google adwords

Google Ads Bidding Options: Overwhelmed With Choices?

Back when I first started learning pay per click (PPC), there was only one bidding option for what was then called Google Adwords, manual cost per click (CPC). That was it. It certainly made the decision on which method to use simple. While the decision was simple, the method wasn’t. Sure you could use a simple formula: CPC * (how many clicks it takes to get a conversion) = your Target CPA. I always tended to bid by feel and still do in manual CPC campaigns too this day. Mostly because I always want to pay the lowest cost per click possible.

Manual CPC

Back then int was much more simple. Bid one penny more than your competitor and show up above them. There were even tools you could get that figured out what your competitors were bidding. You could use an automated bid management tool that would use that data to get the position you wanted. Then came quality score changing the bidding landscape on Google Ads to this day. The new formula became (max CPC * Quality Score) = Ad rank. The ad rank among your competitors is what determines your position on the search results page.

According to Google:

Your max. CPC bid is the most you'll be charged for a click, but you'll often be charged less - sometimes much less. That final amount you're charged for a click is called the actual CPC.

Actual CPC is often less than max. CPC because with the Google Ads auction, the most you'll pay is what's minimally required to hold your ad position and any extensions shown with your ad, such as sitelinks. For example, if your Ad Rank places you immediately above search results (Ex: in the fourth position) with location extensions and sitelinks, you’ll pay the minimum amount necessary to keep that position -- and meet the relevant thresholds tied to that position -- with those extensions.

Very rarely do you actually pay your maximum cost per click, but you’re telling Google that’s the most you’re willing to pay. The difference between your average CPC and maximum CPC is called headroom. Here’s an insiders tip: it’s a good idea to have your headroom be as low as possible. This will typically reduce your average cost per click from what we’ve seen over the years.

Manual CPC bidding is a bit of a lost art in today’s PPC landscape. Personally, it’s been by far the hardest thing to train anyone in PPC on doing. Most PPC managers that excel at it have been doing PPC management before there were any automated solutions to bidding.

When Should You Use Manual CPC bidding?

Manual CPC bidding is available for search, shopping & display campaigns. If you ask Google, they’ll likely tell you NEVER. In fact, when you change your bidding settings in the interface it actually says this:

google ads manual CPC.png

Now don’t get me wrong. This is a 100% accurate statement, but so is Setting bids manually (when done properly) may result in higher performance. Trust me when I say, don’t believe everything Google has to say. They have a way of almost forcing you to do what they believe is the right way. Since their entire business model is based on making money, that alone should at least make you question the recommendation.

The truth is there’s no exact science to this. For any given advertiser, campaign, ad group & keyword the results may differ. Personally, I start nearly every new campaign on manual bidding to create a baseline. When I have that baseline I start testing other bidding options. There is most likely many that feel the complete opposite and there’s nothing wrong with that.

Enhanced CPC

Enhanced CPC is a box you can check along with manual CPC bidding. It’s not applicable to any other bidding type. For Google, this was the beginning of any automated bidding. Here’s what it looks like:

google ads enhanced cpc.png

Enhanced CPC uses manual bidding with a smart bidding layer on top of it. According to Google:

This strategy raises your manual bids in situations that seem more likely to lead to a sale or other conversion on your website, and lowers your bid for situations that seem less likely to lead to a conversion.

The major difference to keep in mind when using enhanced CPC is that Google can raise your bid above your maximum cost per click if they believe it to be more likely to convert. Again, you’ll see various answers on the results from this. From what I’ve seen most PPC managers have had good results with this and tend to use it. I know many that feel the opposite though. What’s the answer? Test.

Smart Bidding

There are a variety of bidding options across different campaign types that use smart bidding. While Google recommends Smart Bidding in virtually any case it’s not always the ideal solution. Even when you decide to implement or test smart bidding, there are a variety of choices and depending on the advertiser one might work better than another.

There are many reasons why Smart Bidding has an advantage over manual bidding, but that doesn’t always mean it performs better. If you’re using manual CPC bidding you have the ability to adjust bids based on the following: time of day, day of week, device, audience, location & demographic. In the Google Ads interface we have access to see the performance on each of those data points and choose to bid up, down or exclude.

