The Google Grants $1.00 keyword bid limit has taken some flak in the past. The main complaint is that if you’re limited to a $1.00 bid, you can’t compete for a position on the first page against advertisers bidding above $1.00. As a result, your reach is severely limited, making it hard for charities to develop meaningful traffic.
The Google Grants team addressed this issue in a blog post, saying that the $1.00 max bid “should be sufficient for most keywords if you are maintaining a high enough click through rate (CTR)”.
With some Google grantees saying it’s an issue and Google saying it’s not, it can be hard to understand which point of view is correct. So, we set out to find out the answer and use real data to validate the conclusions. As it turns out, Google is right on this one, and in almost all cases the $1.00 maximum bid should not affect Google Grants users.
in almost all cases the $1.00 maximum bid should not affect Google Grants users
Google Grants Keywords Data
To verify the impact of the $1.00 keyword bid limit, we conducted a study of 7,087 keywords that generated 420,000 clicks and 15 million impressions for charities in the health, education, social service, community, and youth development sectors.
Most Keyword Bid Estimates Are Below $1.00
Using Google’s Keyword Tool, we found that 83% of keywords in the study had a first page bid estimate below $1.00. Of the 17% of keywords with estimates above $1.00, the majority of them are within close range of the limit. In fact, over 92% of all keywords cost less than $1.50.
Actual Cost Per Click Less Than $1.00
We compared keywords with bid estimates less than $1.00 versus those with estimates over $1.00. What was most interesting was that for keywords with estimates above $1.00, average CPC is well within the limit at $0.82 despite a top bid estimate of $1.75 and first page bid estimate of $1.85. Also, those keywords actually generated more impressions on average (3,007 vs. 1,844) than their cheaper counterparts, indicating that the keywords are still getting traffic despite the $1.00 limit, and that they aren’t being outbid to the point of irrelevancy.
Most Keywords Make It To First Page
In Google AdWords, an average position of 1-8 means that your keywords will generally be seen on the first page of search results. Using an average position of 8 as a cutoff for evaluting keywords showed that 97.84% pass this test.
Analyzing the data from thousands of keywords and clicks supports the conclusion that the performance of Google Grants campaigns aren’t heavily affected by $1.00 maximum bids. In the majority of cases, for-profit companies won’t be competing on the same keywords as non-profits because they don’t generate revenue from it. As a result, demand is less and therefore price is less. The fact that 83% of 7,087 active keywords were estimated below $1.00 and that the average CPC for those estimated above $1.00 was $0.82 supports this statement.
If you’re still finding problems being outbid on keywords, I would highly recommend reading this article on Battling Below First Page Bid Status.