Official Launch of Google AdWords Bid Simulator

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Whether you’re a novice or expert advertiser with Google AdWords, the ability to predict how many impressions, clicks, and how different bid prices would’ve affected your search ad performance, has always been informed speculation and artful guesswork. The latest feature of the Google AdWords “new interface” which Google debuted in a webinar in June, called the bid simulator, brings clarity and Google’s data-driven formulas to hypotheses about AdWords bid changes. Although the bid simulator can’t predict the future, the bid simulator will show you the potential impact of your bid on your advertising results. It essentially allows you to observe what could’ve happened if you had set different keyword-level bids, according to Google’s best estimates, which are well informed.

How The Bid Simulator Works

By using data from the past seven days, the simulator re-calculates the number of impressions your ad could’ve gotten choosing a different maximum CPC. It also shows you how many clicks your ad would’ve gotten, had you chosen a different maximum CPC, and also how much those clicks would’ve cost (or how much those who clicked would’ve cost). This feature provides “increased transparency” into the AdWords auction, while also giving advertisers more insight into making more knowledgeable bidding decisions. It also simplifies the bidding process while enabling a calculation of incremental cost per click.

How Can This Help Me As An Advertiser?

This simulator is designed to help advertisers define the trade-off between click volume and cost, which in turn, should allow you to more confidently answer the following questions:
  • How can I increase the traffic to my website, without raising my costs too much?
  • For which keywords should I alter my spend for?
While it’s not possible to factor bid simulator info into every bid decision you make in AdWords, it’s added information worth reviewing for high traffic keywords.

If You Max Out Your Daily AdWords Budgets, This Tool Is Not For You

The new AdWords bid simulator only works if you are not hitting daily budgets. Per Google, in order to generate simulations for budget-constrained campaigns, the algorithm needs to simulate both budget data and bid data, and at this time they do not have the capability to factor budget information into the permutations.

Bid Simulator Results Do Vary (Greatly) By Match Type

The bid simulator factors into the equation your keyword’s match type, and provides different results for broad, phrase, exact match keywords in your search campaigns. More so than other match types, bid simulator results can change dramatically with bid changes for broad match keywords.  Per Google, even for a keyword with a very high average position such as 1.1, increasing a bid could make a significant difference in volume.

Summary Points About Bid Simulator Functionality:

  • This feature is currently available for Google.com and the Google Search Network
  • In order to get simulations, your keywords must meet the adequate thresholds of data
  • The simulation will not provide data if your account uses these features:
    • Conversion Optimizer
    • Ad Scheduling
    • Budget Optimizer
    • Position Preference
    • Campaign budget limits where maximums are reached
  • The planned future for the simulator includes:
    • Simulation at the ad group and campaign level
    • Compatibility with AdWords Editor, API, AdWords 3.0, Conversion Optimizer, Ad Scheduling, and budget-constrained advertisers.
By Jerrold Burke Paid Search Analyst For more information on this feature you can visit: http://www.youtube.com/watch?v=b-FzSL66Zjg or http://adwords.google.com/support/aw/bin/topic.py?hl=en&topic=22217 Sources: http://adwords.blogspot.com/2009/08/bid-like-pro-with-bid-simulator.html and http://www.youtube.com/watch?v=b-FzSL66Zjg

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