However, Smart Bidding has those plus additional factors: location intent, ad characteristics, interface language, browser, operating system, actual search query, and depending on the type of campaign you’re running a few others. Even if we had access to every one of those options with manual bidding, it can get far too complex to manage. This is where artificial intelligence comes in. When a search is completed on Google, artificial intelligence will look at all of those factors and decide what your optimal bid should be. This is done every single time a search is made.

While that all seems amazing, one of the challenges artificial intelligence is up against is it relies on the data coming into the algorithm. A good rule of thumb is the more data you’re feeding it, the better it can determine your bid. Now the opposite can also be true. The less data your feeding it, the harder time it has determining your optimal bid. Even Google recommends at least 30 conversions over a month or longer to let the algorithm learn. What happens if you don’t do that much volume in a month? The algorithm still tries to determine your bid, but the likelihood of accuracy can go down.

Does this mean that if you don’t get 30 conversions within a month you should always use manual bidding? Although a good rule of thumb, not exactly. In fact we have two cases just within the last 30 days where we tested Smart Bidding on low volume campaigns and in both cases the results beat our manual bidding. In both cases we went out on a limb with this test.

Here’s one example:

smart bidding test.png

This one has an almost identical cost per conversion and we’ll continue to run this experiment until we have statistically significant results. What’s most interesting here is when you look at the cost per click and conversion rate. Both are nearly double. When they algorithm used all the factors is had for certain keyword searches, it determined a bid significantly higher than our bid would have a high conversion rate. They were right.

Here’s another:

I have plenty of examples of the opposite on either low or high volume campaigns, but what impresses me the most on these is how good the smart bidding is doing on such low volume. Does this mean we switched all our low volume campaigns to smart bidding? Nope. However, we are now going to run more similar tests for lower budget clients.

Now we’ll get into the different types of smart bidding.

Target CPA

This is likely your most common. With Target CPA you (the advertiser) determines the most you would like to pay for a conversion and the algorithm will try to match or beat your target CPA. Keep in mind this does not mean it will. It only means it will try.

Target CPA is a good starting point for many advertisers to test assuming your tracking conversions. It can work well for both lead generation and eCommerce. The best way to start testing this is a campaign that has historical performance data that will give you a baseline target CPA to start with. Typically you’ll want to start with the recommended Target CPA and let the algorithm learn. From there you can start to bring it down. However, Google does claim you can start a campaign from scratch with this bidding type and it will learn on the go.

Maximize Conversions

Maximize conversions uses your budget to try and get you the most conversions while spending your full daily budget. This can be great for campaigns that are either hitting their daily budget or campaigns that aren’t hitting their daily budget, but you would like them to even if it means a higher CPA.

While target CPA focuses mostly on hitting your target CPA, maximize conversions focuses more on hitting your daily budget while getting you the most conversions.

We don’t use this one as much, but we do use it for most clients if the campaign consistently hits our daily budgets.

Target ROAS (Return on ad spend)

Target ROAS can be a great option for eCommerce clients. Often times with eCommerce, ROAS is far more important the your cost per purchase. This smart bidding type works virtually the same as Target CPA, but instead of focusing on your cost per conversion column, it focuses on your conversion value divided by cost (ROAS).

Maximize Clicks

Maximize clicks just like it says, focuses on clicks. Mostly intended for branding advertisers who are looking for click volume ahead of any other metric, there are other use cases as well. Like maximize conversions, the algorithm will focus on spending your budget in full while getting you the most clicks.

A great case for using this bid type is if you aren’t tracking any conversions. Another way that we actually use quite often is when starting out a new campaign. Sometimes we’ll start out with maximize clicks because it may help speed up the process of getting clicks and spending our budget quickly. When we start out with manual CPC we are typically starting as low as possible and increasing bids until we get enough volume. Maximize clicks can help do that for us.

We highly recommend setting a manual bid cap when using this because it can increase your cost per click more than you’d like. While you should always keep a close eye when testing a new bid strategy, keep an extra close eye when testing maximize clicks.

Target Impression Share

Last, but not least target impression share. This is replacing target search page location as Google Ads is getting rid of average position anyway. The algorithm will set your bids with the goal of showing your ad on the absolute top of the page, on the top of the page, or anywhere on the page depending which option you choose.

Here’s what it looks like:

target impression share.png

First you would choose where on the page you want to show and then you choose the percent impression share you would like in that location. You also can set a CPC bid cap.

