AdWords: Setting Your Max Cost Per Click

We've received many emails from customers over the past several years asking how high we recommend setting AdWords' max cost per click. Generally, we recommend that our customers set the price somewhere moderately high, between the "base" rate and the max rate suggested by Google. For this entry though, I've decided to discuss a few options that may help you decide where to set your max cost per click to get a maximum return.

What kind of competition do you have?

Before you start, you'll need to do a little experimenting with the keyword tool and traffic estimator to see how high you'll need to bid. If the price to get your ad listed number one, in my opinion, it's a no-brainer. Bid what you need to bid to make sure that you have that number one spot. It will bring you the most visibility and generate the most clicks for your ad. Generally, the higher the ad, the better "quality" your clicks will be as well.

If the cost is relatively low, don't even think about it. Set your ads to be number one and then, if you're working with a limited budget, set your daily max spending limit to a number that is comfortable for you. It's generally better to have fewer clicks of "higher quality" than lots of clicks from "lower quality" traffic.

What if your keywords are highly competitive?

Some keywords in AdWords or in Overture (Yahoo Search Marketing) are incredibly expensive. Terms for gambling, web hosting, insurance, credit cards and many affiliate program related topics are very, very expensive. It's probably just not feasible for you to get the number one slot. If your budget is limited, you might get one to two clicks a day before the budget is gone. In these instances, you're going to need to pick a bid level that is comfortable for you and work on making your ads better. You aren't going to be able to get the top slot by bidding, so you'll need to increase your ad's click-through rate and make it more attractive to the viewers who do see it.

Experiment and decide

Ultimately, the decision is yours. I've found that it pays to have higher placed key words when possible. They seem to convert better than lower placed ads. You're going to have to experiment with your ads though to see what works best for you. Experiment for several days with different maximum click prices to see how your clicks and conversions rank. Only then can you make an educated decision for your website.

Chris Burgess is a Marketing Expert with BuyItSellIt.com Online Stores (http://www.buyitsellit.com). He has established and maintained successful pay per click campaigns for BuyItSellIt.com and many of its customers. To build an online store for your small business quickly and easily, sign up for your own free 30-day trial online store at BuyItSellIt.com.

PPC Advertising and Geo-Targeting is the Topic for November 12 Webcast at ... PR Web (press release) By limiting the geographic target, advertisers can increase efficiency, boost conversion rates and improve their overall ROI for PPC advertising. ...

Web Host AIT Offers Free Search Engine Ads Web Host Industry Review (WEB HOST INDUSTRY REVIEW) -- Web hosting provider AIT (www.ait.com) announced on Friday it is now offering free search ... and more »

Elephant Traffic Unveils First Transparent Web-Based Interface for Advertisers ... Reuters ... search traffic has been neglected till now but our research has shown that it delivers up to 50% higher conversions rates than standard PPC advertising. ... and more »

Google Expert To Reveal Page 1 Ranking Strategies in Exclusive Free Webinar Online PR News (press release) Online PR News – 06-November-2009 – The two fastest ways to dominate Google are using Search Engine Optimization (SEO) and Pay-per-Click (PPC) Advertising. ...

Turn clicks into patients Chiropractic Economics The opportunity to reach people who are actively looking for services online — through pay-per-click (PPC) advertising. If you've got a Web site, ... and more »

Search Engine Strategies Announces Dates For The 2010 London SES Conference & Expo Reuters London event for search engine marketing (SEM), pay-per-click (PPC) advertising and search engine optimization (SEO), to be held on February 16-18 at The ...

Alternatives to Google AdWords -- Worth Your Time? Search Engine Watch When you look for alternatives to Google AdWords (or even Bing or Yahoo PPC advertising), think about how people find the site you're going to advertise on. ... Google on the Move with PPC Managenent Test Betas: Keyword Search Pros to HelpPR-Inside.com (Pressemitteilung) all 13 news articles »

Enquisite Selects Aster Data to Scale Its Worldwide Search Data Network Earthtimes (press release) ... dramatically improve organic search performance to generate more online traffic, revenue and profits, at less cost than Pay-Per-Click (PPC) advertising. ... and more »

Pay-per-click Advertising: Seven Pointers for Smaller Campaigns Practical Ecommerce Managing small-budget pay-per-click campaigns (under $3000 per month) is typically more difficult than managing campaigns with higher spend levels. ...

AAA Captures Important AAA.NET Domain Name in Federal Court Ruling Reuters AAA's federal complaint alleged that Defendants were engaged in a willful and elaborate cybersquatting and PPC advertising scheme involving over 1300 domain ...