Google introduces Bid Simulator tool for AdWords

The Bid Simulator is a new tool that has recently been introduced by Google as part of their new AdWords management interface. The tool can be used by advertisers to view the potential impact of a different bid level within the advertising results for each search term being used, but what value does it really offer?

Using data from the past 7 days, the Bid Simulator tool re-calculates the number of impressions for which an advert could have shown had the advertiser chosen a different maximum CPC, as well as how many clicks the ad could have received for those impressions and how much those clicks could have cost.

According to Google, the new feature provides “increased transparency into the AdWords auction and provides the insight to make more informed bidding decisions about advertising objectives”. The figures are, of course, estimates based on expected behaviour and recent trends, and the initial feedback from professional PPC marketers has been mostly negative about this new tool’s real intentions.

The way in which the tool regularly indicates the benefits of an increase of bid levels has been treated with wide-spread scepticism. It often shows that raising bid levels by large amounts can increase the number of impressions (which doesn’t necessarily correspond to a rise in clickthrough rates). So it would seem to be more beneficial to focus upon improving quality scores to lower cost-per-clicks and improving advert copy, rather than just manipulating bids levels to increase impressions.

A Google spokesman stated, when questioned about the high frequency of raising bid levels within the tool, that “shown bids are not recommendations but are simulations for various bids to give insight to the advertiser. The feature aims to show missed opportunity”. Also that “past performances cannot guarantee future results so the simulations should not be taken as exact, they are simply predictions”.

It’s an important point that an advertiser should keep in mind when using the Bid Simulator so that the predictions need to be viewed with a pinch of salt, like most of Google’s PPC projections. In other words, rather than being recommendations, they are just projection models with a large frequency of incredibly high simulated bids.

Professional PPC marketers have the impression that Google created this tool to take advantage of ‘rookies’ and other irregular users of AdWords by encouraging advertisers to bid highly in order to simply make more money from their clicks – so not encouraging the creation of highly optimised campaigns, or the reduction of cost-per-clicks through improved quality scores.

Thus, it is suspected that many full-time search marketers will find the Bid Simulator will only demonstrate the projection that they really don’t want to pay any more than they already are, and so the focus on bid management needs to be placed in different areas.

If you’d like to know more about this new bid management tool and the implications for your AdWords management, please contact us for further information.

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