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Manage Google AdWords - Helpful Ideas

Apr 20, 2008
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.

Relevance Equals A Google Reward

One way for your ads to get a higher position in the search pages is to bid more. A better way to position higher is to be rewarded by Google for your higher click-through-rate. Google will give you a higher position without charging you more per click. It is a reward 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

To explain more exactly, the formula takes your bid price and multiplies it by your Quality Score. Either way you do it besides your bid price your click through rate has the greatest impact on your position.

Which CTR, exactly? The CTR of your individual keywords as they perform on Google alone, not the total CTR of your ad groups, not the CTR of any of your ads, and not the CTR of your ads as they're performing on Google's search partner sites or AdSense.

If you have a high clickthrough rate, then you don't have to bid as much for the position. For example, I bid $1 and my ad gets a CTR of 1 percent. Your ad gets a CTR of 2 percent. You can get the same average position as me by bidding $0.50. If you bid $0.51 then you'll get the position above me. If you're already in top position, Google will automatically charge you a lower bid price as your CTR improves. Not bad.

Even though this may seem magical, it isn't. It does mean you are shelling out less money each month to Google and that means more money heading to your bank account.
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 adwords account management, he's the man!
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