This can be a great bidding type for any client focused on branding and also can be good to test for brand campaigns with sales or lead goals that want to own the search results for their brand.

Conclusion

Overwhelming isn’t it? That’s what we’re here for at RelayPM. We highly recommend using an agency to manage your Google Ads account for this very reason. We’ve run hundreds of campaigns using every single bidding option available. This allows us to know which is best for each client to start with. We always test other bidding types though, whether it’s manual CPC or any type of smart bidding.

So which bidding type is right for you? The answer is all of them or just one of them. The only way to figure that out is to test and then keep testing. We love that Smart Bidding allows us to take one thing off of our plate so we can focus on another piece of the pay per click puzzle, but it’s not always the most efficient type.

Google Ads Smart Shopping: How Smart Are They?

What are smart shopping campaigns?

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On May 3, 2018 Google Ads announced a new type of shopping campaign, called Smart Shopping. Continuing on their path of releasing new products driven by machine learning, Smart Shopping campaigns allow you to hand over your shopping ad management to the machines. At the root of the product, what separates them the most from traditional shopping campaigns is that the ads don’t just run on Google search, they also run on Youtube, Google display network & gmail. As we continually see in eCommerce product touch points are increasing and this product takes advantage of that.

The second feature that separates Smart Shopping from traditional shopping campaigns is that they are fully automated. While there could have been an option for Google to expand shopping campaigns to enable the advertiser to choose to expand the networks the ads run on, they chose not to. We would love to see this feature added in the future.

The third feature is that because they also run on the display network, Google chose to include remarketing (with no opt out). The intention is that you no longer need to run Shopping and Remarketing campaigns, only Smart Shopping.

That all sounds pretty good doesn’t it?

What are the downsides to smart shopping campaigns?

Smart shopping campaigns are a black box. The advertiser gets no insight into whether the ads ran on search, display network or gmail. All you see is "cross-network” for placement data. There is also no audience data shared. How much of your budget is being spent on remarketing? No idea and no way to find out.

You cannot do any of the following with Smart Shopping campaigns:

  1. Add negative keywords

  2. Change location targeting (feed runs in country targeted in the merchant center)

  3. Adjust bids by device

  4. Change ad scheduling

  5. Do anything with audiences

What can the advertiser control?

The advertiser can still see product level performance data which is great, but there’s nothing you can do with the data. When you setup the campaign you get to choose your shopping feed, a budget and ad text. The default bidding type is maximize conversion value, but you can choose a target ROAS if you please.

Here is what the ad setup looks like:

diamond supply smart shopping.png

Can any advertiser run smart shopping campaigns?

The requirements to run Smart Shopping campaigns are:

  1. You must have conversion tracking installed and passing revenue data

  2. You must have the remarketing global site tag installed

  3. You must have at least 20 conversions over the last 45 days across existing shopping campaigns

  4. You need an audience lists of more than 100 users

How do smart shopping campaigns perform?

This is what we’ve all been waiting for isn’t it?

There are certain clients we have tested this on in the past 6 months. You have to be careful because smart shopping campaigns are shown before traditional shopping campaigns. Even though you technically can have both on at the same time, your traditional shopping campaigns will receive almost no impressions.

What we have seen is that half of the clients we’ve tested smart shopping with, we have continued to run long term. Here is one example:

smart shopping results.png

The results above are over a 30 day period. Traditional shopping campaigns ran for the first 15 and smart shopping for the ladder 15 days. As you can see the cost per conversion dropped from $47.60 to $19.06. What’s interesting is you see similar conversion rates, but the cost per click is dramatically lower on smart shopping. That’s because the Google display network is less expensive to run ads on.

We also have cases where the cost per conversion is almost the same, we have cases where the cost per conversion dropped the same amount, but we lost too much volume and we have cases where the cost per conversion increased. Just like any other advertising products in Google ads: test, test, test.

What else should you know?

The most difficult piece in a real controlled test between traditional shopping and smart shopping is the retargeting portion. At Relay PM, we all but phased out running display retargeting on Google for clients because we’ve seen much better performance with Facbeook ads. It’s difficult to factor that into the campaign performance. The analysis can get complex.

