042009 external deck bid simulator - amazon...

May 2009

Do you ever wonder … ?

… what would be the new position of my ad if I bid $3 instead?

… if I increase my Max CPC bid from $2 to $3, how many more clicks can I expect to get?

Google Confidential and Proprietary 2

… how much would the clicks costs?

… how can I bid more effectively?

Bid Simulator: What are the advantages?

Adds transparency into Google’s auction process and enables informed bidding decisionsEstimates the click, cost, impression, and average position data that your ads would have received in the last seven days had you set different keyword Max CPC bids. Enables you to compare the performance of different bids and select the one that works best for you.

Simplifies bidding process

Google Confidential and Proprietary

Simplifies bidding processReduces the amount of time spent doing trial and error experimenting with various keyword Max CPC bids.

Enables calculation of incremental cost per click (ICC) Enables you to take incremental cost per click into account by communicating click cost information at different bid levels. More on what ICC is and why it matters later.

Bid Simulator | Can you use this?

• Are currently using

– Conversion optimizer

– Budget optimizer

– Position preference

– Ads scheduling (advanced or basic)

You can not use bid simulator if you:


– Ads scheduling (advanced or basic)

• Have campaigns that hit your budget

Note: If you are an Enhanced CPC beta participant, you will see the bid simulator

option but should not use it. If you use any of the above, bid simulator will not show up.

Bid Simulator | How does it work?

Your quality score

We know

Your competitors’ bids and their quality scores

Amount of traffic search network received last week

Probability of a click on your ad given its position

Google’s auction system


We estimate

Which position your ad would have shown at for any bid

The number of clicks you would have gotten at those positions

The cost of those clicks

Note: This is a simulation of last week's data. Next week's results could be very different due to

changes in search traffic or actions by other advertisers

Bid Simulator | Keyword thresholds

In order to get simulations, your keywords must meet adequate traffic thresholds

Receives adequate traffic • Click, cost, impression, and average

Keyword (in the last seven days) Feature simulates


Receives adequate traffic • Click, cost, impression, and average position data

Receives lower traffic • Click and cost data

Receives hardly any traffic

. . or keyword was recently added

• No simulation data

Bid Simulator | Accessing the tool (step 1)

Accessible from the AdWords front-end. Sign into your account, and you are ready to begin


Select as many keywords as you want to see simulations for and click on “Edit Keyword Settings”

Bid Simulator | Accessing the tool (step 2)


• Click “bid simulator” under any keyword’s search bid

• You cannot choose keywords in bulk but must click the bid simulator link individually for each keyword

Bid Simulator | UI – Scenario 1

Scenario 1: Your keyword receives adequate traffic: shows the estimates of clicks, cost, impressions and average position for several bids


;

Approximatehypothetical bid range:Max (2 x current bid)Min (0.5 x current bid)

Bid Simulator | UI – Scenario 1 (close-up)

Scenario 1: Your keyword receives adequate traffic: shows the estimates of clicks, cost, impressions and average position for several bids

Date range of simulation


Current bid


Scenario 2: Your keyword receives lower traffic: shows the estimates of impressions and average position


Date range of simulation

Current bid


There are no estimates for a keyword that does not meet any threshold. either because the keyword was recently added or the bid is too low to receive any impressions


Bid Simulator | Practical example

… I’m the marketing manager at PowderSki.com and need to bid more effectively in order to get promoted this year! What should I do?

Well . . . . I recall seeing an AdWords blog that described a free feature that will give me the insight to make better bidding decisions.

So, let's see what I can do here . . . Our most important keywords (i.e. the ones that spend the most) get more than 30 clicks a week, so I should be able to see bids vs. click cost data for them.


data for them.

Let's look at [skis].

At our current bid of $1.00 we got 69 clicks for $32.20. What if I went up to a bid of $1.25. That would mean 119 clicks for $68.10. Hmm is it worth it?

