The Google Bid Gap – Sometimes Less Is More

Google allows up to three AdSense ad units (plus one adlink and one Google search box) on a website at any one time. In most cases, it is best to run the maximum three – the more ads you show, the higher the chance it will catch a reader’s eye. However, there are times when having less ads could make you more money. This is caused by something known as the Google Bid Gap.

What Is The Bid Gap

The bid gap is the difference in price between the Google ads. The top spot always cost the most, with each lower position costing less and less. The gaps between the top four bids are normally very close. However, once you get pass that, the gap can widen substantially. For example, the bids on a high paying keyword might be $5.00, $4.99, $4.98 and $4.97 for the top 4 spots, and then 10 cents for the fifth spot. There is only a 1-cent gap between positions 1-4 but a $4.87 gap between positions 4-5.

If you were running the maximum number of Google ads to target the above, you would have one ad block with the high paying bids and two ad blocks with much lower bids. Chances are, a reader would click one of the lower paying ads because there’s more of them. In this kind of situation, it would be to your advantage to reduce the number of Google ads to get rid of the high bid gap.

Adwords advertisers know that most Google ad sizes display a maximum number of four ads. Since they know some sites only run one Google ad, competition for the first four spots of the first banner can be quite high. Bids on the second set of four could be substantially lower and the third ad is normally where the MFA (Made for AdSense) sites play in.

When Less Could Be More

Reducing the number of AdSense ads on a page will give you more per click. However, it will reduce the total number of clicks you will get because of fewer ads. You will have to monitor ad performance to make sure the total revenue continues to go up. Generally, when there is a high bid gaps between one set of ads to another, it is best to reduce the number of ads.

There is no way to figure what the bid gaps are in your Google Ads. For evil reasons, Google does not release this information. The best way to monitor the situation is to set up custom channels for each ad units and monitor their performance. If one ad unit’s eCPM is significantly lower than another unit with a similar click rate, then it’s an indication of a huge bid gap. Remove that ad and see if the extra clicks to the remaining ads makes up for the lost of revenue. If the gap is great enough, it should do that and more. You can also try using the competitive ad filter to kill off the MFA sites.

It’s All About Tweaking

I have said this many times but it bears repeating. Google AdSense is all about tweaking. Google would like you to believe it’s a set it and forget it type of deal but it’s not. In order to extract maximum AdSense dollars, you have to tweak everything and monitor factors like the bid gap.


94 thoughts on “The Google Bid Gap – Sometimes Less Is More”

  1. Nathan says:

    I wonder what the bid for Agloco is at right now 😈

    1. Right when agloco came out i googled it and went to the paid adverting pages. A lady had made a made-for-aff site for agloco and was buying the adwords and signing people up. i sent her an email and asked how many she had signed up and she said she had already got about 50 direct referrals the first week it came out. i don’t know how much she paid though

      1. The “use less ads to make more money” is definitely an interesting concept. But it definitely takes a lot of time to research and sort out through channels, etc.

        Very interesting info though, thanks John.

        Thank you,
        Wesley…
        http://DVDRentalForums.com

        1. Jane May says:

          Yeah, I agree. It will take a lot of tweaking to find what works for your readers.

          1. I’m one of those in the “I-put-AdSense-code-on-my-site-but-haven’t-tweeked-it”
            people. I really need to site down and play with my ads to actually generate some income!

          2. Gary Lee says:

            the agloco kws are starting to be too expensive with poor signup results. I’ve had the same conversion page up and the numbers have been going down with the costs going up . . . not usually a good sign. The good thing is I’ve found other ways to grow my networks!

          3. I guess playing around with the ads is a must if we want to maximize the revenue from it. That’s what people who are in Google adsense are aiming more. It’s just the idea of finding the right mix.

          4. HMTKSteve says:

            I focus on ad blocks that bring in the clicks. It is a balancing act though. Sometimes I big block brings in less clicks but more expensive ones while a small block brings in more less expensive clicks.

          5. Jane May says:

            Thats what we found out about the big and small blocks…It is all about balance until you find how to maximize profits.

  2. Those Google geniuses are pretty tricky. It can get pretty ugly having too many Google ads too.

    1. Too many ads makes the site look uglier, and potential to generate more revenue. Too little makes it nicer/ less cluttered, yet potential to earn decreases as well. It is a tough mix and match.

  3. Pitumbo says:

    Very helpful take on a common problem (increasing revenue from adsense). If I ever get any traffic to my sites, I will make sure to remember this post! πŸ˜†

    1. Jane May says:

      Hold some contests…i.e. give away some Wii like John is doing πŸ™‚

      1. I should hold a contest on who can set up my ads the best!

        That way, I can keep concentrating on commenting! πŸ˜‰

        1. HMTKSteve says:

          Can I use my adcode? πŸ˜€

        2. Jane May says:

          hmmmmm, maybe you should hold off on contests then πŸ˜›

    2. You should bookmark this page as well, then!

  4. Ed Lau says:

    Oooooh…so THAT’s why…

    1. Just what I was thinking. I’ve had some clicks worth almost $2 and others go for only $0.04! That’s quite a wide range.

      1. Jane May says:

        Same here…we actually had a $61 last week!!! This week our low was 10 cents πŸ™

        1. HMTKSteve says:

          That’s real good!

          1. Jane May says:

            Yeah, I re-read my comment and meant to say a $61 day last week…the week we made over $100.

            This past week was crap though…we made 10 cents one day.

        2. Mark Shead says:

          You had a single click worth $61?

          1. Jane May says:

            one day we made 61…we had a click through rate of about 6%

      2. Mine was always a couple of cents. Not much to talk about, but I have yet to see those dollar-type ads.

        1. Jane May says:

          Came from being on homepage of Netscape.

          1. Mark Shead says:

            Well congrats on that. I keep looking at Netscape, but I’m not sure I “get” it. Things keep moving around and stuff. I understand Digg and Reddit. πŸ™‚

  5. Erik says:

    Probably pretty high for agloco lol.

  6. Alex says:

    I’m definetely bookmarking this post, so I can re-visit if I ever get into AdWords. Great post:!:

    1. I just signed up for adwords last night and i searched digg for adwords and i brought back a 30 pound free voucher.

      1. Jane May says:

        Pounds ey…You’ld think I’d be used to the conversion by now.

  7. Ashish Mohta says:

    I have been practicing it from a long time.I removed all the ads from my home page.Nobody will click ads which are home page hence your ctr will decrease.Best is to show in single post.

    Moreover dont you all text add on the adsense blocks.I tried this and my earnings where reduced.So i replaced one of the ad block with image…it resulted in Better earning and as you told the bid on ads increases as i see my earnings increased.

    Even putting link units under menu didnt work for me.But putting them along single post ..it increased.

    Thats what best is working for me now, Unless i stublme upon another tweak..

    1. Jane May says:

      Don’t you have trouble getting traffic to an individual post though?

    2. I guess like for me, most of the audience would be reading the front page since the articles are displayed in full, and there’s no need to go to individual posts to read up more on it.

      I guess some of us have to adopt different strategies because of that.

      1. Jane May says:

        exactly…its the same for me too.

    3. HMTKSteve says:

      I did that for a while too, I even blogged about it.

      What I have found is that when you use the AdSense plugin for WordPress all the ads are based on the article on top.

      If a Pokemon article is on top all of my adblocks are Pokemon ads. If a finance article is on top all of the ads are finance.

      I also get better results when someone reads the article by iteself rather than on the home page.

  8. Thanks for the nuggets, John.

  9. John, in the first sentence, you mention “Google allows up to three AdSense ads on a website at any one time.

    I believe the number is four. πŸ™‚

    1. John Chow says:

      I reworded it so it’s more clear. 😎

      1. Jane May says:

        Yeah, what John said! πŸ˜›

      2. Nice, that makes a lot more sense!

    2. Mubin says:

      3 ad block, 1 link unit, and 2 search boxes!

