AdWords Vanity Bidding - You're So Vain..

[abbottsys]

..you probably think this ad is about you, don't you, don't you.. LOL!

Anyway..

I often get pulled into client accounts to audit and cleanup what's been done by SEM management companies. And I often come across vanity bidding. In a recent case the SEM management company had the client at #1 for a $5.50 CPC.

A quick experiment showed that superb traffic was available at $0.87 CPC if the client was willing to take a lower ad rank. I saved them a ton of money. But, I'm still surprised by how many folks fall into the vanity bidding trap.

Do you have a vain client? Share your story.

[AussieWebmaster]

We keep our company name at one - also the domain name and it is not vanity but added branding and better ROI.... look beyond the cpc for the cpa and volume of conversions

[abbottsys]

Originally Posted by AussieWebmaster

We keep our company name at one - also the domain name and it is not vanity but added branding and better ROI.... look beyond the cpc for the cpa and volume of conversions

Sure, I do the same on company name. That's a very special case. But bidding yourself up to #1 on large production keyword sets is a dangerous game. That's vanity bidding. I've found that not only does CPC shoot up, but cost/conversion goes through the roof.

[jewboy]

if you have a well known brand, it's likely your competitors are bidding on it to steer your visitors to their sites. I know it sucks to pay for your own name to rank #1, but sometimes it's necessary to grab those navigational searchers to your own site instead of losing them to the competition.

[AussieWebmaster]

no sense giving away all you branding work

[rustybrick]

Is this too vain?



;-)

[BoogalooDude]

I love the people who pay through the nose for the number one spot. They basically subsidise the PPC market for the rest of us who are happy to go for a better ROI with a lower spot.

[abbottsys]

Originally Posted by BoogalooDude

I love the people who pay through the nose for the number one spot. They basically subsidise the PPC market for the rest of us who are happy to go for a better ROI with a lower spot.

Exactly. And there seems to be a huge supply of these folks. But you can see how it happens... you have a company who regards themselves as #1 in their market, so they assume they must be #1 on AdWords and bid accordingly. They have the marketing dollars, and don't really care or understand the alternatives.

[abbottsys]

Originally Posted by rustybrick

Is this too vain?



;-)

Rusty, did you invent this? NetSol is telling me that domain is not registered. But anyway, it's a superb ad, clearly written by an expert... keyword in the headline and in the domain name, a good call to action with strong benefits.

[CarrieHill]

Because I've dealt directly with clients on these issues, there are SOME clients that think if their PPC is NOT #1, it's not working. I have one client in particular that has a FIT if they drop from the #1 spot for a very competitive keyword - but complain when I ask for more PPC money every month. They don't understand that by insisting on this spot, they're causing their OWN costs to go up because inevitably someone will out bid them.

For more level headed clients I test ads at various positions for a few months and measure conversions - when i find the "sweet spot" I try to hold it there as best I can, but do test the other spots on occasion to make sure the best converting spot doesn't move around on me.

I feel your frustration - another frustration is the list of crappy keywords they insist on bidding on that don't drive TRAFFIC, let alone conversions - we call that the CEO list

[abbottsys]

Originally Posted by CarrieHill

Because I've dealt directly with clients on these issues, there are SOME clients that think if their PPC is NOT #1, it's not working. I have one client in particular that has a FIT if they drop from the #1 spot for a very competitive keyword - but complain when I ask for more PPC money every month. They don't understand that by insisting on this spot, they're causing their OWN costs to go up because inevitably someone will out bid them.

For more level headed clients I test ads at various positions for a few months and measure conversions - when i find the "sweet spot" I try to hold it there as best I can, but do test the other spots on occasion to make sure the best converting spot doesn't move around on me.

I feel your frustration - another frustration is the list of crappy keywords they insist on bidding on that don't drive TRAFFIC, let alone conversions - we call that the CEO list

Excellent summary of the vanity bidding issue, and exactly what I often come across. I like your "CEO list", it's the ultimate in vanity, #1 and not even clicks. I'm going to use that term with my next vanity client

[AussieWebmaster]

Originally Posted by BoogalooDude

I love the people who pay through the nose for the number one spot. They basically subsidise the PPC market for the rest of us who are happy to go for a better ROI with a lower spot.

See I think you guys have this wrong.... by having people pay through the nose for #1 it raises the overall average of the numbers so the whole inactive thing has a higher ceiling.

[abbottsys]

Originally Posted by AussieWebmaster

See I think you guys have this wrong.... by having people pay through the nose for #1 it raises the overall average of the numbers so the whole inactive thing has a higher ceiling.

This is a very important point, but may not be as bad as it first appears. The details depend on google's ad ranking system which we all know is insanely complex.

Super high bids (vanity bids) will pull up other bids, but it's not be a simple linear increase for all in the auction. It's a complex situation.

