What is PPC Momentum?

When I measure momentum in my campaigns, I am looking at the price differences (bid values) for a set time period to measure the rate of rise or decline. For example, say we are looking at a zero line. It is steady at 0. The correlation of prices rising is that the momentum line is above the zero line and rising. This is a clear statement that the uptrend is increasing. Should the upward trending momentum line begin to flatten out, we know that the new gains of the latest leads/sales/or actions are the same as the gains of 10 days earlier. The prices may still be advancing, but the rate of rise (velocity) has leveled off. When the momentum line begins to drop downward toward the zero line, the uptrend in price is still going, but at a decelerating rate, and the trend is losing momentum.

If the momentum line moves below the zero line, this means the latest 10 day close is now under the close of 10 days ago and a near term downtrend is in effect. Also, the 10 day moving average will have started to decline. The lower the momentum lines goes, the more momentum (velocity) the downtrend gains. The downtrend's momentum does not begin to decelerate until the momentum line begins to advance upward again.

Remember, momentum measures the differences between prices at two time intervals, so for the line to advance, the price gains of the latest close must be greater that the price gains of 10 days ago. A flat momentum line is created when prices by close by the same amount as 10 days ago. The momentum line declines when the last price gain is less than that of 10 days ago, even though the prices may still be rising. This is how momentum measures acceleration and deceleration in a price trend.

The way the momentum line is constructed causes it to always be one step ahead of the price movement. The line leads the advance or decline in prices, and levels off while the current price is still in effect. As prices begin to level off, the momentum line begins to move in the opposite direction.

You can use this technique to measure your PPC campaigns.  In any competitive market you are going to see price shifts, not as often as the stock market, but often enough that you make judgments on your campaigns and adjust them accordingly. If you see an upwards spiral happening, and it hit where you were 10 days ago, you can use that data to lower or higher your bids automatically.