      Thats the maximum. I actually had that on one site.

  10. Ashish Mohta says:

    u sure? i checked back it shows three

  11. I’d be interested in learning some tricks to increase Google’s page rank as well John if you have any tips.

    1. I’d second that request. A lot of us would probably be interested.

      1. Mubin says:

        Lots and Lots of directory submissions.

        Unless your someone like John who can get hat-tricks with Digg, and build up his baclinks on his own.

        1. Good idea. Thanks Mubin.

        2. Plain submissions are not enough. You need to have a strong linking with the community for it to work.

        3. Gary Lee says:

          I agree . . . i just read about this on KingNomar.com and then I found some great directories with high PRs and posted them on my site

          1. Ah, I would be having a read on that later.

        4. HMTKSteve says:

          It is strange how John’s blog is only PR 3 right now

          1. Jane May says:

            Yeah, that’s pretty ridiculous. I wonder why that is because the last update came when John was already hot.

          2. Mark Shead says:

            John tends to try aggressive things. It wouldn’t surprise me if there was a PR penalty involved.

    2. Mark Shead says:

      I’ve had a site go from PR 0 to PR 5 in a few months with about 30 article submissions and 4 or 5 requests for links from other sites.

  12. Mark Shead says:

    If you want to have more than one add on a page, make sure that the ads that are most likely to get clicked appear first in the code. That way they should contain the more expensive ads.

    1. Jane May says:

      Well you have to consider where the most commonly clicked location is on your individual site. For us, the ads in the text are the most clicked on ads so we put the more revenue generating ads there, but we also have a leader board which is first because although it’s not as much in returns, it still gets clicked on close second. We have tested with and without…def more revenue with it in.

      1. Gary Lee says:

        Yes . . I agree with JaneMay as JohnAnthony helped me by advising me to install a leaderboard on my site. I’ve seen my revenue raise by 10 times (of course, we’re talking from single digit cents to double digits)

        1. I guess I would want to consider a leaderboard at the top too. Still, I have to make it blend in with my site layout.

          1. Jane May says:

            Yeah, you want to find a way to find balance so that your site looks clean so that the content is readable, yet have ads not bog down the page.

            tricky stuff these ads are πŸ˜€

        2. Jane May says:

          hey, an increase is an increase right πŸ˜†

          Now you just have to be patient for the readers to come.

      2. Mark Shead says:

        If you can rework your CSS, so the code for the letter board comes after the code for the in-text ad, you will probably see your revenue go up.

        Unless they have changed something, Google will put the most expensive ad first. In your case that will be on the letterboard. If you can put this first ad in the place that gets clicked the most frequently, you should increase your income from each click.

        1. Jane May says:

          We’ve tried that on multiple occasions where the traffic was just about the same. For us, it just works out better this way.

          But for any site, you have to try multiple approaches in similar situations (same traffic, length of time, etc.)

  13. John, any coverage possible on optimizing your channels for monitoring your adsense ads? I’ve just started working w/ the channels and not sure the best way to set them up. Maybe a topic for a future post ❓ Thanks.

    1. nick says:

      I would also be interested in this.

      1. Mark Shead says:

        I setup one channel for the site, and one for each ad on the page. Then I put each ad in it’s channel and the site channel. I can see the agregate info and compare the individual ads to see what is doing better.

  14. One small correction, John. You said:

    “If one ad unit’s eCPM is significantly lower than another unit with a similar click rate, then it’s an indication of a huge bid gap.”

    It’s actually the CPC (cost per click) you want to look at when doing gap analysis, the CTR doesn’t matter.

  15. Marc says:

    Great advice as always John. I did this a long time ago on one of my websites. All the clicks pay well on that website.

