Having spent hundreds of hours on this I have come to the conclusion I am missing something massive. Hopefully someone can tell me what. Over the course of 18 months I've tried everything suggested on every website on the net and I've tried them on a number of different sites that I own or have access to (So it's not a problem with the site). Including but not limited to improving ctr, ad copies and landing pages; broad match, exact match, common keywords, niche keywords, hundreds of keyword, keyword variations etc etc. Here's the thing; There are half a dozen companies in my area that make 20 to 30 sales a day each on adwords. I sell exactly the same goods and I have tried every seo technique to make my site a little bit better than theirs. (ie. better quality images, better load times, similar calls to action, a few more help pages, same price range, easy checkout etc etc.) They all rank at the top of adwords. To get up there with them I need to pay between $2 and $3 per click. CTR is over 2% and I get lots of visits and average a sale every 100 clicks which is comparible to other targetted campaigns. The trouble is that the break even point is 70c per click !! I would need to get it much lower than that even to make all this worthwhile. Contrary to what I've read the average cpc doesnt fall dramatically when ctr improves so I can't ever see it dropping from say $2.50 to around 30c which is what it would need to put the campaign into a worthwhile profit. (at 30c the ads appear on page 50 odd and I get one click a fortnight) (As an example, I ran one keyword at a loss at $2.50 for 3 months, the ctr improved from 0.6 to 2.4 but the cpc only fell by 2c) The only answers I can think of are these; a.) the other 300 companies above me when I bid 30c are all losing money hand over fist and don't realise it. (not likely) b.) they have all stumbled upon some technique that has thus far eluded me and are all paying much less than me for clicks. c.) they get a sale every 5 clicks (unlikely given that click fraud accounts for 20% and they are selling exactly the same goods for the same price) d.) they have a deal with Google. (more on this >>>>) A friend who works in management for one of my competitors told me that they don't pay per click, he said they pay a fixed fee (several thousand per month) and are guaranteed front page for every search on their keyphrases no matter how many clicks they get, he told me they would go bust in weeks if they had to pay the per click rates neccessary to get on the front page. I've searched the net high and low and can't find any mention of this although it would explain nicely how they are doing it, I would happily pay thousands myself if it is true. Does anyone know?
There's no such deal possible with AdWords. Perhaps your competitors are considering LTV when determing ad spend? It could also be they just convert at a much higher rate than you are.
Thanks for the quick response; It can't be LTV, once you've bought the product you're unlikely to need more for years so there's little repeat business. Branding is not an option either, one of my main competitors ran a decorating company by day until the beginning of this year, running the website and completing the orders during the evening with his wife, so I doubt he was willing to spend 20 or 30k per month just to 'get the name known'. There is also the problem that there are half a dozen doing it; if we were talking a few hundred dollars to get LTV or branding I could live with that but this is just so far out it wouldn't even be a consideration for a national company let alone one man bands. Once you're on that front page with the main keywords you get hundreds and hundreds of clicks a day. There is the possibility that they convert better but they would have to convert MUCH better, I can't believe they all convert over three times better than me and even at that they would only break even. I just don't think it's possible for them to have a conversion rate below 1 in 30 in a market with hundreds of competitors.
Perhaps they hit them up with offers for other related products after the initial sale? I remember a campaign I worked on a few years ago and I thought I was kicking ass and taking names in the space. Met someone else in the space and compared notes and man, they were handing it to me like no one's business. The lessen I learned from that is when you're to a point whre you think you're the lead, odds are you are not and there's ALWAYS room for improvement. Just tossing some ideas around.
