Super Affiliate Bidding Strategies, Part I
October 19th, 2007 by 
Amit
In a previous post I talked about how you need to go wide (bid on broad keywords) before you go deep.
Now there’s another pitfall I didn’t mention that can kill your ppc efforts died in their tracks, even if you have an excellent keyword list, and you go wide, bidding on all the broad keywords right from the get go.
Before I tell you what this major pitfall is, let me paint a scenario for you, that I’m sure is all to familiar:
Joe is launching a new affiliate offer on Adwords. He has really done his research and compiled a nice broad keyword list to bid on.
Joe launches his campaign bidding 0.20 to start with. He lets his campaign run for several days. In those several days he gets 500 clicks from his Adwords campaign and ends up making 4 sales at $20 per sale = $80 in commission.
However, Joe spend 500×0.20 = $100 (I know average cpc is less than max cpc, this is JUST an example). So he has a net loss of $20.
So now Joe figures : “Great, I found a winner! Now let me lower my bid to 0.10, so then for every 500 clicks, or $50 I spend I make $80 in commission. A $30 net profit!”
Joe lowers his bids to 0.10, he notices he’s traffic drops considerably. He thinks : “Okay, so I have a fraction of the traffic I used to, no big deal, at least I’m profitable at 0.10/click.”
After waiting almost two weeks, Joe notices he has 500 clicks on his campaign but no sales! He thinks : “Okay, this is bad, but it’s probably just a bad week! Damn! I’ll let it run for another 500 clicks.”
After another 500 clicks Joe still has no sales on his campaign. At this point it’s been weeks since he started the campaign, in frustration he figures “Things just fizzled out!”
He pauses the campaign and moves on.
Sound familiar?
So what went wrong with Joe’s campaign?? Stay tuned for Part II…
Posted in PPC Marketing, Super Affiliate Mindset | 
My guess is that by bidding .20, the converting keywords were in “soso” positions giving him decent sales. Then he dropped everything by .10 which causes the converting keywords to go to horrible positions since he does not have a high CTR, and history.
With the converting keywords pushed back to bad positions, no one’s going to click them, thus creating no sales.
Yeah. In Joe’s position I’d have plowed the $80 back into raising the bids on keywords that were converting. I might also have looked at match type, variants of the words and negative keywords.
I just made a post about this on my blog. Well similar, I was talking about how people bid low on keywords and then even lower their keyword prices more, when what they really need to do sometimes is raise their bid score to make a profit combined with raising their quality score. Sometimes bidding too low can kill a campaign in my experience while raising can sometimes work. Its really about testing as some niches lower bids work and some higher bids work.
Hi Charles,
You’re exactly right! You spilled the beans LOL!
I will explain how I creatively deal with this situation.
Actually Amit, I was just able to connect this post to another one you wrote a while back
http://www.superaffiliatemindset.com/how-super-affiliates-set-their-bids/
lol I read this blog too much
p.s. Your Super Affiliate Accelerator is honestly the best learning tool I’ve come across. Learning 10x more from it then the ppc classroom.
Would just making the MAx CPC on the Adgroup highier be OK? Does not Google only charge you one cent highier than the highest bid?
LOl i was about to comment on another blog post amit made which is so similar to this one but charles beat me to it.
anyway Amit, I have a question.
1) how do you crack a hyper competitive keyword?
In reading your blog i have found that you usually bid the same amount on all keywords ( i can’t remember if you bid breakeven at 1% conv rate )
So my question is do you leave it at that? I know you bid higher for those converting better ( like higher 10% for those with higher than 50% ROI etc )
I want to know is there any other thing you do? For example bidding high to get the number one position which i my experience is great because you pay a lot less than your competitor and your QS is over the roof.
Im finding myself in a similiar position for one campaign right now.
It seems like you need to initially lose money that is bid enough to make the first page and then once you have established a history — however long that takes ? then you might be able to bid lower and stay on the first page ? I dont have a definite answer myself right now - maybe Amit will shed some light in his next post.
It seems like you are at a disadvantage when you enter the market as opposed to established players —
How long it takes to establish history to be able to compete with established players - Well that is the question .
Either way it takes some skill and experience to deal with such tight margins.
Another comment ..
Google claims that your quality score is normalized to its ad position per this comment http://www.webmasterworld.com/google_adwords/3193035.htm but I have my doubts maybe Amit would shed some light on that matter as well
It would seem like a good business move to make advertisers pay more when entering a new market
Nice Post Amit. Ironically, this is what i went through with one my campaigns recently. I got my first two sales right of the bat after launching. Right after that, i broke my keywords in 6 different ad groups, added more keywords and lowered the bids. I got the same amount of clicks as before but after 100+ clicks i had no sale. I panicked and paused some of the ad groups and after almost 2 weeks and after 600+ hops, i have no sale. I couldn’t figure out why.
Anyhoo, can’t wait for the part two of this post.
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