The most important thing I have learned in using Google AdWords for a few different websites is that you must resist the temptation to increase your Maximum Cost-per-Click (Max. CPC) while trying to pursue more clicks and a higher clickthrough rate.
The indicators are everywhere in AdWords that a higher bid will get you more clicks! and higher clickthrough rate! and more visitors! more more more! They always tell you when your bid is too low for your ad to show up, and it’s obvious from all the reports that you will get many hundreds more clicks if you raise your bid. But this is a distraction, an evil temptation.
The problem is that your value per visitor, or your return on investment (ROI), does not go up as you increase your bid. Your value per visitor is generally fixed, so increasing your bid just increases your cost per visitor.
Of course, there are exceptions and the analysis can be more complicated than this. But if you’ve already done the analysis to set your maximum cost-per-click at a level to where you are getting a good ROI, then following the siren’s call of increasing your bid is a mistake.
Tags: adwords, bidding, cost-per-click, cpc, google
