In the first of what might come to be a semi regular feature on Blogstorm I thought it might be interesting to look at the fun tactics people have used to gain a competitive edge in the past.
The first one was something I used to do every day back in the era (2003-2005?) when the Overture system was powering PPC ads on Yahoo.
The system showed exactly what all your competitors were bidding so it was very easy to get in a daily bidding war. We were converting better than anybody else in the industry and had the tracking systems to prove it. We knew that 80p was the maximum CPC before we started to make a loss.
Thanks to the bidding war our competitors (4 of them) were always trying to outdo each other at around £1.60 per click – a level where they were clearly losing money. Their budgets used to run out by mid afternoon most days.
Overture bids were quite straightforward – you paid 1 penny above the advertiser below you. So if you bid £1.60 and the person below you was bidding £1.10 then your actual CPC would be £1.11.
Clearly it was pretty easy to manipulate this system by bidding 1 penny below our competitors who were all bidding way too high because they didn’t have the software in place to track ROI.
- Competitor 1 – Bid £1.80, actual CPC £1.76
- Competitor 2 – Bid £1.75, actual CPC £1.74
- Competitor 3 – Bid £1.73, actual CPC £1.61
- Competitor 4 – Bid £1.60, actual CPC £1.60
- My company – Bid £1.59, actual CPC £0.21
- Competitor 5 – Bid £0.20, actual CPC £0.20
Of course it was very important to keep in top of this strategy and we used to log in at least twice a day to make it was still running according to plan. By mid afternoon most of our competitors had run out of budget and we were top with 21p CPC.
Pretty easy way to make money.