So I have a brand new PPC campaign, spent $18 so far, the product price is $29.95, NO ORDERS. I was wondering, at which point would you stop and call it a loss of $18 ? Or, would you go to the full $29.95 hoping to pick up 1 order along the way and call it a break-even?
i suppose that you will start to get orders after spending couple of hundreds (my personal experience)
You need to be spending at least a few hundred is not thousands to get a good, profitable campaign. Just make sure to keep split testing your ads to see what performs the best and then scale out from there. $18 is not even a fraction of what needs to be spent. PPC is a game of testing and you need to be able to have the funds to lose a thousand or two while you learn and test to see what converts.
Sorry, let me rephrase the question: I didn't mean stop at 18 bucks, what I was trying to say is how much money is enough to get a decent data sample and determine if your products convert? For example, I might spend $50 and get no orders but the next $50 get 2 orders. It's inconsistent. So how much money do I need to get an accurate conversion ratio?
The answer to your question is not only dependent on amount but you should also track the keywords. Say you sell mobile phone and if your campaign if you try to have keywords related to that you are bound to make sales but to get to perfect keywords you need to have large budget as arbitrage is difficult to find and establish these days but not impossible
It depends so much on the product really. Some products naturally convert better then other. Talk with your AM to see what the average conversion is first and then use that as a benchmark. Next, you have to take into consideration the cost of the clicks. If you are spending $3 per click, then your budget would have to be much higher, because I say you need at the very least 250 clicks to even begin to get a decent sampling. If your clicks are only 10 cents, then your budget would be less. I hope that all makes sense to you. So, in short, my answer to you is that I think you need at least 250 clicks to get a decent idea if something is working or not. It doesn't matter about the money, but it matters about the clicks and traffic.
As Plibb says above, it's not the money, it's the number of clicks. If $50 gets you 100 clicks, that's not enough, especially if you figure the conversion is 1% (although at 1%, you know spending $50 to make $30, you will lose money). At least 250 clicks will give you enough sampling size you need to know how it's really converting. That's for each ad variation by the way. What your ad says can and will influence the conversion to some degree.
Most of my successful campaigns have had sales within the first 1-2x conversion spend. So if you are promoting a product with a commission of $30 I would want to see sales within $30-$60 of ad spend. This formula isn't perfect because if 1 keyword gets all the clicks, that isn't a very good test.
I would say a conversion rate of 1-2% is realistic. So, out of 100 clicks, at least 1 should convert. However, in the beginning, you need to allow a budget to test and fine tune your campaign. If you're getting a lot of click-throughs, but no conversions, then you may need to optimize your keywords and landing page.
I messed around with PPC when I first launched my site, and decided early on that promoting my site with content/seo was the way to go. Now that I have solved that puzzle, it is time to look back at PPC, but I can't help but think it is a losing battle. At dollars per click, how can anyone make money, especially if the product generates less than $100/sale? Obviously you can't. And, with the hours of poking around trying to put together a campaign that would actually generate traffic, I can't find any keywords that will provide actual traffic at a rate that I would deem reasonable. ie .10-.30 a click or something. My question is, do .10 click actually exist? At what point is selling a product via PPC just not reasonable (under $50 etc.)? If I am going to do this, I am going to do it right, but I want to get the word from the PPC experts. Sell me on why I should invest the time and money learning PPC.
SEO is definitely the way to go, but there is a great deal of PPC traffic out there as well. If you're content with just organic traffic, then no problem. But if you're interested in gaining more traffic to your site, then you shouldn't ignore PPC (especially Google). Google calculates your CPC based on a number of factors, including account history, conversion rates, bounce rates, quality score and more. It's more complex than people understand it to be. In other words, it is very possible for one advertiser to be spending $.50 per click, while another spends $2.00 per click on the same exact keyword. With Google, it's not all about who bids the highest. Hopefully, you're utilizing conversion tracking. It's very important to know which specific keywords are converting for you. Don't be scared to get rid of keywords that are not generating sales for you. Also, pay attention to keyword match types and using possible negative keywords. Yes, $.10 keywords still exist, but it's more likely to be for less competitive keywords. For more competitive keywords, you should expect to spend at least $.35 per click. Remember that you don't have to be in the #1 spot. Sometimes, spots #3 to 6 work well also. I think PPC works for just about any niche or product. You just have to put some time into learning it and fine-tuning it. Meaning...you should expect to lose some money in the beginning to test things out. As you begin to get a feel for it, you'll be able to increase conversions while spending less.
To get the cheaper keywords, you need to look towards less competitive keywords, like long tail keywords. I wrote a post about this the other day on how to increase your ROI with these type of keywords. Utilizing Long Tail Keywords
You need to move away from any single word keywords, use long tail keywords, use search specific keywords. Bare in mind that keyword tools work on historic data, so aim for new search terms etc, it will keep cpc low. There are loads of things i could tell you that would really help you, but as part of the PPC-Coach program, i agreed to a none disclosure agreement so i cant tell you anything else as i fear i may break that agreement.
Carl, When you say "single word keywords", do you actually mean one word? If that's the case I would never try anything like that, I know these could cost several bucks per click! I use 2-word and 3-word keywords and my maximum bid is currently below 0.40. Still, I am only breaking even on the campaign. I need to decide if I should try to tweak the campaign somehow or stop and invest money in the sales copy... it could still use improvement. Can you help me decide on this? Would you stop and work on improving the site or let the campaign run, eat away at your money, while playing with keywords/bids? Thanks!
Based on your budget, you are probably not getting a large amount of traffic. Raise your bids up and grow some balls. You need to AT LEAST spend a couple hundred dollars before you get enough data to test campaigns with. You need to make sure that your data is statistically relevant and $18 won't do that..
If your ad has 100 clicks and no conversions, you want to change something on your landing page. If the ad is getting clicks, then it's fine; however, when the ad drives people to your site, and they bounce out, your site is no good. Start over, but don't blame the ad, blame the page...
My budget is obviously not $18. I've got a few hundred already loaded into the account. I was just wondering at which point an Internet Marketer should stop the campaign and consider it a loss until something is revised on the landing page. Right now I'm breaking even, considering the probability of a refund, so only time will tell.
Theres a number of factors which contribute to a high yielding conversion, or low one or just one in general. Split testing, budget, ( larger then $18 ) keywords, landing page ( possibly optimize it for better conversions ) are just a few to start. Not everyone succeeds with PPC advertising. It takes time to study your tests, weed out what works and what doesn't and making revisions. I can spend 3 hrs writing a list of things needed to be done so this is just a very small short summary.