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A Serious Look at Paid Search Marketing Strategies, Tactics & Tools

Why It’s Called First Page Bid *Estimate*

By Craig Danuloff | March 25, 2009

Because you can bid less and still have your ads shown on the first page.

In my experience it isn’t unusual to see the following:

fpbestimate

A Portion of The Keyword Report from ClickEquations

On the top line we see a keyword with a FPBE of $1.93, a MaxCPC of $1.50, and an AvePos of 2.82 (clearly on the first page). And we see a healthy impression count. It seems like something doesn’t add up.

I can only surmise (I have no direct information from Google on this) that this proves it really is an estimate. The actual bid required to be on the first page varies on a query-by-query basis. (Our post on the Quality Score discount or penalty.)

This makes sense given what we now know about how Ad Rank is calculated and the fact this is done in real-time for every query. So for each search Google:

  1. Calculates the Quality Score of each bidder, then
  2. Calculates their Ad Rank to determine position, then
  3. Determines price based on the Ad-Rank and Quality Score, then
  4. Figures out if any ads are eligible to get a Top Position, then sometimes
  5. Decides how many ads they want to show

So there are two chances for your ad to not appear on the first page:

  1. Your Ad Rank is too low to earn a spot on the first page.
    This (again) is Bid x Quality Score so you have to variables to work on to fix this.
  2. Google limits the number of ads they display, even though there are more bidders.

What This Means For Bidding and First Page Bid Estimate
You shouldn’t feel compelled to bid all the way up to or past the FPBE number. Check your Average Position, and Impression counts before making a decision.

The effect of seeing the First Page Bid Estimate is to feel compelled to raise your bid to hit it – at least. That might be a good idea, it might not, and it may not be necessary (assuming your goal is a page 1 appearance with 100% Impression Share).

Test the impact of bids around the FPBE on both your position and impression count – it’s possible you’re below but losing very few impressions.

What Else It Means
Google is still hiding too much from advertisers.

The move to First Page Bid Estimate was a positive one, but we’re still not told:

  • How they decide how many ads to show for any given query,
  • How they establish minimum bids for a particular query (the price the lowest appearing person pays)
  • How they determine the bid requirements of a Top Position (and what it is for any particular keyword or query)
  • And our only clue about any of this – Impression Share – is still available at the Campaign Level only.

We’re left guessing and testing when we’re rather be considering and deciding.

NOTE: This is the 2nd post in a series. The first one is here.

Related posts:

  1. Google Adwords First Page Bid Estimates Report While Google’s Adwords Quality Score gets...
  2. Quality Score and First Page Bid – Now in ClickEquations We’re pleased to announce that Google...
  3. The Secret Truth Series #3 – They’re Called Ad Groups This series of blog posts goes...
  4. Surprise: Your Bid Doesn’t Determine Your Cost-Per-Click The fall-out from Google’s Hal Varian...
  5. Ad-Rank Is Under Appeciated After all the recent attention on...
  6. Chapter 5 – The Impact of Quality Score This post is from the upcoming...
  7. Quality Score and Bid To Position A lot of advertisers have keywords...

Tagged as: Bidding, First Page Bid

  • CScott - email subject lines
    Do you think the FPBE is useful to the advertiser? Or, is it there mostly to prod advertisers to increase their bids chasing the elusive first page?
  • Does anyone have any insight to this situation regarding FPBE?

    22 properly themed keywords in one adgroup, it is a new account, campaign and adgroup so history should not play a big role in this situation. All keywords are at a QS of 7 but the FPBE ranges from $0.05 to $20.00 for very similar keywords. All keywords also have KW lvl URLs pointing to the same landing page.

    What do people think about this? Is the FPBE being affected by competetiveness of each keyword? Does the landing page relevance have anything to do with it at the keyword level (even though UI does not signal lander as a problem)? Any fresh ideas, anyone else run into this problem?

    Thanks!
  • Good Article - I am trying to optimize a campaign for a client and they had another company guarantee 1-3 position. My ads are 10/10 in quality and I have been increasing the bid and still don't get 1-3 position.

    Is it better to have the position option turned on - would that help?
  • much needed post. What do you think about a search term that never has any ads and has a 30 cent FPBE? Is it possible to bid .01 cent and get it? Maybe the estimate is 5 cents or something. My question is basically this: Does google force advertisers to bid a certain amount for keywords that have zero or close to zero competition. Maybe this is an extreme example, but I think anyone reading this knows what I'm saying. BASICALLY WHAT IS THE LOWEST BIDS PEOPLE HAVE BEEN ABLE TO REGULARLY ACHIEVE RELATIVE TO THE FPBE FOR THE KEYWORD TARGETED?
  • From SMX Advanced in Seattle a similar question was posted and here is a quick summary to the answer given (by a Google employee).

    If there is a category or search query that has almost no competitors than when you attempt to bid on this search query your ad may not show up either. The reason for this is relevance to the user and good user experience. For example, the search query "what year was world war I?" does not have any paid search ads, it doesn't because Google knows that this query is more researched based. To get a paid result on this query you would have to prove to Google that your paid search result could drive traffic and be relevant for users.

    If there are close to zero competitors but still some, then it might be that these advertisers have historical data and high CTR's that have allowed them to be serving for a particular query.

    In regards to your question, I don't really keep too close of track on bid in relation to FPBE, I'm more interested in FPBE and my position.
  • Google sets the minimum required bid for any keyword - and usually not at 0.01. They do this for keywords that have no paid ads, and for those with lots of competitors when they only show a small number of ads. They always set the minimum using a formula known only to them. So the answer it it varies depending on what Google wants to set the price at for that keyword.
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