We make a profit of $50 per conversion and our conversion rate is 10%.

By increasing my bid to $1.25, I would be spending $35.90 more for 50 more clicks. I expect those 50 clicks to turn into 5 conversions (at our 10% conversion rate). And I expect those 5 conversions to bring in $250 (since our average profit per conversion is $50).

Wow! Spending $35.90 to get $250 seems like a good deal. I should increase my bid to get those profitable clicks.

Bid Simulator | Things to note

When a new keyword is added or a campaign started, simulations are generated once there is enough click or impression data

Bid simulator does not simulate conversions or predict future results

Data gets refreshed once a day


Bid changes do not hinder our ability to simulate

For broad match keywords, the # of impressions (and, therefore, clicks) can change dramatically with each bid. Even for a KW with avg position 1.1, increasing a bid could make a significant difference in volume

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Simulations are for Google.com and search only

Bid Simulator | Popular FAQs

Bid simulator is not available on …

• AW3.0

• AdWords Editor

• API

• .CSV downloads

• Bulk changes

How is bid simulator different from Traffic

Estimator?

• Bid simulator and the Traffic Estimator use different data

• The Traffic Estimator looks primarily at overall traffic patterns

• Bid simulator's results are specific to your campaign and keywords

• Bid simulator is more accurate at predicting results for a particular advertiser


• Bulk changes

How does it work for a campaign opted into the

search and content networks?

• This is not available for content. If a campaign has both search and content, bid simulator will only show simulations for search

How does this compare to 3rd party bid management

tools

• This is not meant to replace 3rd party services for bid or campaign management, as they provide many services beyond bid estimates

• This feature should help 3rd party bid management companies to be more effective in helping their customers

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Bid Simulator | Planned future features

Additional features • Simulation at ad group and campaign levels

• AdWords 3.0


Compatibility with

• AdWords 3.0

• API

• Editor

• Conversion Optimizer

• Ads scheduling

• Budget-constrained advertisers

Bidding Concept | Incremental cost per click (ICC)

ICC measures how much extra you need to pay for the extra clicks when moving from a lower bid to a higher bid

Bid simulator enables you to calculate your incremental cost per click. It’s important to understand this concept to utilize the feature fully


Bid Clicks Cost CPC Change in cost Change in clicks ICC

3 31,200 $3,770 $0.12 $3,770 - $3,360 = $410

31,200 - 30,700 = 500

$410 / 500 = $0.82

2 30,700 $3,360 $0.11 $3,360 - $2,810 = $550

30,700 - 28,000= 2,700

$550 / 2,700= $0.20

1 28,000 $2,810 $0.10 --- --- ---

Bidding Concept | How to use ICC


3 31,200 $3,770 $0.12 $3,770 - $3,360 = $410

31,200 - 30,700 = 500

$410 / 500 = $0.82

2 30,700 $3,360 $0.11 $3,360 - $2,810 = $550

30,700 - 28,000= 2,700

$550 / 2,700= $0.20

1 28,000 $2,810 $0.10 – – –


Keyword 1

Keyword 2

Current bid


Scenarios: Which bid should I raise?• I have extra $600 approximately – raise keyword 1's bid from 1 to 2 because

the ICC is lower than from A to B

• I have additional extra $1,000 (beyond the extra $600) approximately – raise keyword 2's bid from A to C. Don't raise keyword 1's bid because the ICC is higher


C 21,545 $2,760 $0.13 $2,760 - $2,360 = $400

21,545 - 20,115 = 1,430

$400 / 1,430 = $0.28

B 20,115 $2,360 $0.12 $2,360 - $1,810 = $550

20,115 - 18,000 = 2,115

$550 / 2,115 = $0.26

A 18,000 $1,810 $0.10 – – –Current bid

Contacts and Resources

Contacts • AdWords help email


Resources• FAQs:

http://adwords.google.com/support/bin/topic.py?topic=19567

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042009 external deck bid simulator - amazon...

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