Because paid placement has increased in popularity among search marketers, it is rare to find a popular keyword phrases without any bidders. It is also increasingly likely hat bidders are using bid management software to control constant changes to their bids to maintain their place as #1 for example.

When two or more sites decide to be #1 for a particular keyword, a keyword battle ensues. Each time one site raises tits bid, another increases its bid to leapfrog the original site. Unless one side eventually reaches their bid limit, the bidding can escalate dramatically. That’s good for the search engines, but not for search marketers.

Sometimes these battles are fought intentionally, with each side consciously raising its bids, but all too often the battle is a mistake. The typical keyword battle arises between two sites with bid management software instructed to always be #1 for that keyword. As you might expect, neither site’s software can succeed at being #1 for long – just the length of time in between bids. In this situation, the dueling software keeps bidding higher until one side exhausts its budget, usually within a couple of days.

It does not have to be that way. When you set up your bid management software, you can still request that it be #1, but also set a limit of the highest bid you are willing to pay. That way, your bid management system stops escalating its bid when it reaches the limit you set, defusing the battle, and saving your budget for opportunities with higher return on your investment.