 / 2,700 = $ ,000 $2,810 $ Google Confidential and Proprietary 17

18 Bidding Concept How to use ICC Current bid Keyword 1 Bid Clicks Cost CPC Change in cost Change in clicks ICC 3 31,200 $3,770 $0.12 $3,770 - $3,360 = $ ,700 $3,360 $0.11 $3,360 - $2,810 = $550 31,200-30,700 = ,700-28,000 = 2,700 $410 / 500 = $0.82 $550 / 2,700 = $ ,000 $2,810 $0.10 Current bid Keyword 2 Bid Clicks Cost CPC Change in cost Change in clicks ICC C 21,545 $2,760 $0.13 $2,760 - $2,360 = $400 B 20,115 $2,360 $0.12 $2,360 - $1,810 = $550 21,545-20,115 = 1,430 20,115-18,000 = 2,115 $400 / 1,430 = $0.28 $550 / 2,115 = $0.26 A 18,000 $1,810 $0.10 Scenarios: Which bid should I raise? I have extra $600 approximately raise keyword 1's bid from 1 to 2 because the ICC is lower than from A to B I have additional extra $1,000 (beyond the extra $600) approximately raise keyword 2's bid from A to C. Don't raise keyword 1's bid because the ICC is higher Google Confidential and Proprietary 18

19 Contacts and Resources Contacts AdWords help Resources FAQs: Google Confidential and Proprietary 19