Google has a complex set of rules governing cost of Adwords ads and where you appear in the results. They also have a new tool, designed to make bidding more scientific and less of a gamble.
Many advertisers have gone into penny-pinching mode during this recession. AdWords is still a good option for your site, but you have to bid smart! The new “first page bid” notation in AdWords for lower-position keywords suggests how high you should bid to stay on the first page of SERP’s- is it accurate, or a gambit to get higher bids out of advertisers?
How low can you bid on a keyword while maintaining a decent ad position? Finally, there’s a tool that might help. Google’s new bid simulator tool is designed to provide relevant information that indirectly answers the question for you.
The tool also provides extra data in graphical form to help you figure out how much extra it’s going to cost to make a significant jump in ad position.If it costs you $4.52 on average to stay in ad position 4, the estimator will show you lists of projected impressions at various price points above your current rate. If you see a significant increase in impressions at the rate of $7.20, it might be worth your while to bump up a notch to placement 3 or 2. .However, if a jump in clicks or impressions only appears around $15.00. it might not be worth the extra moolah.
The Google tool projections are based on the last 7 days’ worth of data for your chosen keyword. The projection is fairly accurate, though not guaranteed, and the pricing curve can be steep!
The bid simulator can save you a lot of time, letting you tweak over time to see how much money you need to be bidding. Just go up or down slightly; you can change your bid instantly while viewing the graph, making subtle or dramatic changes in your strategy in real time. Entering your own bid opens up the possibility of more gradual bid moves. With the bid simulator tool, you may be able to save time in testing, as you can more closely gauge the possible effect each change has.