A Google Adwords Tip - Lower CPC and Higher Rank

Many people would disagree with what I am about to say, but just here me out first. When you set up a Google Adwords campaign, you've probably heard that you should lower your CPC(Cost Per Click) to what you can afford, and keep your daily budget low so that you don't spend too much. But there are two problems with that.

The first is that Google would rather rank someone that is going to get them $200 a day, than $5. So, if your daily budget is actually realistic, you will not get a very high ranking in the search results(unless it is $100+ per day). Now, some of you are saying,"But I don't have $200 a day?" No, you might not, but I have absolutely never hit my daily budget with adwords. I'll talk about that more in a minute.

The second problem is that if your CPC is too low, you aren't going to get a high ranking in the search results unless you're account has had a history of a good CTR (Click Through Rate). Google lowers your CPC automatically if you have a good CTR over time. However, its hard to get a high CTR if you are not in the top 6 or better results.

So, whats the solution?

You need to put your daily budget higher, and raise your CPC. Now, if you are on an extremely tight budget, you might not be able to do the second part.

How will this help me, you ask?

If your CPC is $1.00 per click in a competitive market, you will be ranked higher. Thus, you will get more clicks, and in time, can lower your CPC once your CTR is good.

I did a test in a market that is fairly competitive. I put my daily budget at $200, and my CPC at $1.00. In a month, I NEVER spent $200(I spent $156 for the whole MONTH), my CTR was 3.11% (anything below about 1.5% isn't good for Google), and my average position is 3.8. Then, I lowered my CPC to $.50, and never lost position, or was not making minimum bids for my keywords, and the amount of sales stayed the same.

Now, if you really can't afford the high CPC, at least raise your minimum daily budget some.

Also, all of what I said assumes that your Google Ad, landing page, and keywords are already relevant. If you aren't sure how to do any of that, read these previous posts on my blog that might help.

http://nwm-internet-marketing.blogspot.com/2006/08/little-help-with-google-adwords.html

http://nwm-internet-marketing.blogspot.com/2006/08/changes-in-google-adwords.html

Take care everyone.