Hi, I started with Adwords about 1 and 1/2 month ago and have been struggling to see any results. Although it is a very competitive field, so far we've had 400 clicks from 37,000 impressions with only 10 conversions. Is this the kind of conversion rate you'd expect from a competitive field? Would you suggest going into the top 1-3 positions or staying low, positions 7-10, in a ultra-competitive field? Whats the best way to succeed in a competitive field? Appreciate any help or suggestions you guys can give. Thanks. Jimmy.
Quite a few questions there. The conversion rate is key to the whole question of where your advert should appear. There are, in my humble opinion, three major factors affecting your conversion rate; keyword selection, website design and the product itself. If your adverts appear on vague, generic keywords, your conversion rate will often suffer, as the searchers are still at the information-gathering stage, and not as likely to buy. If your website is hard to navigate, people will often give up. If your range of products is lacking, or the prices are uncompetitive, people won't bother. There's no 'right' conversion rate - 2.5% is a bit low, but not unusual - I've got profitable campaigns with a conversion rate below 1%... To decide where your advert should be, try moving your advert around, and find out the clickthrough rates and cost per clicks in each position. From this, if you know how much profit you're making on an average sale (excluding the Google bids), then you can work out which position makes you the most money. Put your advert there, then start trying to improve your Quality Score (by improving the clickthrough rate or advert relevance) and your Conversion Rate. I know it sounds crazy, but it's a simple fact that: the amount of competition for a keyword has no bearing on your ability to make money, only the amount that you make. This is because if the conversion rate is fixed, then the breakeven cost-per-click is fixed. The only thing that isn't is how much traffic you get from that bid (which is dependent on the position of your advert).
Great detailed response, just one other question i have. Obviously there is a difference when there is something physically for sale such as a digital camera. You would expect to get a lower conversion rate if you were bidding on "digital camera" than if you were bidding on "buy canon powershot a620 online". But what about the service industry, e.g. recruitment agency, insurance broker, etc, how do you tell if someone is searching for information rather than looking to purchase a service?
you should also realise that some people are "click happy" - top ads can attract more clicks. but there is some suggestions that ads in positions 4-5 can attract more qualified prospects. like with anything - sadly you need to test a guide is from "perry marshal" - buy his guide. it will teach you a lot. i would suggest never to outsource your ppc to any firm. afterall they are spending your money and not their own
Actually, 2.5% is pretty darn good. I'd be happy with that. Whenever I promote an affiliate product I'm happy to get a 1% conversion. If you are not profitable at 2.5% you would most likely be better off looking at what other areas of your business you can improve upon to increase your profit per conversion.
Thanks for all your responses. I realise that 2.5% is a good conversion but i need at least 10% to make money. Maybe i'm paying too much for clicks. Regarding copywriting i've followed the usual guideline of having the keyword in the title of the ad and also in the ad text and url, but nearly all the top 10 adverts have the same ad title for some keywords, so i've done the same. Is that where i could be going wrong? When the yellow bar ads are on the google results, how much of the traffic would they get if all ads were using the same title? Is it something like this? 1-3: 70% (yellow bar) 3-10: 30% Josiah - can you help with copywriting?
Unless your conversion is something like filling in a lead form and signing up for a newsletter- 10% is almost unattainable with first time traffic for a sale. Even pro copywriters wouldn't promise you 10%. It sounds like you need to examine whether you are paying too much per click.
Profit per conversion = profit per conversion (exc. adverts) - (cost per click/conversion rate). So if you need an unrealistic (10%) conversion rate to break even, the only alternatives are to increase your profit per conversion (exc. adverts) or reduce your cost per click. In other words, either you aren't charging enough for your products (or they are costing you too much), or you are bidding too much. The most profitable cost per click will be substantially lower than your break-even cpc. If this means that your advert appears a long way down the results, then you should look at improving your quality score (you should anyway).