Stop Using Google’s First Page Estimates to Set Your Bids

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Within the Google Interface there’s a super helpful piece of information called the First Page Bid Estimate.  This metric tells you, based on both quality score and competition for the exact match of your keyword (even for broad and phrase keywords), an approximation of where you should set your bid to ensure that you win as many auctions as possible to appear on the first page of the search results.

If you want to see where Google thinks you should be bidding on your keywords you can opt into the First Page Bid Estimate column following the directions here.  I’m sure you’ve also seen keyword statuses that say Below First Page Bid and then the estimated bid in there as well.

You can filter your keywords to see which of them are currently below the first page bid estimate, and then via editing in a table directly in the interface, you can select an option to prefill all CPCs to first page bid.  You can even set up automated rules to ensure that your bids are on the first page and have that rule run every day to make sure you have top visibility.  It makes it extremely easy to follow this estimate and fine tune your bidding strategy.

You probably know all of this already.  And you should stop doing it.

I saw something in my account a while ago that forever changed how I viewed the Google first page estimate.

High First Page Bid Estimate

The Spookiest Thing This October

This keyword was in an ad group with a good impression share (higher than 70%), its bid was set at $17.00, its average CPC was only $7.11, its average position was 2.2.  This keyword was on the first page.  Google was telling me to change its bid to $100.00.  It was terrifying.

Now I recognize that the estimated first page bid is only an estimate (it’s right there in the name).  But this was a glitch in the matrix that I can’t ignore.  It’s also a metric that directly influences the level of competition on keywords.  So if something is calculated based on quality score and competition, but that thing itself directly influences the competition, it needs to be questioned.

I’ve looked into my accounts and the data isn’t as terrifying as I thought it might be.  A small percentage of my keywords are below the estimated first page bid, and among that small percentage only a few are still displaying metrics of a keyword on the first page.  But I’m also keeping a close watch on my keywords and adjusting my bids weekly to ensure that we’re in the average positions that we want to be, which is going to limit how much this happens.

My warning is based on some anecdotal evidence, but also on logic.  If you are following Google’s recommendation, your competitors probably are too.  And if you’re all using an automated function to raise your bids to first page, the competition gets that much stronger and your bids will all be raised together.  Great for Google, bad for you.  Are you relying too much on first page estimates?  Don’t let Google take too much control of your bidding strategy.

It should be mentioned that Google openly acknowledges that their bids aren’t perfect (they say “meeting your first page bid estimate isn’t a guarantee of ad position”).  But as they see it, not every estimated first page bid is high enough.  The language contained within their help section focuses on making sure your ad appears, and the estimate allows you to see where your ad rank should be to appear as much as possible.  If you aren’t appearing, they tell you to improve your ad rank.  That can be done via diligent work on your quality scores, or it can be done the easy way by increasing your bids.  I wonder which route most advertisers take.

There’s also the problem of figuring out just what qualifies as the first page for Google.  According the AdWords help, 1-8 are generally considered first page, 9-16 are generally second page and on and on.  Some searches will show 11 ads, but if your average position is 11 for a keyword you are almost guaranteed to be considered below the first page.  I also can’t find any average positions below 11 in my accounts, so I’m not sure just how low they are willing to go across all industries.

Google’s changes to their results pages are on ongoing process, so just what is considered the first page will probably continue to be a bit of a moving target.  Figure out what average positions work for you and take back control of your bidding strategy.  Use the estimated first page bid as a recommendation, but don’t automate the process.  I know that Google’s not perfect (as the $100 estimate burned forever into my brain), so I’m not going to let them tell me where my bids need to be.

This was the final post in our series about numbers that should be questioned in PPC.  Check out our posts about AdWords and AnalyticsKeyword MatchingPlacement FraudCompetition Metrics and Search Term Reports.

