Effective Keyword Bidding Strategies 78 In this example, if you used any of the “AutoBid” features offered by many of the Search Engines and set your maximum bid to $.99 ($.01 less than your competitor in the #1 position), the system would put you in the # 2 position at $.80 ($.01 more than the next highest bid), while your competitor would still have to pay $1.00 for the # 1 slot (since the system would consider your $.99 maximum bid to be the next highest bid, and adjust your competitor’s bid to be $.01 more). The Pros And Cons Of “Bid Gaps” February 16, 2005About the Author:Stan Hauser is a [...] If your competitor raises their bid the system will continue adjusting your bid until it reaches you maximum bid. You can either pay $1.01 to lock in the #1 position, or bid $.80 for the # 2 slot. These tools allow you to maintain premium positioning for your ads at the lowest possible costs while saving you time from having to check where your ad is ranked every day, and manually adjusting your bids. Example Current bid for the #1 position: $.50 Maximum bid that you specify using “AutoBid” $1.00 The amount the system will set your bid: $.51 It’s important to note that the cost per click may never reach your maximum bid.
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