Yellow Light: Do you tap the brakes and then floor it through the yellow, or stop and shake your head at the guy who ran the light? Is this traffic or bid management in Google AdWords? In this case it is AdWords first page bid.
Google LOVES to give you the yellow warning light on your keyword bids (more of an orange color, but just work with me). They call it “Below First Page Bid”, I call it a casino game. “No Limit Bid’em” Why? Well, what is Google’s number one goal in the world? To provide search results and amazing free software and services? No. They are a business, and they are a very profitable business. Their goal is to make money. Keep that in mind. Always keep that in mind.
The Below First Page Bid warning is a bit misleading. It’s not really true for all accounts. It’s as if the traffic signal is only meant for Toyotas and down, and BMWs and up can drive right through the yellow. The more expensive cars being the higher quality accounts with a more solid history behind it.
The First Page Bid is based on an average cost per click across ALL advertisers. So if you get the notification that your keyword is below first page bid, you may actually be showing between 1-10 (on the 1st page). Check your average position for a recent time period. If it’s better than 10, you ARE on the first page. Amazing.
Like a deal too good to be true, you can get a placement for cheaper than the first page bid. If your quality score, overall ad rank, and historical clickthrough rate are high, you get a deal from Google (BMW-esque account). So when you see the warning Google likes to give you, please check your average position first to see if a bid raise is actually needed. If it’s not, do not raise your bid. You are better than average. Congratulations!
Example of First Page Bid suggestion when cost is low and position is high.
If you are showing in the top positions and you DO raise your bid, you just raised the threshold of the keyword for everyone around you. Then you create an even more expensive bidding war between you and all of the competition. That is exactly what Google likes to see. And you cannot argue against that business model.
The takeaway is to stop running the yellow lights. When you see the yellow light (below first page bid warning…if you weren’t with me for the past 3 paragraphs) don’t immediately open your budget throttle to put the warning behind you. Slow down and stop to check your actual position, and then cruise on home to a balanced AdWords account budget and a lower cost per click. You and your client will be happier.
Happy (responsible) Bidding!