We highly recommend using automated bidding features whenever possible. 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). For example, the top three positions for the keyword “Mortgage” may be listed as: Position # 1 $1.00 Position # 2 $.79 Position # 3 $.78 In this example the advertiser in the #1 position is overpaying for their traffic. [...] Effective Keyword Bidding Strategies Given these alternatives it may make more sense to opt for the # 2 position. BidRank is another tool we recommend for optimizing keyword bids, and avoiding “Bid Gaps”. In addition to the tools offered by the PPC Search Engines to eliminate “Bid Gaps”, there are several third party Bid Management applications that will do the trick. When doing Pay Per Click Advertising you’ll often see “Bid Gaps” emerge among the cost per clicks of the keywords you’re bidding on.
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