Google's Bid Simulator Tool – Check Under the Hood Before Buying

By Tad Miller | Aug 17, 2009
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Amanda Chaney recently reported on Google Adwords introduction of its new Bid Simulator Tool and how it works.  The idea of it is simple.  See how many clicks and impressions you missed because you didn’t bid high enough on a keyword…  In theory that sounds great, it’s actual transparency into the ad auction never seen before.

But my feeling about it, is that it’s a tool to increase Costs Per Click for Google.  It’s a great “Carrot and Stick” trick to get you to raise bids.  Visibly seeing how much it will take to max out impressions for that keyword is a great way to incentivize advertisers to raise bids.

The problem as I see it is that this tool should only be used for one third of your keywords (Exact Match Only).  We subscribe to the philosophy that you need to be utilizing all three keyword match types for each of your keywords:

  • Broad Match – Allows your ad to show on similar phrases and relevant variations
  • Phrase Match – Allows your ad to show for searches that match the exact phrase
  • Exact Match – Allows your ad to show for searches that match the exact phrase exclusively

Using the keyword tool for Exact match keywords to see what bid price can do to improve clicks and impressions only makes sense and the bid simulator will be a valuable reference for Exact match keywords.

But when it comes to Phrase match and Broad match keywords you need to hold off on raising your bids.  Ask yourself what exactly am I raising bids on?  The search queries that trigger your Broad and Phrase match are not Exact matches, so theoretically you are not raising your bids on those keywords but you are raising your bids on ALL of the Broad and Phrase matches that Google can apply to that keyword.  This includes the dreaded “Expanded Broad Match” keyword match type that most advertisers don’t even know exists.

Just like any automotive purchase, you need to “Look Under the Hood” to see exactly what you are buying with your increased bid.  Adwords actually gives you the transparency into all of the Broad and Phrase matches for each keyword through its new interface.  You can easily see what these keywords are and make a determination on their worth.

From the Keywords Tab, Select the Broad or Phrase Match keyword you are thinking about raising bids on, then click on the drop down labeled “See Search Terms” and click”Selected”.  Doing this will give you all of the keywords matched to that Broad or Phrase match keyword over the time period you have selected.  We recommend looking at a very long time period to get a real idea about the kind of keywords you are matching to.  Once you get the keyword list you will more than likely want to add lots of Negative keywords and you can do it easily from the keyword list.

If the list has good keywords you should add them to your keyword list – again using all three keyword match types (especially Exact match).

If you increase your bid for Broad or Phrase match keywords you are increasing your bid for all the bad keyword matching possibilities as well as the good ones. Chances are the “good keywords” that Broad and Phrase match are delivering on are much more affordable as Exact match keywords.  Sadly, Google’s video showing how to use the Bid Simulator Tool looks like it’s from of one of Google’s own Adwords Campaigns and they aren’t even doing this…They should call us.

We are essentially talking about “Keyword Impression Shares” with the data provided by the Adwords Bid Simulator tool.  When Google talks about Impression Shares for Campaigns it always uses the Exact Match Impression share as their measurement.  They know that measuring impression share on all of the Broad and Phrase matching possibilities isn’t a good measurement – because of all the irrelevant traffic that they can deliver.  The same should apply with Keyword Impression Shares measured by the Bid Simulator.

Exact match “Keyword” Impression Share is really the only reliable measurement on Google Adwords.

In conclusion, check your Broad and Phrase matches before you use the Bid Simulator to raise bids on them. Add Negative keywords for the bad keyword matches, and add good keywords that you matched to with all three match types (or at a minimum add them just as Exact Matches).  Give it about 7 more days with the new negatives and new keywords in all the match types.  Check the bid simulator and the keyword matches again and make a judgment on if its still worth your time to raise bids on the Broad and Phrase match keywords.

Lather, Rinse and Repeat…

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