I see this question becoming more popular as the number new people that learn Adwords account management increses. It’s a good question, with no straight and simple solution. The answer comes easily to those who understand well the business and product for which they advertise. Tihs is mostly a question of strategy, and Strategy is defined as: a plan of action or policy designed to achieve a major or overall aim. Depending on the overall aim you wish to achive, this can be a good thing or a bad thing. I will try to show you a few cases when it’s a good idea and a few cases where it’s a bad idea. Of course there will be other cases I can’t cover, if you have a good example please share it in the comments below!

Will I get a higher CTR if I advertise on a higher ad spot?
IF the CTR is higher on a higher ad spot, does this mean I will have a higher Quality score?
When it’s a good idea to start a new campaign with high max CPC bids?
When it’s a bad idea to start a new campaign with high max CPC bids?

Will I get a higher CTR if I advertise on a higher ad spot?

Yes, you will get a higher CTR if you advertise on a higher ad spot. The higher the ad spot, the more easy your ads can be noticed by the people doing searches – and in consequence they will get more clicks. CTR is an important signal when Adwords calculates the quality score, which in it’s turn, is factored in the final price you pay per click. But be careful because Google knows about this fact, and they don’t want to favor advertisers who afford to pay more. They want to favor quality and relevance. To do this, alongside CTR they take a few other things in consideration when calculating quality score – position and competitor performance.

IF the CTR is higher on a higher ad spot, does this mean I will have a higher Quality score?

No. Not Necessarily. Usually people know that CTR is an important signal when Adwords calculates the quality score – but they refer to the relative CTR, not the absolute value. Your absolute value may be 15%. But Google does not take into consideration this value alone. They also take into consideration the position, and competitor’s performance on the same position. So, if your competitor is having 14% CTR on the same position – the difference between yours 15% and competitors 14% is what matters to Google. So, the higher the position, the more clear the difference between you and your competitors. Now let’s see how you could use this to your advantage!

When it’s a good idea to start a new campaign with high max CPC bids?

When you know your product and website is a way better than your competitors. With high CPC’s you will feel the burden of any problem amplified. For example, if you have a problem on a particular browser and the website crashes. Starting with high CPC’s before solving the problem will burn you very high.

When you are absolutely sure you have a way better (not in any particular order):

- product than your competitor
- adwords account setup – adcopy, landing pages, sitelinks, review extension… everything
- user experience
- stable and fast loading website
- reasons for your competitors to stop searching for alternatives to your offer
- system for users to make easy reviews and recommendations
- remarketing and a system to re-engage the visitors easily by social media, or other channels
- when you’re using only exact match keywords (at least at the beginig)
- targeting local markets (the higher the market the more complicated things get)

This does not mean everything must be perfect. There are very few websites / adwords accounts close to perfect. And they get there with a lot of time invested, and not from the start. What I mean is that it has to be better than what your current comptitors have. And if you have budget limitations, advertise only for a couple of hours – then expand on the areas with more potential.

When it’s a bad idea to start a new campaign with high max CPC bids?

When your competitor has all the advantages mentioned above. Plus, when you:

- plan to have a lot of volume incoming on broad keywords
- when you advertise in “informative” keywords (oposed to keywords that are action oriented)
- when you offer similar products with your competitors

In other words, if you don’t have a very good system in place to monetize and also to satisfy your customers, then starting with high bids it’s a very bad idea. Probably you won’t be able to sustain that price even if CTR is amazing. Maybe people will be abandoning your site as bounces, maybe they won’t feel that the site is trustworthy and so on.

As a general rule, I always make sure I have all the process in the back set up as best as I can, then I start with hgih bids.

So the question: do you have everything in place to get most of your visitors and to satisfy their needs? If yes, then starting with high bids it’s probably a good idea. If not, starting with lower bids might be an alternative, even though I don’t recommend it.