The Penny Bid -You Get What You Pay For!

You’ve got great keywords, killer ad copy and an awesome website so you should be converting like crazy right? Well it may come down to how competitively you are bidding. I have encountered some truly amazing ad campaigns where the advertiser is bidding one cent on every keyword. Many online marketers bid this way for specific reasons; some may only be seeking traffic volume while others may actually want conversion. Let us take a moment to analyze the pros and cons of the penny bid.

7Search.com is ranked among the best and most affordable paid search engines allowing its advertisers to bid as low as one cent on any available keyword, but the question is should they? The most obvious positive for bidding a penny is the opportunity to save money. Spending less on each click allows advertisers to keep their budget under control. Additionally, bidding lower stretches ones budget further enabling their ad to remain in rotation much longer. Of course the longer an ad runs the more opportunity it has to convert.

While saving money is always great, advertisers should be careful not to lose focus of the overall goal, which is to generate sales/conversions. This is usually where the negative side of penny bidding appears. Even when advertising on PPC networks that allow bidding as low as one cent, it may not be the best strategy when you consider ad placement. As you would expect, rock-bottom bidding will place your ad in rock-bottom position on search engine result pages. In most cases this will prevent your ad from receiving the exposure it needs to obtain a sufficient amount of clicks necessary for achieving a profitable ROI.

In addition to receiving far less clicks and consequently no conversions, another negative to penny bids is the fact that your ad becomes a prime candidate for untargeted clicks. Ads that appear extremely low in search results tend to receive clicks from web surfers that are merely ‘browsing” and not necessarily motivated or looking to take any immediate action. Penny bids will likely cause an ad to appear as low as the second, third or even fourth page, if not further. Ask yourself how often do you personally visit search results beyond the first page. If you are like most people you never make it that far and if you do it’s only because there is no real sense of urgency attached to your search.

Lastly, people are not as trusting of ads shown beyond the first page. There is usually an impression of importance or higher quality that web surfers attach to first page listings. Penny bids may cause an ad to miss out on a highly motivated batch of consumer traffic that’s more inclined to commit to buy/sign-up immediately.

In the end, bidding low may save your budget but it may also cause you to lose something more important, like sales. If your campaigns have not been living up to their true potential and you are using the penny bid strategy it may be time to raise the bar on your bids and finally get your listings in the game.