For example, take an extreme case: suppose there are 8 ads eligible for display on a given SRP. One guy has maxCPC set to $10.00 and all other have maxCPC set to $0.50 What happens? Well, the guy at $10 will pull up all the others, but he cannot pull them up beyond $0.50

[chris1]

Originally Posted by AussieWebmaster

See I think you guys have this wrong.... by having people pay through the nose for #1 it raises the overall average of the numbers so the whole inactive thing has a higher ceiling.

I agree completely. It increases the click cost of all competitors and can raise the dreaded minimum bid for those keywords as well, especially if more than 2 companies start "vanity bidding" for a popular keyword.

Of course, if competitors are doing this, it is almost guaranteed that they are not tracking ROI down at the lowest level as a competent PPC marketer should be. Assuming this is true, chances are they aren't using the techniques that we take advantage of to maximize profit across competing campaigns: highly targeted ads, effective keyword insertion, negative kewyords, match type testing, dayparting, landing page testing, geotargeting, etc.

This allows us to make a killing on the more specific, conversion driving traffic with lower bids and higher ROI. Plus, companies who are "vanity bidding" seem more likely to have a fixed PPC budget (rather than a flexible one based on maximizng profit) and are using an unjustifiable percentage of their budget on term(s) that aren't generating the kind of conversion/ROI that other terms could be.

[chris1]

Originally Posted by CarrieHill

Because I've dealt directly with clients on these issues, there are SOME clients that think if their PPC is NOT #1, it's not working. I have one client in particular that has a FIT if they drop from the #1 spot for a very competitive keyword - but complain when I ask for more PPC money every month. They don't understand that by insisting on this spot, they're causing their OWN costs to go up because inevitably someone will out bid them.

I've never done this before, because I have never been in your situation. But depending on your level of frustration, you could set up a geotargeted campaign where your client resides. Include just the one term they want to be ranked #1 at and make sure you bid to #1 here. Then drop your bid to a practical level for this keyword in your main campaign. This will keep your client happy and ensure that you don't blow through your entire budget for one non-performing keyword.

Its risky and there are definitely reasons not to do this. Just a thought.

[Ryan L]

I vanity bid, for numerous reasons.

One particular reason I bid high on certain keywords is to squeeze my competitors.

They can try and evade me all they want but eventually they will realize that I am one step ahead of them.

I own all the keywords that convert and my ROI is healthy, if I find a better spot or the keyword doesn't convert...I am happy to let others bid more.

Hows that for vanity.

From time to time I will also bid on my competitors vanity just to let them know that I am on to them.

***only possible due to extremely tight sales/supply channel

[abbottsys]

Originally Posted by Ryan L

I vanity bid, for numerous reasons.

One particular reason I bid high on certain keywords is to squeeze my competitors.

They can try and evade me all they want but eventually they will realize that I am one step ahead of them.

I own all the keywords that convert and my ROI is healthy, if I find a better spot or the keyword doesn't convert...I am happy to let others bid more.

Hows that for vanity.

From time to time I will also bid on my competitors vanity just to let them know that I am on to them.

***only possible due to extremely tight sales/supply channel

Good for you. But your ROI is healthy, so you're a smart advertiser, not a vanity bidder
Vanity bidders often don't even measure their ROI. Let's face it, if you were bidding $100 maxCPC and getting superb ROI (maybe because you were in a highly specialized industry or selling a very high ticket item) then you still wouldn't be a vanity bidder.

[CarrieHill]

Originally Posted by chris1

I've never done this before, because I have never been in your situation. But depending on your level of frustration, you could set up a geotargeted campaign where your client resides. Include just the one term they want to be ranked #1 at and make sure you bid to #1 here. Then drop your bid to a practical level for this keyword in your main campaign. This will keep your client happy and ensure that you don't blow through your entire budget for one non-performing keyword.

Its risky and there are definitely reasons not to do this. Just a thought.

I've been tempted - sorely tempted. With my luck my client will travel and freak because people in Minot, ND can't see his Ad #1 (nothing against the Minot-ians of course)

[BoogalooDude]

Originally Posted by abbottsys

Super high bids (vanity bids) will pull up other bids, but it's not be a simple linear increase for all in the auction. It's a complex situation.

I don't get this.

If there are 9 ads on page 1, I know I can get onto page 1 for the minimum bid price, 5p. It doesn't matter to me if the top two advertisers are in an insane bidding war for the number one spot and paying £4 or £5 for their clicks, I still only pay 5p for my number 10 spot right?

[rustybrick]

Originally Posted by abbottsys

Rusty, did you invent this? NetSol is telling me that domain is not registered. But anyway, it's a superb ad, clearly written by an expert... keyword in the headline and in the domain name, a good call to action with strong benefits.

Made it up. Not bad, eh?