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Minimum bids are tricky. Understanding what you should focus on, and the odds of it actually helping is a matter of debate.

I have a chart that lists the odds of being able to increase your minimum bid, and the most likely candidate to use as a benchmark for improving minimum bids.

First it should be said, this is my opinion. This is not approved, reviewed, or official advice from Google.

Before we dive into any numbers, it’s important to remember what determines the minimum bid for AdWords.

Factors that affect minimum bids are:

  • Click through rate on Google.com
    • Overall history
    • Most recent history
  • Ad copy
  • Landing page
  • Account quality score
  • Other relevancy factors (very low weight)

Let’s examine each factor not as it applies to setting the minimum bid, but more how it applies to an action plan for lowering your minimum bid.

Click through rate on Google.com

First, this is normalized by position. Therefore, its expected that position 5 will have a lower CTR than position 1. (article and link about predicted CTRs coming soon)

Secondly, this is only Google.com CTR. Ignore search partners and the content network.

If you are in the ‘premium area (which was blue, and is now yellow)’ – your CTR is good, and this is not an area to focus on.

If you think your CTR is low, then you’re going to want to raise it. This starts with Ad Group organization, which is discussed next.

Ad Copy Relevancy

Your ad copy should describe every keyword in your ad group. Every keyword in your ad group should be closely related.

Therefore, if your keywords are closely related, and the ad copy describes each keyword, these two items have an effect on each other.

This means that ad group organization is a very key factor in determining relevancy.

How closely does your ad copy reflect your keywords? Ad Group organization is key to starting this process. Your ad copy should describe each keyword in the ad group. Each search has a different user intent, therefore, your ad copy needs to take a user’s intent for that keyword as it relates to your website in mind.

Does your ad contain the keyword? Of course, each ad can not contain every single keyword. Google understands themes, stemming, and latent semantic indexing. If your ad does not contain the keyword (the closest match), does the ad copy contain the overall theme of the keyword? (Again, please read the ad group organization article as themes can be quite granular).

Note: the use of dynamic insertion does not mean your ad copy contains the keyword.

Quick Tip: If you split test ads, you can run an ad copy report that lists the CPC by individual ad. This may give you insight into how the ads are affecting your quality score.

Source: AdWords Quality Score Factors

If you go through the exercise of reorganizing your Ad Groups (I’d recommend using the AdWords Editor), and then examining your ad copy, the issues should start to become obvious.

Remember, the searcher inputted a keyword to find information about that keyword. Triggering mortgage ads from real estate keywords is NOT going to be considered relevant.

Landing Page Relevancy

In the majority of cases where the minimum bid is over $1, it is landing page related. If you’re gone through the ad group organization exercise and have a well organized account with good ads, then the odds that the landing page is the culprit in high minimum bids comes close to approaching 100%.

It’s easiest to think about landing page relevancy in regards to the search process. A user has a question to be answered, that’s why a search was done in the first place. A relevant ad shows on the search result page that attracts the users attention and holds the promise of an answer. So, the user clicks on the ad and sees your landing page.

Does your landing page take these factors into consideration?

  • Does your page collect personal information?
    • If so, does it have an SSL certificate and a privacy policy?
  • Do you have an ‘about us’ page?
  • Do you have a ‘contact us’ page?
  • Do you have relevant information to the search query?
  • Do you have unique information?
  • Do you have related content to the search query?
  • Is the page flash?
  • Can the page be spidered?

Related: Landing page case study.

Once the user has a seamless experience from keyword to ad copy to landing page, then you should start to see much lower minimum bids.

But what about brand new keywords?

Account Quality Score

Account quality score is used for very little. One of it’s main purposes is to suggest a minimum bid when Google has very little history for that keyword. This is very important if you deal with new products, medical terms, and jargon for which there is little past search history.

Google can’t predict CTR if it doesn’t have enough data. Therefore, Google relies on your account quality score as a ‘forgiveness or trust’ factor in how much they let you play with keywords that they might not understand are keywords or how they will behave.

If you have high minimum bids on new keywords, and those keywords don’t have a lot of search volume, then your account quality score is where you should focus your energy.

Other Relevancy Factors

This is a very ambiguous part of the quality score formula. When a search is done, there are many factors such as ip vs national targeting, local vs national query, commercial vs non-commercial intent, past search CTR for that keyword, past search CTR for a logged in user, and the list goes on and on.

Since minimum bid is calculated as a standard, and isn’t adjusted per keyword search, the other relevancy factors are incredibly low, and aren’t worth your time examining in regards to minimum bids.

Where is this chart?

Now that the chart has been somewhat qualified, it’s almost time to reveal it.

The odds able to lower should help you manage your time more appropriately.

The ‘most likely major problem’ is classified as major because it could be that you have both ad group organization and landing page issues.

Minimum Bid Odds able to lower Most Likely
Major Problem
    AdGroup Organization Landing Page
$0.01 – $0.05 Approaching 0%    
$0.05 – $0.10 If perfectionist, less than 25%.
If not perfectionist, less than 10%.
90% 10%
$0.10 – $0.25 25-50% 75% 25%
$0.25 – $0.50 50% – 75% 50% 50%
$0.50 – $1.00 75% – 100% 25% 75%
$1.00 + 100% 1% 99%

I’m also a little lazy. It’s much easier to play with ad group organization and re-writing ads than it is to redesign landing pages. Hence, I always suggest with at least an audit or your themes and how they are broken down into ad group keywords and ad copy before touching the landing page.

Hope this helps direct your energy in the proper places for lowering your minimum bid.

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