After consulting with many people I’ve never seen so much confusion regarding how bids are determined by Google.
Some people believe that you pay what your Max Bid is and others believe that you pay 1 penny more than the
person below pays.
Neither of those are actually true. It’s rather a combination of those. This confusion has lead many to pay way to much for there bid position because they don’t see the necessity in monitoring bids.
Let me give you an example:
Bidder 1: Max Bid is .55 but pays .51 per click.
Bidder 2: Max Bid is .50 but pays .21 per click.
Bidder 3: Max Bid is .20 but pays .06 per click.
Bidder 4: Max Bid is .05 but pays .02 per click.
Bidder 5: Max Bid is .01 and pays .01 per click.
Hopefully you are seeing a pattern here. The truth is that you actually pay only 1 penny more than the person below you’s Maximum Bid.
But then why is it important to monitor bids you might ask if Google makes you only pay 1 cent more than the Max Bid of the person below you?
In the senario above the best value position is being in #2 because #2 is paying 30 cents less...
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