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Making More Money By Lowering Your PPC Ranking Bids
By: Developer Shed
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    Making More Money By Lowering Your PPC Ranking Bids

    By Ralph Tegtmeier

    Pay-per-click (PPC) search engines are gaining in importance dramatically: the Overture (formerly GoTo) paid search results are featured on most major search engines now (e.g. MSN, AOL, AltaVista, Lycos, etc.), while well visited meta search engines like Dogpile and Mamma have resorted to biasing their findings towards several competing PPC engines. In Europe, ESpotting has effectively cornered the market.

    Welcome though the traffic generated by paid rankings may be, it can also cost you a bundle. Let's take a fairly common search phrase like "search engine placement services". According to Overture's Search Term Suggestion Tool, this particular phrase generated
    exactly 7208 unique hits in December 2001. Let's also assume for simplicity's sake that approximately 40% of the searchers clicked on the #1 ranking, with 35 & clicking on the #2 rank and another 25% on the URL featured on #3.

    At time of writing these were the bids for positions
    #1 through 4:
    - Position #1 = $4.38 per click
    - Position #2 = $4.37 per click
    - Position #3 = $4.33 per click
    - Position #4 = $3.97 per click

    This would have generated the following advertising costs for #1-3 bidders (traffic figures rounded):

    Traffic total - 7208
    - Position #1 (40%) = 2883 x 4.38 = $12,627.54
    - Position #2 (35%) = 2522 x 4.37 = $11,021.14
    - Position #3 (25%) = 1802 x 4.33 = $ 7,802.66

    If we stay focused on positions #1-3, what's interesting here is:
    a) the difference per bid between pos. #2 and 3
    b) the difference per bid between pos. #3 and 4

    Analyzing these bid gaps is quite revealing. As we can see, web site #2 has overbid #3 by $0.04, where $0.01 would have sufficed. So they are actually paying $0.03 more per click than required to stay on position #2. At a traffic score of 2522 this seemingly minute
    difference of only $0.03 amounts to an overpayment of $75.66 per month for this single search phrase alone. (Obviously, this assumes a static bidding structure for
    the whole month - real life fluctuations may and probably will differ in either direction.)

    Even more dramatic is the overpayment by site #3 in relation to #4: at $0.36 per hit (again, $0.01 would have sufficed to hold their position) and at 1802 clicks December overpayment is a stiff $630.70! (Again: this is for only one keyword.)

    In a more structured overview:

    - by Position #2 in relation to #3 ($0.03) = $ 75.66
    - by Position #3 in relation to #4 ($0.35) = $ 630.70

    A second example for search term "florida real estate". Here, bids per click are lower, but December 2001 traffic was exponentially higher at a stately 40533.

    Bids at time of writing were:
    - Position #1 = $0.91 per click
    - Position #2 = $0.90 per click
    - Position #3 = $0.65 per click
    - Position #4 = $0.55 per click

    Traffic costs
    Traffic total - 40533
    - Position #1 (40%) = 16.213 x 0.91 = $14,753.83
    - Position #2 (35%) = 14.186 x 0.90 = $12,767.40
    - Position #3 (25%) = 10.133 x 0.65 = $ 6,586.45

    - by Position #2 in relation to #3 ($0.24) = $3,404.64
    - by Position #3 in relation to #4 ($0.09) = $ 929.97

    For overpayment read: this is money misspent that could have been saved or devoted elsewhere to boost the overall marketing effort!

    Seeing that many large sites are bidding for hundreds if not thousands of search phrases, it doesn't take an Einstein to figure that all this may aggregate to a serious waste of money! Of course, monitoring and modifying tons of ever changing bids manually can be a
    daunting chore, especially in view of PPC engines' typically cludgy bid management interfaces. Luckily, it's exactly this number crunching type of task where IT based
    automation is at its best.


    The unequivocal message is obvious: don't overpay your bids! Get a good bid management software (client based, onetime fee) or service (web based, monthly fee) to
    take care of your PPC money, especially one which will help you save bucks and breath by minimizing bid gaps on a regular basis!

    One client based solution we can strongly recommend is BidRight. This nifty Overture-approved Windows bid manager also covers other major PPC engines like
    FindWhat, Kanoodle and Espotting.

    BidRight's primary feature is its automated bidding ability. This not only keeps you on top of your competition, it saves you valuable time. You can let BidRight begin the bidding process for all your keyword listings either manually or automatically in predefined
    timed intervals for each individual keyword listing. This allows you to give priority to your most competitive keyword listings by having them update more frequently than your lesser priority keywords.

    TARGET RANK: BidRight allows you to set the target rank for each individual keyword listing. You want to always be #1? No problem. Simply combine a target rank of "1"
    with a given interval, and you will always stay on top.

    MAXIMUM BID: You can set a maximum bid for each individual keyword listing. BidRight will never raise your bid higher than your maximum bid regardless of the
    target rank chosen.

    MULTIPLE ACCOUNTS: Do you use multiple PPC accounts? Maybe you're managing several different accounts for other people? BidRight allows you to assign account
    parameters for each individual keyword listing.

    GAP SURFING: BidRight's "Gap Surfing" is a particularly cool feature. It gives you the most bang for your buck. The program finds the "smartest" position from a range of
    ranks that you predetermine.

    No monthly fees, no dependency on third party servers - full CSV functionality, automatic drop back rank when max bid has been reached. With PPC engines gaining in
    importance every day, this is the best solution money can buy.


    If you want to buy the program, make sure to enter this COUPON CODE for an exclusive 5% discount: f020122
    Check it out here:

    Ralph Tegtmeier is the co-founder and principal of GmbH (Belgium), , a company specializing in webmasters software development,
    industrial-strength cloaking and search engine positioning services.
    He has been a web marketer since 1994 and is editor-in-chief of fantomNews, a free newsletter focusing on search engine optimization, available at:
    You can contact him at

    (c) copyright 2002 by
    All rights reserved.

    DISCLAIMER: The content provided in this article is not warranted or guaranteed by Developer Shed, Inc. The content provided is intended for entertainment and/or educational purposes in order to introduce to the reader key ideas, concepts, and/or product reviews. As such it is incumbent upon the reader to employ real-world tactics for security and implementation of best practices. We are not liable for any negative consequences that may result from implementing any information covered in our articles or tutorials. If this is a hardware review, it is not recommended to open and/or modify your hardware.

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