A lot of analysis goes into a good AdWords campaign. You must do much of this work beforehand, to keep from losing money. This week's thread gives you a taste of the kind of math and thoughtful consideration you should do if you hope to make your campaigns pay off. Be sure to stop by the thread and add your experiences.
sherminator Adwords mathematical question
Hi all,
I sell men's accessories through my site and make about 10 profit
on each item after postage and product cost. The average CPC in
my field is around 0.50p, below which my site would not be shown
on page 1. If I aim for page 2, I don't get as many impressions.
1. The quality score of all my ads is around 9/10.
2. Keywords are very specific and exact match, NOT broad; to get
very high quality targeted clicks.
3. I prefer to keep content network off as I think it's best to
aim for people who are actually searching for the product on Google
with full intention to buy.
So, let's say I was to spend 10 a day/300 month on AdWords that will bring me 20 visits a day/600 month.
With a 2% conversion rate I get only 12 sales a month. Equaling
to 120 profit, but I've spent 300 on AdWords.
The AdWords CPC ratio and my profit margins don't match. My prices are very
sensible and completely in tune with the market.
For me to make money -
1. Either my CPC has to come down to at least 10p a click.
2. or increase the conversion rate to 5% JUST to break even.
The only way to make it work is to increase conversion rate to 10-20%, does anyone get that kind of rates with AdWords?
Thanks
EGOL
You have done a good analysis and understand what needs to be done - up your conversion rate or get more visitors from your current ad spend - or better yet, do both.
Do you have a lot of ads running? I usually write about ten versions of each ad and allow Google to pick the best one. Also you should experiment with different landing pages to increase your conversion rate. Get a copy of Tim Ash's book "Landing Page Optimization" and see if you can improve.
One more thing to consider. I have one site that gets lots of repeat sales. If you are selling consumable items then your customers might come back to buy over and over. So, even if you lose money on sale #1 you will make money in the long run through customer loyalty. This can be cultivated through email marketing.
Good luck. Let us know how you do.
Bob535
As above, I agree with increasing conversion rate, or having repeat customers.
However, there are some industries in which PPC is not going to add value to your company. In these cases, I would suggest SEO (if possible for your industry).
I have had campaigns that only broke even, if you added the time for managing it; it was a bad business idea. Not everyone makes a lot of money from AdWords, especially in the current financial environment.
One suggestion: drop any keywords that will cost more than 10p to make it to the front page. This will probably result in a lot less clicks; however, at least you will be making money from them.
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