I had a really detail e-mail from Iry the other day asking loads of questions about how to best maximise the adrank on his fledgling campaign. Here’s his question (s). I’m going to answer them within his text, there’s a fair few and answering afterwards would be too confusing!

Hi Kirsty,

1. We always say that we need bid high first to earn the quality score, it
doesn’t matter if we loss up front.

Now, I know a lot of people say this and I do tend to bid a little higher up front to boost the ad on initially. However, I rarely make a loss at this, merely a reduced profit. This kind of thing is personal in my opinion. Do what feels right for you. Perhaps practise this technique on a very small set of keywords and compare to another campaign where you haven’t bid as high?

a. Let say they are 7 – 9 advertisers for a keyword, do we need to bid until
the 1st place? Or we can bid about the 3rd-4th place?

You certainly don’t “have” to bid until you are in first place. Your position in the listings will depend on a combination of Adrank and what actually turns out to be affordable in order to make your campaign profitable. If merchants are in those top positions (or even worse, a PPC agency with a massive budget) it can be impossible to bid enough to get those positions affordably regardless of Adrank. Basically, your aim is to rank as highly as possible, as cheaply as possible, and still turn a good profit!

b. How many clicks that we are looking at before we reduce our bid?
i. E.g. $50/day budget per campaign
ii. Are the clicks referring to per campaign / per ad group / per keyword

How long is a bit of string? I can’t really quantify it. I usually adopt a bit of a “finger in the air attitude” to this (yes, scientific I know!) I monitor the CTR. This will usually gradually increase. Once I feel it has peaked I leave it running for another few days. You should monitor your adrank / CTR at the adgroup level. The rest will take care of itself! That said, as your entire Google Adwords account gets older it will acquire an adrank all of its own. This will assist your performance as time goes on.

c. When we reduce our bid, do we reduce the bid dramatically or gently? Do you
reduce the bid manually (means per keyword)?
I tend to reduce my bids gently on a daily basis if I think competition is strong. This lets me guage the point at which I can’t reduce further without affecting performance. You can also reduce dramatically, but there may be some Yo-Yoing as you try to find the right bid level to run a campaign effectively.

d. Another question is, what are the CTR that we are looking at to obtain a
good quality score? I know we should strike for the best but is 2 – 3% rate
acceptable?
2 - 3% is a reasonable CTR IMHO. However, do not get hung up on CTR as a measure of success. If you have an adgroup you’ve optimised the hell out of with a low CTR that makes you money, it’s a success. Money in the bank is the name of the game after all, and the odd adgroup with low CTR will not relegate your account to Google Adwords purgatory!

e. If the commission of a product is about $15, should we bid until $1.0 to get
the high position? ( assuming the conversion rate is 1%)
Not unless you have very deep pockets and enjoy losing a lot of money! Perhaps a better way to do it (particularly for a beginner) would be to work out how much you need to pay for a click to give your desired profit based on your estimated commissions and converstion rates. Say for example you paid $0.10 per click. This would mean that you would pay $10.00 for one conversion leaving you with $5 profit. Bidding $1.00 a click for this product would undoubtedly leave you in top position, but the kind of loss you might incurr with this strategy might take an excessive amount of time to recoup.

As a beginner, perhaps it would be better to follow a strategy not including any planned losses till you really, really have a feel for how Adwords will behave with your bid amounts?

2. Let say if there is a scenario when I look at the data

I would like to know does the Average Position actually include the previous
data before 1:00 a.m. as well.. If it does include, does it means that the
current position of my Ads are probably at 6 – 8 position because the
system has factor in the average position when my Ads were in 2.3?

You’d be best to manually check the search results to see where your ads are really sitting! Quite often an average position report isn’t entirely accurate. Sometimes it can be skewed by terms you may be showing for on broad match etc. A visual check would be best.

Kirsty .. Sorry, I know that’s lots of questions and I really hope that you
can help me on some of these questions which have been bugging me quite a
while.

I actually really like your life style and I hope one day I can travel like you
as well!

Good luck Iry, it’s a great old life… but it needs a lot of hard work to achieve. Seems from your detailed question you’re certainly working hard at it, so I’ll see you in the Caribbean for cocktails in a couple of years!