Adwords Minimum Bid Is Not $0.01 As You Might Think

Adwords Crew today clarified on their Google Adwords blog that the minimum bid is not necessarily $0.01 as many advertisers might be tempted to think.

I quote from the site –

It’s worth noting that every keyword has a minimum bid that is unique to how successfully that word has been used in an advertiser’s particular account. So the minimum bid for the keyword ‘Kansas City BBQ sauce’ will be different in your account than in your next door neighbor’s account, who happens to be using the same keyword.

Key learning Point
You should put similar keywords in a group (like variations of a basic keywords for which you want to run a single ad) and dissimilar keywords (say another feature of the product or another benefit of your service) in a separate group. See this rough example –

Your company offers web hosting and web design services and you advertise for “web hosting company” and “web design company”. Then you should have one group with these keywords – web hosting company, good web hosting company, web hosting cityname and like.

These keywords should go in another Ad group – web design company, good web design company, web designing cityname and like. This will improve the keywords’ performance and lower your overall CPC.