Question about Adwords and Yahoo Marketing

[Ronald Regging]

First of all, why does Adwords have a $.30 minimum bid on a keyword that only has 1 advertiser? Yet the same target traffic I get to click on my Adsense, only pays $.02-03

Anyway, I have a question about Yahoo, because they seem to be cheaper with my keyword, and they give a $25 credit when you signup.

Anyway, my keyword shows only 2 bidders in the top 5... .10 .05 - - -
It seems logical that if I entered a max bid less then .05, I would show up in 3rd position. But it wont let me enter anything less than .10... So how did the 2nd advertiser get in for .05? I'm not quite sure how this works... If I enter a max bid of .10, will it automatically place me at #1? I'd prefer cheaper CPC rates and get in at #3, because the first 2 are Ebay and some Fishing site, which are in no way relevant to my keyword, so effectively, I'd be the most relevant sponsored search result.

Any insight would be appreciated.

 

[Damion]

First of all, why does Adwords have a $.30 minimum bid on a keyword that only has 1 advertiser? Yet the same target traffic I get to click on my Adsense, only pays $.02-03

The bid amount is what is being paid by the advertiser and when a click occurs a part of this amount will be shared with the publisher, the publisher will not receive the full $.30 but a percentage.

This percentage is calibrated through a algorithym Google applies to their publishers, this depend on for example, traffic flow, conversion rates, time spend on pages and so on...things we don't even know about.

To understand how to use Google Adwords more effectively i would suggest to take a look at this article which gives some good information to get the most out of your Adwords campaign.

Very good info for the novice and the non-novices among us may find a thing or two that they find interesting as well.

 

[Ronald Regging]

Thanks for the response. The main thing I was getting at with the $.30 minimum, is that it makes no apparent sense for them to have a minimum on a keyword that has no competition. It makes sense if there are a lot of competitors who push the value of the keyword high enough that a $.30 minimum would be logical, leaving it open to free market concepts of supply and demand. But for a keyword that only has 1 advertiser, which means there is absolutely no competition, wouldn't it make sense for them to try to get any revenue possible? That's 200k searches a month that even if an advertiser was willing to only pay $.01 CPC, would still be earning them revenue, as opposed to those searches being completely wasted.

Maybe I'm completely wrong and don't understand the process properly, because I wasn't thinking about my ad being displayed on other sites, i.e. any site that uses AdSense... I merely wanted my ad to appear on Google's search results page when my keyword is searched for, under the Sponsored Links section and thats where I was getting the figure of there only being 1 advertiser... This is what Yahoo does, and I assumed you could do the same for Google, but maybe I was looking in the wrong place.

But even though Yahoo does what I want, I still don't understand how their Top 5 shows only 2 advertisers, #1 $.10 #2 $.05 - yet the minimum bid is $.10... Shouldn't I be able to make a bid of $.01 and be placed at #3 until someone else bids higher? And how did the #2 advertiser enter a bid of $.05 when the minimum is $.10?

I appreciate the help and the article.

 

[Damion]

I see your point Herb I have found some feedback on this:

https://adwords.google.com/support/bin/answer.py?answer=6144&query=inactive&topic=0&type=f:

Your keywords may be marked 'inactive for search' and stop showing your ads on search results if they don't have a high enough Quality Score and maximum cost-per-click (CPC). This is another way of saying that your keyword or Ad Group's maximum CPC doesn't meet the minimum bid required to trigger ads on Google or its search network partners. This typically occurs when keywords aren't as targeted as they could be, and the ads they deliver aren't relevant enough to what a user is searching for.
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The translation of this is that Adwords requires that your keywords meet a minimum measure of relevance (i.e. have a minimum Quality Score) to the search terms. If your keywords do not meet this criterion, then your ads will not be served. This is done to protect the quality of the user experience. Adwords could certainly show any number of Ads for any given search, but this would have the effect of diluting the quality and relevance of the ads shown. This formula is applied independently of whether other ads are shown.
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I think this explain well why someone needs to pay more for the keywords nobody is targetting.
Somewhat understandable from Google's point of view but of course not desired by advertisers.

If thousands of people start using adwords for keywords with no competition then the ad network would show a lot of low click/revenue ads for Google making the overall revenue lower for Google.

So to maintain good revenues overall they force their advertisers to pay more.