The Pros And Cons Of "Bid Gaps"

Written by Stan Hauser


Introduction:

When doing Pay Per Click Advertising you'll often see "Bid Gaps" emerge amongrepparttar cost per clicks ofrepparttar 138148 keywords you're bidding on. For example,repparttar 138149 top three positions forrepparttar 138150 keyword "Mortgage" may be listed as:

Position # 1 $1.00 Position # 2 $.79 Position # 3 $.78 In this examplerepparttar 138151 advertiser inrepparttar 138152 #1 position is overpaying for their traffic. They could lower their bid to $.80 and still maintain their #1 position, while saving $.20 on each click.

Why Bid Gaps Appear:

Often times advertisers inrepparttar 138153 top position want to put distance between themselves and their competition to avoid having to check each day to see if they're still inrepparttar 138154 #1 position. Sometimes when companies upload keywords into their Pay Per Click Advertising program they set all their bids torepparttar 138155 same amount, regardless of where their competitors have set their bids.

The most common reason why some PPC advertisers create "Bid Gaps" and overpay for their clicks is they're not aware ofrepparttar 138156 tools available from third party vendors, orrepparttar 138157 PPC Search Engines themselves to avoid these gaps.

Eliminating "Bid Gaps":

Some Search Engines like Google automatically eliminate "Bid Gaps" by ranking ads using a combination of click through rate, andrepparttar 138158 maximum bid established byrepparttar 138159 advertiser. Google claims this allows them to offer advertisersrepparttar 138160 best ranking onrepparttar 138161 page atrepparttar 138162 lowest cost, while guaranteeingrepparttar 138163 ads they display are relevant torepparttar 138164 keywords users are searching on. Google's system involves some trust onrepparttar 138165 part ofrepparttar 138166 advertiser, since it's impossible to tell what you're competitors are bidding. If your competitor has done a good job optimizing their ad copy to achieve a high click through rate, their ad could appear above yours, even if you're paying a higher cost per click.

Other Pay Per Click Search Engines like FindWhat.Com offer an optional 'AutoBid" feature. This feature allows you to specifyrepparttar 138167 maximum you would be willing to pay per click for each keyword, andrepparttar 138168 system will automatically adjust your bid to $.01 more thanrepparttar 138169 next highest bidder. If your competitor raises their bidrepparttar 138170 system will continue adjusting your bid until it reaches you maximum bid.

Example:

Current bid forrepparttar 138171 #1 position: $.50 Maximum bid that you specify usingrepparttar 138172 "AutoBid" feature: $1.00 The amountrepparttar 138173 system will set your bid: $.51 It's important to note thatrepparttar 138174 cost per click may never reach your maximum bid. We highly recommend using automated bidding features whenever possible. These tools allow you to maintain premium positioning for your ads atrepparttar 138175 lowest possible costs while saving you time from having to check where your ad is ranked every day, and manually adjusting your bids.

The Cost Of Click Fraud

Written by Stan Hauser


The Cost Of Click Fraud

One ofrepparttar biggest threats torepparttar 138147 continued growth of Search Advertising isrepparttar 138148 increasing plague of click fraud. Although there are varying forms of click fraud, most people define it as any click generated, and paid for, whererepparttar 138149 intent is to drainrepparttar 138150 advertiserís budget. Advertisers know some clicks are more qualified than others, and not every visitor from their PPC campaigns will convert to a customer. But, they have a right to expect thatrepparttar 138151 traffic they are paying for is coming from people at least marginally interested in their products or services.

What Motivates Click Fraud?

Why does click fraud exist? What motivates people to deceiverepparttar 138152 system by sending PPC advertisers bogus traffic? The short answer (as usual) is money.

Many Pay Per Click Advertising networks are partially, (or in some cases totally), dependent on affiliate sites to generate traffic for their advertisers. These networks syndicate their customerís ads so they will appear onrepparttar 138153 sites of their affiliates. Every time someone clicks on an adrepparttar 138154 PPC Network andrepparttar 138155 affiliate site sharerepparttar 138156 revenue. The more clicksrepparttar 138157 affiliate site generates,repparttar 138158 more money it makes. Whilerepparttar 138159 vast majority of affiliates are legitimate trustworthy sites, others are inrepparttar 138160 business of exploiting loopholes inrepparttar 138161 system to line their pockets with real money by generating fake clicks. Often timesrepparttar 138162 weapon of choice used by these rogue sites to cheatrepparttar 138163 system is a software script that automatically clicks on PPC ads.

Another variation of click fraud uses a more personal touch to steal advertiserís money. Inrepparttar 138164 hyper-competitive world of Pay Per Click Advertisingrepparttar 138165 battle for premium positioning at an affordable cost can cause companies to use less than ethical techniques to gain an edge. Companies can drive up their competitorís marketing costs by clicking on their Pay Per Click ads. If their competitorís marketing costs get too high they may lowerrepparttar 138166 bids on their keywords, or stop bidding onrepparttar 138167 word altogether. Either way,repparttar 138168 cost forrepparttar 138169 word goes down, givingrepparttar 138170 fraudulent company an opportunity to increase their ranking onrepparttar 138171 page at a lower cost.

The Search Engineís Response To Click Fraud.

Allrepparttar 138172 Pay Per Click Search engines have systems in place to detect click fraud, and screen questionable clicks. One example of how they do this is by keying in onrepparttar 138173 IP address whererepparttar 138174 click originated from. If they see too many clicks coming formrepparttar 138175 same IP in a short period of time they will often screenrepparttar 138176 traffic.

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