Posted by Chaffee Benson, Associate Account Manager
Decreasing your keyword bid to test your keyword position is a good strategy to uncover your optimal cost per click (CPC). For example, a few weeks ago, we noticed a branded keyword’s media cost increase dramatically. Over a 4 day period, the media cost for this keyword doubled despite the fact that the keyword maintained the same average position and competition. Due to budget constraints, we decided to target a lower position and incrementally reduce our bid. As we reduced our bid, we were surprised to find we continued to maintain the top position. We determined that our competitor, who was occupying position 2, did not want the top position, but instead wanted to overinflate our CPC to deplete our budget. This example speaks to the need to periodically test your high position keyword bids. You might find that your CPC has been inflated by your competitors.
In the situation where a keyword’s CPC is on the rise due to increased competition (not competitor inflation), here are a few other ways to preserve your budget:
· Reassess your negative keyword list: Your product keywords could be matching to a new product, TV show, or hot blog topic. Make sure to filter this traffic out using negatives if the traffic is unqualified.
· Create additional match types: Create phrase and exact/standard match types with bids higher than the broad match version. This should help improve your traffic and also reduce your cost.