Conclusion

For many advertisers we highly recommend testing this feature. Be aware of all the pros and cons. Be aware it includes retargeting. Understand in most cases you’ll never be able to have a real controlled test. There are too many pieces of data Google doesn’t share.

As we’re able to bring in more data we’ll continue to update this article. Please feel free to message us with any questions.

If you’re looking to test shopping campaigns, let us know.

Google Ads Parallel Tracking: Does This Affect You?

What is Google Ads parallel tracking and does it affect your Adwords account?

Google has been sending out an email this week about the upcoming parallel tracking change to make sure everyone is prepared.  Since I've had multiple clients forward this email to me and ask about it, I wanted to explain what this is and which clients it affects.

Here is the email Google sent out:

Back in May this was first announced on the Google Ads blog.  A significant focus of Google in the past year is increasing page load time on mobile devices.  As web searches continue to shift towards mobile where internet speeds are lower Google has been focusing on doing what they can to increase page load times.  Accelerate Mobile Pages (AMP) is one way they have been working on this.  They have put together various data showing the impact each second of page load time has on conversion rate.  If you are interested in learning more Google built a mobile site speed tool that also estimates the revenue impact.

Beyond AMP another way they are increasing mobile page load time is parallel tracking.  This is strictly for advertisers that use a click measurement system.  This feature has been available for a few months, but as of October 30th all accounts will be automatically opted in.  The vast majority of Google ads advertisers are not using a click measurement system.  Most advertisers are using Google Analytics with Adwords auto-tagging where there is no tracking added manually.  Many use custom tracking for lead forms with Google's tracking template, but those are not affected by this either.  

If you are using a click measurement partner like a Sizmek, what happens when someone clicks your ad is that the there is a redirect which takes place.  This happens so fast in the background you will not actually see it.  When a user clicks the URL a page will load and redirect the user to your landing page.  The middle page that loads (which no one ever sees) records click information, but also can slow down the time it takes for the landing page to load.  Parallel tracking solves that issue by still allowing click trackers to work, but it loads the click tracking page at the exact same time the landing page loads instead of loading it before.

To get a better idea here are some visuals:

Most advertisers look like this:

Google ads parallel tracking view.png

If you're using a third-party click measurement system it might look like this:

With the upgraded parallel tracking, this then changes to this:

Google ads parallel tracking view 3.png

Check out the Adwords developer section here for more information if you are interested https://developers.google.com/adwords/api/docs/guides/click-tracking

For our clients that are using a click measurement partner, we have already reached out to you about this separately.  For those that have not heard from us, you are not affected by this.

If you are not a client of ours and would like to know if this affects you, send us a message with an existing Google Ads URL and we will tell you and can assist with next steps.

Top 3 Myths Expelled: Just Because Someone Works For Google Doesn't Mean They're A Google Ads Expert

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Let me start off by saying this blog article by no means is to bash Google reps. In many cases, we work with them on a weekly basis with our clients on specific questions. It's intended primarily to warn clients of the potential downsides to listening to everything an account representative from Google tells them. It's also intended to help us Google Ads managers out there that have had clients do one of the following:

1. Forward an email to them from Google stating something along the lines of "Google recommends we make this change, can you please implement it?"

2. The client has a call with Google outside of the Google ads manager's knowledge in which one of two things happens. One, the client approves Google making a recommended change. Two, the client implements it themselves. Days, weeks, or sometimes months later we discover the change and the negative effects that it had.

3. A Google Ads dedicated account rep threatening the account manager or the client that if they don't make a certain change, they will lose the dedicated support (yes this has happened to me)

4. Lose a client because Google has offered to build and manage their Google ads account for free while I'm charging a management fee (yes this has happened to me multiple times)

If you manage Google Ads accounts for other companies, if you haven't had any of those happen yet, don't worry you will soon enough. I completely understand the challenge this poses to our companies that advertise on Google.

For a potentially new or early stage client, they don't have a "trust" factor established yet. For a long-term client they do, but unless they have already experienced losing performance and money to a change Google made or recommended, who are they to question the very people that built the search engine on how to best advertise on their search engine?

That all seems to make sense, but unfortunately it is not the case. Let me dispel a few myths about your average Google account representative (they change their titles so much I'm not sure what they are called now).

