When your ad is relevant searchers gravitate to you. The secret to successful AdWords is relevance. Searchers will click on your ad when you have relevance. When you have relevance, your profits will grow because your ad costs dropped, because Google definitely rewards relevance.
Arrogance falls by the wayside when you are shelling out the money, taking risks with your business and Google is dipping into your credit limit every month. Searchers don't want to deal with your arrogance either. This story is revealed best in the management of Google AdWords. When it is your card being charged, the information telling you what does or does not get clicks, is in urgent demand.
Google Rewards You For Relevance
If you bid higher for clicks you can get a higher position on the search pages. However, as your click-through-rate increases, Google will reward you by giving you a better position on the search pages. That is to say they reward you for relevance.
Basically, the number one position always goes to the top bidder. However Google has a long standing tricky little twist. This is the boiled down view of the formula:
Your Relative Position = Your Bid Price x Your Clickthrough Rate
The more precise explanation of the equation is: your bid price x you Quality Score. But whichever one you use, your click-through-rate makes the biggest impact, besides your bid price.
Next question: Which CTR are we talking about? We are not talking about, the total ad group CTR, nor the CTR of any of your ads either in the search partners or in adsense. We are talking about the Click-Through-Rate of the individual keywords, their performance on Google alone.
With your good click through rate, you don't have to bid as much for a good position. IE: If I put a bid of 1 dollar and I am getting a 1 percent click-through-rate and your ad get 2 percent click-through-rate, then you will be able to get the same position as I have for a mere fifty cent bid, and if you bid only one cent more than that 50 cents you would get a better position. To top that, if you already own the top position, as your click-through-rate increases Google automatically lowers your bid price. Way to go!
This isn't magic, even though it looks like magic. It means you're coughing up less money to Google every month, and you're putting more in your own pocket every day.
About the Author:
Need to optimize or "fix" your Adwords & PPC campaigns? Kirt Christensen manages over $600k in PPC spending & knows what it takes to make your account hum! When it comes to google adwords consultant, he's the man!