  16. Gary Lee says:

    anyone mention that Yahoo gives the bid gap information?

    1. I haven’t heard or seen any news on it. Do they?

  17. Mybloglog has a great tool to track which google ads are working! πŸ˜€

    1. Not exactly correct, because it is not all clicks tracked by MBL that Google accepts as valid.

      My research shows only 60-70% MBL tracked clicks as validated by Google, the rest 40-30% are usually invalid clicks by Google’s metrics.

      1. Gary Lee says:

        I agree. . . . MBL tracks EVERY hit . .

    2. carl says:

      yea, I agree! it’s like a free tool!

  18. Ashish Mohta says:

    @Warren: Use addlogger.They can help in finding fraud clicks and disable ads for particular ads for that ip if they click a lot

  19. I guess the only way to realize this is to actually sit down and play around with the different ad boxes.

    1. Mark Shead says:

      yes just make sure you have a way to actually track it. And keep track of when you changed what so you can compare it with previous data.

  20. James says:

    It is not that hard to see if your getting those gap ads. If you see normal cost clicks and then see a bunch of clicks that are substantially lower, your getting those gap ads. It may be time to cut an ad block or two.
    I have been doing this for some time.
    You also want to make sure that you do not take out the ads that people are clicking on and leave the ones they do not click on instead.

    1. Mark Shead says:

      The ability to have ads in multiple channels really helps with this.

  21. Everton says:

    In my view Google Smart Pricing does exist and you should remove all poorly performing units and replace them with another ad network, as the CPM increase in your better units will more than compenstate for this.

    I did this a few months ago on my sites and I was stunned by the overall increase in CPM and earnings.

    1. Mark Shead says:

      Smart pricing is based on tracking actual conversions–not click throughs.

  22. HMTKSteve says:

    Tip #1: Use channels.

    Tip #2: Use different ad block sizes

    Tip #3: Collect data.

    1. Jane May says:

      # 3 is probably the most important. If you don’t keep track, you’ll never know. And if you’re like me, you’ll forget.. πŸ˜›

      1. Mark Shead says:

        I keep a log of what I’ve changed so I can go back and look at the stats and see if it made things better or not.

  23. jez says:

    This is really great advice, I’ve recently suffered a drop in revenue, I still get some good clicks, but a lot more poor ones so I will definitely experiment with this.

  24. Aris says:

    Believe it or not. This is what showing on Technorati rating right now for this post. I haven’t found the higher number yet. They need to let you running lose John. 😈

    The Google Bid Gap – Sometimes Less Is More Β« John Chow dot Com
    Search this blog Rank: 5,674 (1,323 links from 499 blogs)
    URL: http://www.johnchow.com/the-google-bid-gap-sometimes-less-is-more
    Updated: 5 hours ago

  25. IndoDX says:

    Ads posisition is important too πŸ˜‰

  26. 45n5 says:

    Mr Root of All Evil,

    Good point on click gap, however there is a bigger gap between a click and no click πŸ˜‰

    Your footer is naked, not a single ad. i just scrolled through tons of comments and now I’m down here on the bottom of the page, not a single ad down here?

    Why not?

    It’s rather boring down here. There is no link to leave your site even If I wanted to, and shouldn’t the exit be an ad click?

    there is a bigger gap between a click and no click πŸ˜‰

    1. Mark Shead says:

      That might be a good place for Text Link Ads.

  27. Just a quick note to those who are copying the section markers directly from John’s blog entry:

    The section markers need to be written as HTML comments – so use two dashes, not one, as John did, else you’ll be forming invalid HTML markup.

    For more details, check:
    https://www.google.com/adsense/support/bin/answer.py?answer=23168

  28. Das Brain says:

    Just before reading this post, I started to adjust the placement and the number of Google Adsense ads on one of my video sites, not done just yet. However, I will be monitoring the results of this tweek and see if it does contribute to higher Google ad revenue. Should be interesting. πŸ’‘

    Das Brain

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