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Keep Your Partners Close, But Your Competitors Closer

Published: June 3, 2015

Author: Kimberly Cheung

When companies go through growing pains during its early stages (particularly when venturing into a new space), there are many factors that come into play in how a company’s SEM program may perform. This includes, but isn’t limited to, things like new landing page production affecting conversion rates or recent press affecting search volume.
While it’s important to continually test and optimize your own accounts, it’s a good idea to keep in mind that your competitors are also testing and optimizing at the same time. The competitive space can instantaneously change.
One thing to look for is increasing CPCs and lower positions over a period of time. Generally, CPCs and average positions should have an inverse relationship – you should be paying less if your ad shows in a lower position. It’s also worth noting that competitive bidding doesn’t only affect Branded or Competitor terms; your competitors are probably bidding on the same non-branded keywords as you and can easily affect your non-branded campaigns if they choose to be more aggressive there. Below is an example of average position drops and CPC increases for a non-branded campaign.
The thing about keeping an eye on CPCs and average positions is that it can happen very quickly or very gradually – sometimes it can simply look like normal performance variance when you look at it week-to-week. Stepping back to take a broader look at your data every once in a while can really help.
After you determine the point at which performance started to dip based on your CPC and Avg Pos. data, it’s definitely worth looking into Auction Insights for your ad groups.
Comparing auction insights data before and after the performance dip can tell you whether or not a competitor is increasing bids or even if there is a new competitor in the space. Below you’ll find the auction insights data for the previous non-branded campaign before and after the performance dip. Domain 1 has increased their average position over time, and has been showing on the top of the page for a much greater percentage than previously.
This data, paired with the increase in CPCs and decrease in average position, suggests that the space has gotten more competitive, and that Domain 1 is probably bidding much higher than previously.
Keeping an eye out and being aware of what your competitors do may not bring you cheaper leads, but will definitely paint a more complete picture of why your accounts may be suffering in performance.

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