I just got off the phone with my mastermind group. We have calls every two weeks, where we discuss our goals and obstacles. We talked about some really powerful stuff, I mean stuff that you’ll NEVER read in an ebook or teleseminar from any guru.

I won’t get into everything we discussed since I’m sworn to secrecy, however, there’s was one tidbit that the other members said it was okay for me to blog about.

The question always comes up, “How do you set your starting bids when you launch a new campaign?” The age old question, right?

Here’s what most affiliates do: when they launch a campaign they set their initial bids very low, because they are scared they will lose their shirt!

THIS IS A HUGE MISTAKE!

Here’s what happens: Joe Lunchbucket affiliate discovers a HOT market, and he proceeds to put together an Adwords campaign. He thinks: “Man, I’m gonna make a killing!” He sets up super-targeted adgroups, spends hours doing thorough keyword research. Finally he launches his campaign, setting his max bid at 0.10, thinking: “let me start bidding low, and increase my bids once I start seeing sales. I don’t want to lose my shirt!”

Sound familiar?

Here what happens, Joe’ s campaign gets no sales after 10 days and a whopping 500 clicks. He scratches his head in confusion, pauses his campaign thinking “I’ll get back to it.” He reads a sales letter about how to get rich with made for adsense sites and completely forgets about the failed campaign in the hot niche.

So what happened, was the niche a dud or did Joe do something wrong?

Here’s what happened: by bidding low and playing it safe, Joe pushed the ads for the high converting keywords/ads to page 2 & 3. And not surprising, even after 10 days these keywords/ads barely got any impressions or clicks.

“Amit, how can you possibly know that he pushed the high converting ads/keywords to the second or third page?” Think about it, what keywords have the highest bid prices, I mean why would Adworders bid $1.00, $2.00, or even $20.00 on a keyword.

BECAUSE THAT KEYWORD IS MAKING THEM A LOT OF MONEY!

Simple fact: High converting keywords have high bid prices, and low converting keywords have low bid prices. So by bidding low on all your keywords your pushing the high converting keywords on to the 2nd and 3rd page, while the low converting keywords remain on the first page.

So Joe gets a disproportionate amount of traffic (probably 95%) from low converting keywords, makes no sales, and pauses a campaign that had potential to make significant profit. Then Joe goes on to a affiliate forum complaining how his merchant must be stealing his sales, afterall, he got 500 clicks and no sales, it must be the merchant’s fault!

Sad, but true.

So here’s how you bid to prevent the above scenario: Bid HIGH on all your keywords (how high depends on the market) so that ALL your keywords are on the first page.

Worried about spending $1000s with no sales? Don’t! That’s what the daily budget is for, set your daily budget to low, and your keyword bids high.

Now what is a low daily budget, well it depends, for me it’s $500/day. However, if you’re just starting out you may want to start with $20/day, or even $10/day. With all your ads on the first page you can get a fair assessment of your campaign performance.

Do YOU need to bid up some keywords?