Google ads myths.png

Myth 1: They work for Google, so they have access to information about the Google ads platform that the public doesn't

Truth: Google holds any secret information about their algorithm from the vast majority of their company, especially anyone that works directly with clients. If anything I've found that the public find out about platform changes before many of the Google ads account reps because we're actively seeking and following. I can guarantee if your paid search manager is keeping up with the latest releases and trends they know at least the same amounts as a Google ads account rep about the advertising platform.

Myth 2: Google ads representatives know and understand the Google ads platform and algorithm better than anyone because they work with it every day.

Truth: Most Google ads representatives, unless you are an account spending high 6-7 figures per month have less than 1-year experience with the platform. Of the dozens if not hundreds of Google Ads account reps I've worked with over the years, I've never come across a single one that not only ever managed a Google ads account on their own, but had any sort of marketing role prior to working at Google. Typically they have a sales background because that's technically what they are considered within Google.

Myth 3: Google Ads reps and Google Ads agencies have the same goal for their clients, long-term success and spending money.

Truth: This one I have some challenges with because theoretically, it should be true. Account managers or agencies need our clients to increase their spending on Google ads and be successful in order to continue working with us. It's in our best interest to optimize the account towards their ROAS or CPA goals. That is true. One would think Google would have the same intention, but time and time again all I've ever seen them caring about is spending more money on the platform regardless of what the conversion results are. In fact, there are many businesses that stopped advertising on Google and never will again because of the experience they had losing money, but because it was set up by Google Ads reps.

Google ads questions.png

Where is my evidence to back all of this up?

I've been managing Google Ads/Adwords clients for more than 12 years. I have fought this battle with Google and clients for that entire time. I've taken over clients where I cringe even to tell them the amount of money they lost because of what Google reps did to their account. I've lost clients for refusing to make changes Google recommended. Don't get me wrong, there are many terrible private paid search managers out there. In fact, I would argue less than 10% of us are actually really good at what we do, but that's another blog post.

Just last week I took over an account that had 4 campaigns set up by Google and run for 6 months. Three search only campaigns were all broad match keywords and one what was supposed to be "remarketing" audience was targeting a irrelevant in-market audience. Not one search term over a six month period because of the broad match setup was right for his business. Great, he didn't pay anything for a management fee. Unfortunately, he lost $10,000 over the time period.

Not everything they tell you will be wrong. I'm not here to say that. I just want perspectives to change when Google does recommend something. Maybe get a second opinion? At the very least be open to your pay per click manager not implementing a suggested change if they have a good reason not to. A good reason isn't "everything Google tells you to will waste money." If they tell you that you probably should find a new pay per click manager or agency.

A good reason would be something like:

"We prefer to rotate our ads evenly and decide on our own which is the best performer. There are many factors we use to determine the success of an ad, and while Google has improved their automated functionality for ad copy optimization, we often test this and believe our method works better."

I hope there are Google advertisers that read this and I save their PPC Manager and agency from having to argue this or even worse, give in and watch their client's results suffer. After all, would you let the IRS do your taxes?

If you have any questions about this don’t hesitate to message us. Just click on the Facebook messenger icon and we’ll respond. If you need a second opinion on a recommended change we will be happy to help. Most importantly, if Google setup your campaigns or is managing your account, please let us audit it.

Google Adwords Repeat Rate: Are You Under Reporting Conversions?

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What is a repeat rate and what does it mean to your business?

If you go into tools under measurement and go to the conversions sections of Google Adwords (new interface), you should see at least one conversion type (if you have this setup) and a bunch of columns.  One of those columns will say repeat rate.  Depending on how you setup your conversion pixel this can cause you to either over report conversions or under report conversions.

Let's step back a bit.  When you are in the process of creating a conversion in Google Adwords, the first step you will see will be the following:

 
repeat rate.png
 

You have two options here, every or one.  According to Google "if someone clicks your ad, then makes 3 purchases, AdWords will count 3 conversions."  If you choose one, according to Google "adwords counts only one conversion per ad click."  At Relay PM, when we setup Google Adwords conversion tracking for a client we assess the type of conversion we are tracking for each client.  If we are tracking purchases we will choose every and if we are tracking leads we will chose one.  The reason is that if someone makes multiple purchases on a website, each purchase has revenue attributed to it and thus should be counted as a conversion because each additional conversion does add more value.  With lead generation, if one person submits multiple leads there typically is no additional value to counting every time the lead is submitted.

