» Understanding the Bidding Algorithms

Since Yahoo has introduced a new "Auto Bidding" system, there are two bidding types for your keyword:

• AutoBid Type
• FixedBid Type

Dynamic Bid Maximizer uses different strategies for different bid types in order to maximize your bidding results and save you more money. Before getting started with Dynamic Bid Maximizer, you need to understand the difference between "Auto Bid" and "Fixed Bid" type in order to understand how Bid Maximizer works. You can find more information about Yahoo's Auto Bidding system.

Here, We would like to show you how Dynamic Bid Maximizer can save you more money and drive your competitors crazy.

1. If your keyword is in Fixed Type:
The program will remove bid gap and bid to your target position. For example:

$2.00
$1.70
$1.50 <--- Your current position
$1.30
$1.00
$0.70
$0.40

if your desired target position is #2, then Dynamic Bid Maximizer will bid at $1.71, and your position changes from #3 to #2.

if you want to stay at the current position #3, then Dynamic Bid Maximizer will remove the bid gap and change your bid to $1.31. You save $0.20 per click.

If you choose to bid to a best position range between 1 - 3, then the program will find the BEST VALUE position for you and bid to position #2 at $1.71, because there is a bigger bid gap($0.30) between #1($2.00) and #2($1.70) than the bid gap between #2 and #3.

2. If your keyword is in Auto Bidding Type:
You need to be careful with this Auto bid type, because it uses a different strategy compared to Fixed bid type.

In this bid type, please note, the program will NOT remove bid gap, instead the Yahoo's Auto Bidding system will remove the bid gaps for you automatically. However, you need to set your MaxBid very carefully to void paying too much money on your keywords. Only Dynamic Bid Maximizer can do this job efficiently for you.

Here is a bidding sample. Let's say your Upper Bid Limit is $3.00, your Preserve Bid Value is $0.50

$2.00
$1.70
$1.50
$1.50
$1.00
$0.70
$0.40

If your desired position is #1, the program will bid to $2.50(the program will set your Max Bid = #1 + Preserve Bid = $2.50). In this case, your actual bid cost/(cost per click) is $2.01, when you do a search on Yahoo, you will see this result:

$2.50 <--- your position
$2.00
$1.70
$1.50
$1.50
$1.00
$0.70
$0.40

NOTE:
Though there is a "bid gap" between your position #1and next bid #2, however, you are not paying $2.50, instead your actual bid cost is $2.01 because Yahoo's Auto Bidding system will remove the bid gap for you. Your real Maximum bid(Upper Bid Limit) is $3.00 which is hidden by Dynamic Bid Maximizer so that your competitor can not see your real maximum bid.

If your desired position is #3, then the program will bid at $2.00(Max Bid=$2.00), in this case, your actual bid cost = $1.71(= #3 + 0.01). By doing this, it will cost your competitor in position #2 to pay the maximum amount $2.00.

If you choose to bid to best value position between 1 - 3, the program will bid at $2.50 for position #2, then it will cost your competitor #1 position to pay $2.50 per click.

» Driving your competitors crazy with our new "Competitors Killer" strategy:

There are two modes in Dynamic Bid Maximizer:

• Standard Mode
• Competitors Killer Mode

Standard Mode - Standard Mode will bid in normal way as shown above, it allows you to always bid to your desired target position as normal.

Competitors Killer Mode - If you are an advanced user, you can consider using "Competitor Killer Mode". In this mode, the program will attempt to bid to your target position, however, the program may NOT always bid to your desired position, instead it will bid to a NEAREST best value position where COST your competitors to pay more money.

Here is how it works:

If your desired position is #1, instead of bidding to the target position #1 directly, the program will first check if there is a big bid gap between #1 and #2, if the bid gap between #1 and #2($2.00 - $1.70) is smaller than your "Preserve Value"($0.50) it will move you up to #1 position, the program will bid to the position #1, Max Bid = $2.50. In this case, it is not worth it to beat your competitor because the bid gap is very small.

(Note: if your competitor wants to become #1, he needs to pay at least $2.51)

If the bid gap($0.60) between #1 and #2 is bigger than Preserve value($0.50), for example:

$2.00
$1.40
$1.30
$1.10
$1.00
$0.70
$0.40

in this case, the program will NOT bid to your desired position #1, instead it will bid one position down of your desired position #1 and bid at the SAME amount of your target position#1, in this way, it will cost your competitor(#1 position) to pay the Maximum amount of your MaxBid. In this sample, the program will bid at $2.00 which is the same as #1(your desired position), so that your competitor(#1 bid) will pay $2.00, and you only pay $1.41 at position #2.

(Note: If you bid to #1 position, your bid cost is $2.01, and your competitor will pay $1.41 in position #2, with Competitor Killer Mode, we believe position #2 is the best VALUE position because it costs less)

If your desired position is #2, in above sample, the bid gap($0.10) between #2 and #3 is smaller than your Preserve Bid Value($0.50), the program will bid at $2.00(same amount as #1), in this way, you are in position #2 and your actual bid cost is $1.41.

(Note: You save money, and your competitor in position #1 will pay $2.01)

If your desired position is #2, and the bid gap($0.60) between #2 and #3 is bigger than your Preserve Bid Value($0.50), for example:

$2.00
$1.70
$1.10
$1.10
$1.00
$0.70
$0.40

the program will NOT bid to your desired position #2, instead, it will bid at $1.70 in position #3, in this way, it will force your competitor to pay $1.71 for position #2 and you only pay $1.11 for position #3.

(Note: you save money by bidding at position #3 and paying $1.11, but it cost your competitor to pay $1.71 at position #2).

Please note that this is very complicated logic for Yahoo's new auto bidding. The concept of the "Competitors Killer" is to bid to a best value position that costs your competitor to pay more money, it will force your competitor to move their position down and you stay on the top. Please study these Bidding algorithms carefully and fully understand how it works before choosing "Competitor Killer Mode".

» Which option should I use?

According to our study, we suggest that "Bid to Best Value Position Range" and enable "Competitor Killer Mode" is the best option for "Auto Bidding Type" and it will save you a lot of money. If money is not an important issue, and you always want to stay at a certain position, then bidding to "Target Position" will be your best choice.

Bid to Best Value Position Range:

By choosing "Bid to Best Value Position Range" allows you to move your position between your desired position range, and you will save money. Here is a sample:

$2.00
$1.70
$1.10
$1.10
$1.00
$0.70
$0.40

if you want to bid to a FIXED position #2, in above case, you will set your Max Bid to $2.00(your actual bid cost is $1.71). If your competitor(#3 position) change their Max Bid to $1.99, than your actual bid cost will be $2.00. If you want to stay in this FIXED position #2, then you will always pay $2.00, but your competitor(#3 position) only pay $1.11 at position #3. You pay $0.89 more than your competitor.

If you choose to bid to "Best Value Position" range between 1 - 3, when your competitor change their bid to $1.99, Dynamic Bid Maximizer will adjust your Max Bid to $1.99, in this case, your competitor(was on position #3) will change to #2 and pay $1.99, you will DROP to position #3 and pay $1.11. It is a saving of $0.89 by dropping from position #2 to #3 in order to save money.


Please click here to download a 30 days risk free demo version and find out how Dynamic Bid Maximizer can save you money and drive your competitors crazy.