Its possible but hard to imagine that they all do this effectively. I appreciate any ideas at this point & will agree that there's always room for improvement, it's just that hours and hours of work only achieve small results; a slightly better ctr or a slightly improved roi. The fact is something big needs to change; the competition are not webmasters, for most of them its a second job, their sites are in the main off the shelf shopping carts with no optimisation, they all land on the front page, they appear to use broad match on all the keywords (type in a line from a porn movie followed by a main keyword and up they come). I was thinking of up-ing the daily budget (I read that it can make a difference on actual price you pay per click) but again I can't see it making that much difference if any at all. (I had a daily budget of only $40 when I was bidding enough to get on the front page because I wanted to test it for three months without going bust; they must have daily budgets of at least several hundred)
I've been in the same spot more than once. I have a few other AdWords folks I share notes with from time to time. Sometimes when I hit a wall I give them access to the campaign in question without telling them any of my stratagies to date. They spend an hour or so and shoot me a summary of their take which is often A LOT different than mine. Sometimes a fresh set of eyes can work wonders and offer insight you won't find elsewhere. Before I had access to this, let's call it "circle of friends", I would hire a consultant for an hour or two to do the same - give me ideas from a fresh pair of eyes. It may cost you a few hundred bucks but in the past it's paid huge dividends for me. ps - this is not a passive sales pitch as I have more than enough to work on and am not doing any freelance/contract work for the time being
Hi Bounty, your competitors maybe are running at a massive loss in the hope that your budget runs out before theirs.....Or maybe they simply dont realise they are making a loss, it does happen. Like any advertising adwords is a pain in the arse to set just right, I barely break even using it, im just hoping i can tweak it correctly one day.
You mentioned you optimized your site for SEO and AdWords. Have you had someone look over the site conversion and usability wise? I recently had a project where they were spending a decent amount per day to bring traffic via AdWords, and were at like .5% conversions. Basically, the site was designed without the user in mind, and despite the great products they had, they weren't selling. One overhaul later, they're doing much better. From a supply side perspective - are they getting better deals on the product? Maybe they also have enough sales from other channels that they can afford to sell at a loss in order to gain brand loyalty. There are a million factors that are not related to AdWords here, so it's hard to figure out exactly what the story is. I agree with GuyFromchicago- let other people have a look. It always helps.
I think 1% is a very low, I average 8% - 20% and I have very competitive markets (financial) Work on your website and test several setups. If you can raise your sale from 1% to 4% you're making money with adwords.
What kind of site is this and what is the general call to action? ecommerce, lead gen, etc? Does your method of conversion differ from the other sites? There are so many variables with this type of marketing it's hard to give you any concrete advice with such vague information.
Just a few observations based on what you said to maybe help a bit.. First, not to doubt you at all but are you positive the competition really makes that many sales/day if you've tried virtually replicating their content & ad style and don't get that many? As we know, or can assume, it's not possible/likely to drive a "always on the top" deal with Adwords, so maybe your friend who gave you the info on that was exaggerating his sales as well? Totally could not be the case, just a possibility. I've had situations like that as well where I have a better/more straightforward website than the competition with a clearer call to action and more information/better sales pitch, etc etc, and still can't figure out how the competition can afford to keep paying for the keyword when it just costs me money. Have you figured out which keywords actually lead to the most sales? I'm assuming you have, but sometimes it's easy to see sales coming in and think they're from the "most logical" keywords when really they're coming from some much more obscure keyphrase that may only be costing 10 cents/click and converting at the same rate or slightly lower. It sounds like you're pretty in the know and on top of things, and while I'm not an Adwords Expert, I'd be happy to look over your site/ads to see if there's any other issues or options to try Feel free to PM me, if you like. Otherwise, it sounds like a tricky issue - sometimes Adwords is just plain mysterious! -T
In addition to what's been mentioned: If you haven't already, I would test which keywords are converting better. Also, could the products they are selling be costing them less due to higher volumes or cheaper prices?
Just a point in passing, but you are aware that the landing page quality doesn't affect your quality score for position/bidding purposes, only to set your minimum bid? Step three, white bullet point two on https://adwords.google.com/support/bin/answer.py?answer=49174 explains how your quality score is calculated for ranking purposes... How are your Quality Scores, according to Google? By improving from OK to Great you can potentially halve your cost per click, more or less...
Hi, I barely break even using Adwords and not worth my time and money. So I am concentrating in SEO and different viral marketing techniques and getting a decent traffic free of cost. Regards, Amy.
One thing to keep in mind is that the competition may be losing money but still consider it a a successful campaign. Think of traditional advertising- the a million spent on advertising is rarely recouped in increased sales revenue, but advertising is deemed worthy because of the long-term brand building. If you are getting decent click-thru but not enough sales that is a problem with your site, not adwords. Another good idea that has been touched upon here is focusing your campaign in fewer, lower-cost keywords. It's OK if you're missing out on some traffic on the big keywords if the small keywords are getting you sales. PM me for more if or if you'd like me to look over your site.
Probably true, though this can happen through adverts that are misleading, or just vague. Also, advertising products where your range is very limited can cause a poor conversion rate. Mostly, it's just a poorly designed website or uncompetitive prices, though.