Is Budget Busting Possible With Algo Change?

[AussieWebmaster]

I just finished a blog entry here that outlines a way to budget bust your competitors (http://blog.searchenginewatch.com/blog/071001-141929) - well at least the high bidding novice or less analytical kind.

Give it a read and let me know what you think.

[Ryan L]

I am not so sure that I could ever swallow letting my competitors just having my clicks.

Besides I worry that the same competitors that you suggest targeting; the ones that are not well versed, are the most dangerous. They probably have no handle whatsoever on ROI, in fact I would presupppose that it's the reason they are bidding up the keyword in the first place. In which case trying to bust their budget makes no sense, they'll just up their limits.


Maybe at some point they will smarten up and realize that they are wasting money, lowering their bids or exiting the market. Unfortunately I am not willing to subsidize their stupidity with potential customers.

[AussieWebmaster]

We are going to need to do something.... MSN has now added this same method - max bid influence to its pricing - can Yahoo be far behind?

http://adcenterblog.spaces.live.com/Blog/cns!85E824269AB8C30D!542.entry

[BuckfastMonk]

Nice blog post. Rest assured yahoo will follow suit

[Ryan L]

haha thats rich, msn clicks, they can have em!

I can barely justify the time it takes to manage that account.

[stoneysubaru]

I would just like to clarify something stated in your post. Being in 1st position in PPC does not necessarily mean that you will get more clicks than 3rd position. If you are number 1 and your ad is not appealing for the user you will not generate many clicks.

[Marcosll]

stoneysubaru, position is extremely important as far as clicks go.

First position will usually get nearly half the total clicks, relevance will affect that percentage slightly. Generally an irrelevant 1st postion ad will get more total clicks than a relevant 3rd position ad.

[Ryan L]

Has anybody ever seen any metrics which spell out how many PPC users actually use conversion and analytics code?


$25 a click, I hope theres a lot of margin in them thar hills

[BuckfastMonk]

Marco did you have to do it?

[stoneysubaru]

That is rubbish marco. If that was the case there is no point of having any ad text. I agree with you that if the top position is on the left hand side (for example) in Google it could easily be confused with SEO, therefore gain more clicks. But if the ad is placed at the top on the right hand side but is not relevant to the search query, the positions below will acquire more clicks. Fact!

[Ryan L]

That is rubbish marco. If that was the case there is no point of having any ad text. I agree with you that if the top position is on the left hand side (for example) in Google it could easily be confused with SEO, therefore gain more clicks. But if the ad is placed at the top on the right hand side but is not relevant to the search query, the positions below will acquire more clicks. Fact!


do you mean confused with Organic Serps???

No I am confused...all this darn lingo!

[barnburner]

This is a fairly ridiculous proposition as you know nothing about your competitors business or search strategy. Seems to me that it is fairly asinine to spend your time trying to ding their efforts for an hour or two each day rather than concentrating on the best way to maximize your spend. Nobody managing a larger account has time for this. None of this is to mention that you're only accounting for one competitor in this scheme...most of us have at least 5-10 competitors on every power keyword.

[AussieWebmaster]

This is a fairly ridiculous proposition as you know nothing about your competitors business or search strategy. Seems to me that it is fairly asinine to spend your time trying to ding their efforts for an hour or two each day rather than concentrating on the best way to maximize your spend. Nobody managing a larger account has time for this. None of this is to mention that you're only accounting for one competitor in this scheme...most of us have at least 5-10 competitors on every power keyword.

lol... mate I think I know my space... forex industry is one of the top competitive spaces out there.... and I know it well enough to know the top guys who are limited to certain spends - there really is no other person in the space with unlimited budgets - so I can tell who has a budget run out month after month with a few days left - you just have to keep track of who drops off across the board.

I know virtually all keywords my main competitors use on all major engines... I know their average positions - their ads and landing pages...

We have 360 advertisers for a pile of our terms....

[barnburner]

You can spend your time making business decisions based on guess-timates of your competitors data. Or you can manage to your own non-black-box metrics that represent actual dollars, cents, conversions, ad pages etc. Maybe that doesn't hold in your space, but in the majority of search verticals (finance, auto, retail) that make up the plurality of SEM spend, there are dozens of competitors and an outsider wouldn't have a shot at making these approximations. Does this mean you should ignore your competition? No. But it also doesn't mean you should try some half-baked dayparting scheme when you could be undertaking more impactful activities. Again, maybe this works in your vertical. I'm just pointing out that it's pretty useless for most of the major verts.

[AussieWebmaster]

I agree you should first and forewmost have your owsn campaigns tight.... we do this but also look at how to significantly lower the competition by making them pay a little more.

Budget busting was a nig play in the old Overture system... finding a way to do the same with the forced max bid would possibly haved Google drop this method which really forces tight competitive spaces into spending more for less.

[AussieWebmaster]

Barn I agree most marketers should not be trying this as it is a difficult and tricky way to push your competitions pricing... but in a truely competitive space you want to develop any edge that is possible.

I am not saying this is totally perfect... just a glitch that can be worked... I will keep you posted on our efforts....

[barnburner]

I see your point, this is kind of a supplemental test that could work in some cases. That's probably true. I just didn't see it as being some widely applicable best practice. In the right environment it could be effective.