Today at PPC Summit, we had another round of info packed sessions. This is REALLY great stuff.
I picked up some real gems regarding Google Adwords today :
There’s been a veil of secrecy on Google’s part as to what’s the deal with history?
ACCOUNT HISTORY
There’s been widespread claims in the SEM world that people who have had Google accounts for years have a significant advantage (in terms of lower click costs) over newbies who are just starting out.
Now, one of the presenters actually got some answer out of Google regarding account history, and Google claims is takes only 4 months to overcome the disadvantage of having a new account.
So presumably there’s no benefit between someone who’s had a Google account for 1 year vs 5 years, once you’ve had your account actively running for about 4 months you’re on a level playing field – according to Google.
What sucks is when you first start a new account you could be paying 30%-60% more per click than you otherwise would, just for having a new account!
CAMPAIGN HISTORY
Now many of you have heard that when you first start a new campaign you’ll get high click cost and/or poor ad positions until you’ve build some history.
But how long do you have to build history on a new campaign anyway?
Again, according to Google, in the case of campaign history it takes approximately 2 weeks to build up your history.
So over the first two weeks of building up a campaign expect your traffic to increase and your CPC to drop as your history builds.
There’s keyword history and ad history as well. How fast your keyword history or ad history builds up depends on how much traffic you’re getting.
POSITION NORMALIZATION
Position Normalization? Yeah, sounds like some fancy mathematical term! LOL
Position Normalization was put in place by Google on August 2006, and yet most people have not heard of it.
So what does it mean? It means that Google no longer rewards you JUST for having a high CTR, it’s now ‘normalized for the position.’ So if you’re in position #1 on Google and your CTR is 5%, while most advertisers get 7% CTR in that position, you’ll be penalized, NOT rewarded.
Your CTR only helps as far as it compares to how other advertisers fare in the same ad position.
In the old days you could bid high when you launched your campaign and build up a super high CTR by being in the first position; as a result Google would give you a high quality score. Then you just cut your bid by 75% and your ad would STILL be on the first page thanks to your high quality score.
Guess what? With position normalization this doesn’t work anymore. Unfortunately a lot of people are still aggressively promoting this bogus strategy – totally not their fault, Google slipped position normalization in while no one was looking!
Don’t waste your money by bidding high when launching a campaign – only benefit of biding high now is to build up your ad and keyword history faster – but you don’t have to be in the first position to do this.
I recommend you determine your initial bid as followed:
Assume average conversion rate : 1%=0.01 (5%-10% for pay per lead)
Let’s say you have a commission payout of : $X
I would recommend that you start bidding 1% x $X = 0.01 x $X
Why? Because the Conversion rate times the Commission (affiliate payout) = EPC (earnings per click)
Now if you’re bid = EPC you can expect to break even at this point. Then you can just adjust your bids from there as you collect data.
Now this is just a rule of thumb, but it works well in most cases. It works best if you actually KNOW what your EPC or your conversion rate is for ppc traffic (ask your affiliate manager).
It was SOOO worth paying $1000 to go to the PPC Summit, just for these few tidbits I got on the second day! 
If YOU want to be a super affiliate you have to be absolutely hungry for the knowledge.
I’ve been hungry since day one, and I’m still seeking to take my game to the next level.
account history campaign history position normalization ppc summit
The only bad part is history doesn’t mean much when google changes its QS algorithm….
Amit,
I also have the same question as Brent. Does pausing a campaign or letting your account sit empty without any funds in it cause the history to refresh?
Thanks,
Debby
Debby,
When you pause a campaign it just sets at a pause position you won’t lose your data or anything like that, so for example you could put 500 into your campaign one month to help build up your history and then pause it until you get more money to put into it and eventually you will be able to let it run all the time when you start profiting…
Its pretty simple
Thanks Tyler!
Roman,
What do you mean?
The reason I wrote it like that for is because thats how Amit had it worded above.
1% x $X = 0.01 x $X
I would imagine he is doing that formula like this
(1% x $X = 0.01) x $X
With X being the Commission…
I mean
(1% x $X) x $X
Tyler,
That answer is good, but it doesn’t apply to what Amit is discussing. What Amit is discussing. What my question was is a build-up of history in a campaign as it relates to CPC. (I’m replying only because Debbie said her question was the same as mine.)
I’m wondering if a campaign that has already built up a campagin history enough to bring down CPC prices is paused, when it is unpaused, is the CPC history still there or is it treated as though it is a new campaign (again, CPC-wise).
-Brent
Roman,
Regardless you can’t go by that if you have a new account. Theres no way you will get 15 cent clicks on a new account well depending on the niche and what your using such as Adwords, MSN Adcenter, and Yahoo Publisher.
Adwords will always have the highest clicks because its a more competitive market, but if you launce new account on adwords the chances of your paying 0.15 cents a click is rare most generally on a new account you have to pay out super high and lose money before you start to break even then as you break even you can start to profit (by bidding down certain keywords).
For example you hold number 3 position with an AVR. CTR of 2 percent well after time goes by you can download all your adwords data through adwords editor and then bid down 15 percent (using 15 percent as an example do whats most fit and works) while you keep the same position through adwords because when the account is new you have to build up your history or even and the same thing goes for when your promoting a new offer with a new keyword list you go to collect data first..
Its been working for me…
I have also ranked keywords like printing, website design, and etc its all search marketing I mean basic common sense
Thats how I do it I just go by whats working and go from there.
Debby,
Why is that what you had in thought was putting a little bit of money into it at a time?
If so that will work because like Amit was saying people that have accounts that have been running for 4 years won’t make a difference just make sure you keep your CTR up and use good converting keywords and just keep pulling your ads in there.
Its all about leveraging and knowing how to bid I launched a campaign the other day and started profiting right off the bat well about 2 weeks ago and never even used adwords I’m just very famaliar with how the whole search results work in general for example I can set here and think of what keywords convert with out even using a conversion tracking tool which I would highly suggest using one like Amit has mentioned, but the only reason I can think like that is because I am so use to using organic search and its very hard to identify what keywords are converting on there, but back to what I was saying I launched a campaign the other day and it started profiting right off the bat until Google came and slapped my Bid prices.
After Google slapped my bid prices I started bidding high and then got my QS back up to great and ok and was paying out 2.40 I was literally paying out 100 percent more then what I was making back, but as you keep paying and putting money into it over time you can start to bid down and start to profit.
Some campaigns will profit right off the bat, but most generally if your launching a campaign thats going to make serious money and you want to drive a lot of traffic to it from more competitive keywords and some ok long tails your going to have to spend more in the beginning stages from my experiences anyways.
The good thing is with adwords after you find out what keywords convert you can then optimize them same keywords for organic search therefore your scaling the process.
Its all makes sense…
Tyler,
I have an Adwords account that has been sitting without any funds in it. I was wondering if that will cause me to start the process over again?
~Debby