Walking down the cost of AdWords

So January was my first experiment into the mISV world of advertising through AdWords. Technically I had used these previously for ChimSoft, but clicks for "chimney sweep software" cost me almost nothing, and I was already number one for all of my search terms.

I began the month somewhat confounded by AdWords. I put in 5 and 10 cent bids, which Google estimated would give me some clicks for, and yet never would I get any clicks or impressions. Google told me to up my bid. So I upped it to 20 cents a click, and still they told me to up my bid. It was looking like AdWords would not be a feasible source of advertising for budget software.

So just to see it work, I upped my price per click to 50 cents! Sure enough, this got the clicks rolling in, but obviously I was hitting my meager daily budget by about 9am each day.

I then tried some new keywords, but kept the original ones running at 50 cents a click for a while until my click through ratio was quite high. Then I decided to start lowering the cost per click. 45 cents got me around the same amount of clicks. 40 cents started getting more more clicks for my budget... I kept this up, each day lowering the price I was paying per click. Until I was finally down to 10 cents per click, which was basically my original bid. The difference now however, is that I was receiving tons of clicks. My overall position was slightly lower then when I was at 50 cents a click, but my impressions and total clicks were significantly more.

I believe what happened here is that Google had assigned me a high quality score based on the CTR at the higher price. Since my ad was "valuable" I've then been able to take the price down significantly. This may be a helpful tip for those who are continually told by Google to raise their bids. We'll see how it does this month.