Depending on what your conversion window is set to (30, 60, 90...) the repeat rate is based on that window.  If someone clicks on an ad and makes more than one purchase at any point during that conversion window, it is counted as a repeat.  Same goes for submitting leads.  When you are looking at the repeat column in the conversion section in Google Adwords you will see the average number of conversions submitted per user based on whatever date range you are currently viewing.  Keep in mind no matter which option you choose, every or one, the repeat column still shows the average number of conversions per click or interaction, but they will only be included in the Adwords conversion columns if you chose every.

Now, there are potential issues to using the every conversion option that we have seen.  Users can bookmark a purchase or order confirmation page and visit that page again because the page might load too slow and the user tries to reload the page, or the user hits the back button to visit the page twice.  We have also seen unknown technical issues causing the conversion pixel to fire multiple times for the same user.  Any one of these options are fairly common.  Fortunately there is a way around this.  You can add an order ID to your conversion tracking pixel.  If Google Adwords sees two conversions submitted with the same order ID they will only count one.

Depending on if you are using a conversion pixel from the new Adwords interface or the old Adwords interface you can see the code to implement here: https://support.google.com/adwords/answer/6386790?co=ADWORDS.IsAWNCustomer%3Dtrue&hl=en&oco=0  Order ID's will not be used in any Adwords reporting.  

If you have any questions on this topic please let us know.

Google Says My Bid Is Below First Page Estimate, What Does That Mean?

For the past couple years clients' have been logging into their Google Adwords account and then asking us "why are our keywords below first page bid?"  While this estimate has been around since 2008 or 2009, at some point it was added to the status column and has resulted in it being much more visible.

Typically my response has been: "Ignore That.  It doesn't really mean anything."  Although I sort of believe that to be true, I thought I would take some time to put together a slightly more satisfying response.

Here is what Google says about the first page bid estimate:

This estimate approximates what cost-per-click (CPC) bid is needed for your ad to show anywhere on the first page of search results when a search query exactly matches your keyword. Your ad can still appear if your bid does not meet this estimate, but it's less likely to appear on the first page of search results.

This is actually a quite perfect response.  Let me elaborate on a couple of the most important pieces of this response.

when a search query exactly matches your keyword

Let's say you are bidding $1.50 on "red shoes," but the first page bid estimate is $2.50. You are much more likely to show on the first page of results when the user's query is "where to buy red shoes", so if you want to increase your chances of showing for "red shoes" you should increase your bid.

Your ad can still appear... but it's less likely on the first page

After digging into this one further, I was proven incorrect on something I've been telling clients for the past couple years.  For those who have been doing this for 10+ years like me, you will remember it was not uncommon to see an average position of 32, 47, or even higher in the past.  Google got rid of that years ago so now at first glance all pages appear to have the exact same ads as page 1.  Upon further review and test searches, I discovered that every now and then you'll see a few ads after page 1 that have not shown on page 1 at all. 

So, as we're managing your account, how do we use this information?

Depending on the goal, there are a couple of ways we use this.  When we first launch an account or keywords, we often have to repeatedly bring keywords up to the first page bid estimate as Google adjusts the initial quality score.  If we are managing an account and we need more traffic volume, we typically start with doing this as a quick method. We can also use the estimates to our advantage because they give us an indication of which keywords have more volume potential and serve as a quick way to identify "high quality" keywords that we might want more volume from.  While we also consider impression share and average position, first page bid estimates are a simpler value to look at.

The final way, which is very often an indicator of a bigger issue, is low quality score.  If it's a big enough issue within the account, we might look at ways to improve overall quality score so that Google drops the first page bid estimate down and we are eligible for more auctions without increasing our bid.

Below is an example.  This particular keyword as a $15 bid with a $16.90 recommended first page bid, but the keyword has an average position of 2.1.  Seems pretty good right?  If you look to the far right though you see that we are losing 26.16% impression share to ad rank.  That means 26.16% of the time the keyword is searched, we aren't eligible to show.  Increasing the bid to the first page bid estimate increases the ads chances of showing when the particular keyword is searched.

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One final point to note.  If the campaign is limited by budget, we almost never increase bids above first page estimates.  What that causes is us to pay more money per click and get less clicks within our budget.