"Minimum bid" was previously shown within Google AdWords  accounts. While it is still displayed in Yahoo! Search Marketing accounts, the metric has been replaced within AdWords by "first page bid ". Despite this fact, there is still a minimum amount you'll have to pay to see your ad displayed, and it is still relevant to your pay-per-click  efforts and AdWords bid management  strategy. In this tutorial you'll learn:
- What minimum bid means.
- The importance of minimum bid to you and your PPC  accounts.
- How to lower your minimum bids and optimize your paid search accounts.
so what is minimum bid, anyway?
Minimum bid refers to the minimum amount you are able to pay for each click to have your ad displayed against a query. Minimum bid, or minimum CPC (cost-per click ) bid, lets you know how much you have to set your maximum bid  to have your ad show for a given keyword (first position bid operates in the same way, with the exception being that you are told how much you have to pay to appear on the first page of search results ).
adwords minimum bid calculation
Minimum bid works similarly across the engines. Each of the major search engines (Google, Yahoo!, Live) feature a variation of Quality Score . Google, for instance, notes that:
"A minimum cost-per-click (CPC ) bid is assigned to each keyword in your account based on its quality (or Quality Score). The minimum bid is usually the lowest amount you can pay per click in order for your keyword to show ads."
So, lowering your minimum bids (and thus your cost-per click) is dependent upon raising your Quality Score.
lowering your minimum bid for ppc
The major factors you need to be concerned with in achieving a high Quality Score for minimum bid are:
- High click-through rate  - Your ads are clicked on often by searchers.
- Tightly related Ad Groups  - The keywords within your Ad Groups are deemed "related" by the search engines.
- Relevant Ad Text  - The text contained in your ads relates to the keywords and queries you are attempting to have it shown in response to.
- Relevant landing pages  - You send people to a page that has content related to your ad and their query.
- Historical Performance - You do all of the above things, repeatedly.
This means you need to create strategically-constructed groupings for your keywords, relevant ads (that people will want to click on), relevant landing pages, and do it all over, and over, and over again.
lower your minimum cpc with WordStream
WordStream is specifically designed to automate and facilitate Quality Score improvements as an AdWords bid tool . Additionally, the ad software  is designed to accumulate and manipulate voluminous long tail keyword lists  for your AdWords bidding  strategy.
Next, you're offered keyword grouping suggestions by the software:
Here we see WordStream offering keyword suggestions to a hardware retailer that sells a number of power tools on their site. As you can see, WordStream has scanned the retailer's keyword database and offered suggestions for groupings based on group size and impact (site visits).
Additionally, WordStream offers automated ad text suggestions. So, having taken the grouping tools at their word and created the highest impact group possible, we can now quickly create Quality Score friendly ad text for that group:
Note that this is not a finished ad. It lacks a clear call to action, proper punctuation, and a clear, concise message.
What it has is a set of keyword recommendations that will improve your click through (as they are relevant keywords contained within your Ad Group) and increase your Quality Scores.
This same list of key phrase suggestions can be applied to landing page creation; you can implement these keyword suggestions in prominent locations (headers, call outs, etc.) and utilize the group's other keywords throughout the page copy.
the WordStream impact on minimum cpc bids
If you're interested in seeing how WordStream's bidding software  impacts Quality Score and ultimately your minimum bids, you can: