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Pay Per Click Bid Management Strategies (page 3)

Overture PPC bid management strategy example
Looking at a search for "nike shoes" on search.yahoo.com, note that there are 3 full ads across the top and 2 at the bottom. Down the right hand side are 8 brief ads. Look carefully and notice that spots #1-3 are at the top, #4-5 at the bottom and spots #4-11 down the right side. If you can afford the 34 cents to be in spot #3, do so. Being at the top of the page is very valuable. However, it's likely not worth crossing the bid gap to be in spots #1 or #2. If you cannot afford spot #3, notice that being in spots #4 or #5 is twice the bang for your buck. These ads show at the bottom of the page in full form and at the top right of the page in brief form. This is very valuable real estate. This would cost 34 and 33 cents, respectively. Since there is no bid gap, pay for spot #4.

If that is still above your max CPC, note the remaining bid gaps. For 17 cents, you'd be in spot #6 and still above the fold, albeit in a brief ad on the right hand side of the page. Spot #8 can be had for 12 cents, spot #10 for 11 cents and bidding the current minimum, 10 cents, earns spot #15. Clearly, bidding 2 cents above the minimum achieves a ranking jump, from spot #15 to spot #8. It is rarely worth bidding the minimum. At the top end of the bidding range, you'll find bid gaps. At the bottom end, you'll find minor increases in bids often result in major ranking jumps.

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