How does it work?
Keywords:
The keywords are chosen by the merchant play a crucial role in the display of the ad. The seller can choose multiple keywords for each product and if the customer search term contains any of the keywords selected, then the advertisement bid would enter the auction. More the number of keywords selected for each, the more the chance of the product getting into the auction. You can also choose a negative match where you can choose certain keywords, especially specifications of your primary keyword such as color, size, etc., for which your bid won’t be considered. This could narrow down and specify the targeted audience and could display the ad to customers with higher buying chances.
Match Type:
Another specification merchants can choose regarding their advertisement is the match type- Broad, phrase, and exact. It’s the gravity of the search term triggering each keyword selected by the seller and defines the relationship between the search term and the selected keyword. In a broad match type, any search text having a mention of the selected keyword would be considered for advertising. Specifications or product descriptions in the search term, which may not be in the keyword won’t be considered. In the phrase match type, your ad would enter the auction only for search terms somewhat similar to the selected keywords. And in the exact match type, if the search term is the exact keyword, then only the ad would enter for auction.
Bid Amount
The bid amount is the amount seller is willing to pay for the display of a product advertisement. Since it’s a PPC (Pay Per Click) plan, merchants have to pay only for the number of clicks the advertisement gets. The average bid of non-competitive keywords is US$0.20 and for a normal competitive keyword, it’s $2. For highly competitive keywords cost $6 on an average. The difference between the Average cost of sale and the selling price can be used as the maximum bid amount.
Once the search term triggers any of the selected keywords, it would enter the auction, and then it’s the bid amount decides which merchant should be given the chance. The highest bid wins and that merchant product would be shown in the first place. And they only have to pay $0.01 more than the second won bid. Merchants can choose the bid amount for each keyword depending on its demand.
