Google AdWords – Low Competition, Still High Bids?

Many new Google AdWords advertisers complain that though they have managed to identify low competition keywords the AdWords algorithm assigns very low Quality Score to their keywords which leads to pretty high bid requirements for them. It defies logic – they argue since market forces are considered to ensure that low competition is coupled by low prices. In this article we discuss cases where the keywords are far from being popular among users.

1. “The system appears to be optimized for people selling goods of interest to millions of people, to huge marketers no matter what they are selling…” – this is an excerpt from a blog entry often cited by newbies. In some sense, it is true. It is much easier to advertise appropriate products using popular keywords searched for by hundreds of thousands of people especially if Google is *optimistic* about these keywords. However, Google is a profit oriented mass media and not a charity. Which mass medium would make life easier for someone with extremely uncommon keywords? Would TV commercials be helpful in marketing LaTex, a physics related “equation editor”? A new brand of shampoo is much more suitable for TV, isn’t it?

2. The problem is twofold.

– a. Historical CTR is a very important factor in your keyword’s Quality Score.

– b. Lack of previous history makes Google cautious.

(Google has good reasons for a./ and b./ and that boils down to *relevance*. However, this question is beyond the scope of this short article.)

Now, if your fellow advertisers used your keyword poorly in the past, Google is pessimistic about this keyword. If they did not use it in the past or just a few times, again: Google is pessimistic about this keyword. Google’s pessimism is, of course, reflected in your keyword’s low Quality Score which in turn means high bids for you.

3. Someone has recently asked me “Can only commonly-used search terms be used for keywords?” They are probably much easier to use due to 2.b. So what can advertisers affected by 2.b./ do?

First off, what would the equation editor’s seller do in regard to offline advertising? He may perhaps try to identify a periodical on physics which is read mostly by research team members and place an ad in it. Similarly, he can identify a few physics related websites allowed for placement targeting within AdWords and only run his ads there.

Others might be more interested in a general audience so they need to bid for keywords and the equation editor’s seller may also decide to bid for keywords in regard to his specific placements. The issue of 2.b is still to solve. Actually they need to alleviate Google’s pessimism about their keywords and as everything else, it costs money. If Google misses a good history, they have to create one themselves.

Though the bid is relatively high initially, they need to run the ad for some weeks. The turning point in regard to Google’s mood is believed to be around 2.5 CTR. If they can persuade Google through their results that they can produce a CTR above that value in the long run, they may expect the bid to fall drastically and remain low or even very low for the rest of the time. However, whether or not it’s worth the investment should be considered by themselves.

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