Five Days to Success with Google AdWords
from Perry Marshall - Day 2
"How one 'Trivial' Change Can
Cut Your Bid Prices by 95 PERCENT!"
- Why Your Bid Price is NOT the Actual Price You Pay - and the Huge Difference That Creates for You
- What to Do When Your Keywords Get Labeled 'Inactive'
Today I'm going to talk about the thing that many newcomers find most confusing about Google - and I'm going to explain why it's a really ingenious twist that will actually help you.
The price you bid is almost never the price you actually pay. You almost always pay less.
First, it's a little bit like Ebay. You pay 1 cent above the position below you, not the maximum that you bid.
But there's an even more important secret that is the key to getting lower and lower prices, even while other bidders are jumping into the game:
Your Clickthrough Rate (CTR) is MORE important than how much you bid.
The Clickthrough Rate is the percentage of people searching who actually click. If 100 people search, your ad shows up 100 times, and one person clicks through, that's a 1% clickthrough rate.
So let's say I've got a 1% CTR and I'm paying $1.00 for position #2.
Let's say you've got a 2% CTR. If you play your cards right, you may only have to pay 51 cents to get position #2 and knock me down to position #3.
That means that you were 2 times as relevant, and you got to pay 1/2 as much!
The rules can be very simple, but the implications are huge.
When you achieve high click-thru rates, you can pull your bid prices down, down, down and yet stay at the same position on the page, while your traffic goes up.
The difference can be quite amazing. Here's an example of two ads - they are ALMOST IDENTICAL but one got nearly TWENTY TIMES the CTR as the other:
Popular Ethernet Terms 3 Page Guide - Free PDF Download | ||||
| 2 Clicks - CTR 0.1% |
| Popular Ethernet Terms |
| 39 Clicks - CTR 3.6% |
Notice what happened: All I did was reverse two lines - and the clickthrough rate jumped from 0.1% to 3.6%!
That means that the ad on the right gets more than TWENTY TIMES as much traffic - and I could pull down my bid prices and get that for the same amount of money as I was paying before. Just think how much money we'd be leaving on the table if we didn't discover this!
This is just one of dozens of tricks I've found that let you push your bid prices down, down, down while your traffic goes up. (Of course you get all the secrets in my toolkit.)
Beat your best, and you can get more and more traffic for less.
I just explained how Google ranks your ad higher as your CTR goes up. Overture does not do this. On Overture, the highest bidder always wins.
That rewards people who have more money than brains.
Which means that for the smart marketer, Google is vastly superior!
Before I go, there's one other thing I need to tell you: This is precisely the thing that gets people all tangled up over keywords that Google suddenly labels 'inactive.'
While Google may tell you simply to bid more, the major reason that keywords get made 'inactive' is this: The message in the ad doesn't match what the person wanted when they typed in the keyword!
How do you fix this problem? By organizing your keywords into narrow themes and by testing different ads that match people's searches - like I described above.
Then watch as people's clicks vote on the words that actually sell. This is an absolutely foolproof method of getting your ad placed higher on the page, and my Definitive Guide shows you dozens of variations on this method that you can use right away.
Next tip is called:
"A Google AdWords Lesson from the Wall Street Journal."
Talk to you then.
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