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  • http://flintanalytics.com/ Tim Flint

    I have seen this a lot with an account I work on. This isn’t just an issue for you. This is in a market that is costing $20 per click on average, but they are horrible with the first page bids and tip of page bids. I have been seeing this for several months. I think google is taking advantage of this market that I work in for my client.

    • http://www.hanapinmarketing.com/ Sean Quadlin

      I’m glad that you’re keeping an eye on it. It’s tough, especially if your competitors are using first page estimates to set their bidding strategy. Good luck navigating the waters! Thanks for reading.

      • http://flintanalytics.com/ Tim Flint

        It is especially frustrating you this client is a local company competeing against two national companies with higher margins and an unlimited pocketbook.

  • http://www.hanapinmarketing.com/ Sean Quadlin

    Hey Lauren,

    Thanks for passing along this info. It’s good to keep the whole picture in mind with these bid estimates. The keyword in this example was broad match, but we also bid on the exact version of the word elsewhere in the account and its bid was below $20 and also appearing on the first page (with negligible differences in quality score, so it wasn’t that either). Something wonky was definitely going on with this specific keyword.

    And keep the somewhat ridiculous examples coming. I really appreciate the feedback. Thanks for reading!

  • http://twitter.com/chriskos Chris Kostecki

    Definitely agree that following Google’s lead sends you down a terrible path, but in the end a bid is only a bid, and what is most important is the actual cost per click. I will bid all day at $100 and spend less than $10 on a competitive click, (though also test landing page elements and ad copy in an attempt to drive up relevance and performance).

    Aggressive bidding is even more important with the introduction of more PLAs, the Knowledge Graph, & SPYW. It’s no longer a matter of aiming for the first page, it’s all about the top. If you are not part of the top 3, you might as well be on page 2.

    (also example pic is a broken link)

    • http://www.hanapinmarketing.com/ Sean Quadlin

      Having that much headroom between a bid and the actual CPC would make me supremely nervous. As long as you can ensure that you’re still paying a reasonable amount it would be fine, but with that much headroom you lose out on all of that control.

      Depending on your industry and competition, being in top position can be very important. It may not be feasible with click costs, though, so I like to tailor it to my client’s expected return/CPL needs. I haven’t looked into top page estimates, but I imagine those can be scary as well.

      Thanks for passing this along! (We’ve also fixed the broken link, so thanks for that).

    • Thomas J

      Disagree–I am consistently getting leads for clients in the 5-6 Ad placement. 3-6 range people start “reading” the Ad so its more about Ad Copy than just random first link clicks. Not saying being at the top is bad but its not always necessary.

  • Merula Alba

    Hi Sean,

    I am new to Adwords. What industry are you in that you pay so much for a click?

  • Guest

    Sean – Great information.

    Top of Page estimate is just as flawed too as I am sure you are painfully aware of.

    Google and their reps (who call our clients constantly to cast doubt on our hard work) are always trying to get more money.

    One time I humored Google and the client to raise a bid to their ‘top of page estimate’.

    Guess what happened? The ad position did not go up to the top of the page.

    I never believe Google or their reps or their automated tools and recommendations. Conversion Optimizer?? Sigh….

    Nothing replaces historical data and facts.

    I have a phrase match keyword that performed well from Aug 2013 to Jan 2014, 100+ conversions a month at a great CPA $25.00 which for the particular industry is great.

    All of a sudden Google recommends that my bid is no longer estimated to be first page. Like an idiot I raised bids to circumvent that in order to appease the client but lo and behold CPAs doubled for the few days I did that and conversion volume did not get any better. In fact conversion rate dropped slightly despite the slightly higher Ad position.

    Advice: Ignore those recommendations and take control of your account(s). Who better to figure out what it takes to get the most ideal ad position and cpc than certified experts like ourselves.

    Keep fighting the good fight!

  • Dani Horwitz

    Thanks for the great insight, Sean!

    Just a thought though: by setting a reasonable max bid, you can prevent yourself from paying anything outrageous, even if you do automate the process…