Given these alternatives it may make more sense to opt for the # 2 position. You can either pay $1.01 to lock in the #1 position, or bid $.80 for the # 2 slot. Why Bid Gaps AppearOften times advertisers in the top position want to put distance between themselves and their competition to avoid having to check each day to see if they’re still in the #1 position. Effective Keyword Bidding Strategies Google claims this allows them to offer advertisers the best ranking on the page at the lowest cost, while guaranteeing the ads they display are relevant to the keywords users are searching on. 78 A “Bid Gap” has appeared between the #1 and the # 2 positions. For example, the top three positions for the keyword “Mortgage” may be listed as: Position # 1 $1.00 Position # 2 $.79 Position # 3 $.78 In this example the advertiser in the #1 position is overpaying for their traffic. The slight decline in traffic from slipping to the #2 spot may be more than compensated by the improved ROI due to the lower cost per click. 78 In this example, if you used any of the “AutoBid” features offered by many of the Search Engines and set your maximum bid to $.99 ($.01 less than your competitor in the #1 position), the system would [...]
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