CPC too high to make campaign profitable - Do you have similar experience?

Hi,

I know that the days of $0.05 clicks is long gone, but even accepting to bid $0.20 for most of my keywords is not enough. I sell $19 products and campaigns were quite profitable until 2 years ago with ROI ranging from 100% to 400%.

Now, I would have to bid $0.20 to $0.80 for 80% of my keywords. Only a small fraction of keywords shows if I can bid up to $0.20. (conversion rate of 1% - product at $19 - easy math, right?)

My first question is: how on earth do people manage to create profitable campaigns with such high CPC?

Do you sell more expensive products or services on average?

Do you achieve higher conversion rates?

Do you bid less?

What is your trick to get your campaigns to be profitable?

Thanks! I am truly running out of ideas

 

You need better conversion rates...i'd look at the landing page and keyword selection.

 

GuyFromChicago is right.

You don't just need clicks, you need those clicks that convert into sales. Eventhough that bids are high, if you are bidding on the right keywords then you will still be profiting.

All you need to do is find keywords that bring you sales and bid only on them.

 

Think relevancy. Your goal is not to maximize clicks. Your goal is to maximize relevant clicks. Traffic does nothing if it is not traffic that is going to make a purchase.

 

I think this thread is going to be filled with duplicate posts.
Instead of reading what everyone else says - they just repeat as if they were saying something different.

Goodluck!

 

It should be reiterated. People focus too much on traffic and not enough on relevancy. Try using DKI to get more clicks. Use common keywords in your adcopy and salescopy. The more bolding you have, the more clicks you'll get.

Some niches are really saturated, in which case you either have to find other ways to promote, or other keyword variations to use. Try using the keyword tool here for some suggestions on keywords with less competition

First search result in google organics under keyword tool - I'd give you a link, but I'm not allowed to yet... lol

 

You need to think laterally to find cheaper, alternative, keywords. You also need to revise your landing page; 1% is quite disagreeable. Finding products which pay more than $19 is another suggestion, as is expanding into other, cheaper, PPC services.

 

You may need to make use of more unique long-tail phrases in order to get the cpc down. The more unique they are, the cheaper they should be.

However, be careful not to lose sight of relevancy.

 

A quick update and thanks for the replies. All info is useful to me right now, so please keep posting anything that comes to mind, ok?

First, my keywords. Most of my keyphrases do contain already at least 3 words but yes, there is still room to find thousands more combinations of course.

When I do expand into longer key phrases the amount of clicks becomes so low! For some of my products, I do already have around 6000 keyphrases all extremely targeted. And again 80% of these keyphrases require a bid ranging from $0.20 to $ 1.00. I would have to be in the 2% - 5% conversion rate just to come even.

Is this the type of prices that you pay for your clicks?

(PS: I am in the dating/personal development field - I have a product on break ups - keywords are like "How to get over her", Breakup recovery", etc which are all very targeted)

Masterful, you say that 1% conversion rate is not good enough? What type of conversion rate do you get? What are other's experience? What type of conversion rate do you get?

Thanks again

 

can you expand a bit on this? DKI? Bolding?

I am not familiar with these concepts. Thanks

 

Hi, yea sure.

First, if you notice the ads that come up when you enter a search into google, some are bolded right? The words that are bolded are the words that you have searched for exactly.

The Adwords system has a feature that lets you dynamically insert keywords that people search for.

To better explain, say I typed in "Buy Playstation3," just for example's sake. Well if you had DKI set up in your adcopy, and you have ad adgroup set up for this, then any keyword in your adgroup will trigger the DKI.

So no matter what you have in your adcopy otherwise, your ad will say Buy Playstation3 in bold letters. People are way more likely to click on their ad if it says EXACTLY what they enter.

Also, if the search term they enter is too long (longer than the 25 char limit), you will enter a phrase that will display otherwise.

The way I would do this is by typing in my adcopy

{Keyword: Playstation3 Is Here}

Anytime someone enters a match to my adgroup, whatever they typed in will show up in bold face font in my adcopy. If it is over 25 chars, then my default text "Playstation3 Is Here" will show.

That make sense?

 

I see, thanks for that - What does DKI stand for eactly?

 

i hope not...

at least i learn something new as i am still consider a newbie in this forum and also adwords

 

Dynamic Keywords Insertion

Find out more here http://forums.digitalpoint.com/showthread.php?t=261752

 

Thanks - Appreciated

 

One problem you may be having is that other people bidding on the same keywords may be selling more valuable products. For example, if you sell cheap telephone tables for £20 each, bidding on "furniture" or "tables", or even "telephone tables" will put you in competition with people who could be making £100 from each conversion (or more). So it's likely that they'll be able to outbid you.

It is a problem I've had with low-value conversions in the past. Often, campaigns convert at 5% or less, and if you're only making $5 profit (for example) from each conversion, your breakeven bid is $0.25, so to make money your bids will be so low that you don't get much traffic.

There isn't really a solution to it - improve your conversion rate or your margin.

 

Thanks Custardmite, appreciated

 

make zhe keywords highly relevant

 

1. Are you tracking conversions?

2. Did you do keyword research or just use the throw 6,000 keywords at the wall and hope something sticks concept??

Overture
No data for phrase: how to get over her

Wordtracker
No data for phrase: how to get over her


3. Do you have a minimum 1,000 ads for those keywords?

If you write just a few ads your quality score suffers.

4. Are the keywords broken down into compacted ad groups? you would probably need a couple hundred.

5. When you target large amounts of keywords at a time and have a bunch of zeros and under 10% ctrs then your quality score suffers and your CPC stays set high.

6. Landing pages? Do you have at least 1,000 to target the 6,000 keywords?

Too few landing pages your qualtiy score suffers and the more you will need to pay CPC.

"You are an inexperienced gambler... walking into the halls of the worlds smartest casino ever known....."

By me

Slip up... and say bye bye checking account

Good luck!

 

thanks Sem. I get your point

PS: yes, i do track and no I did not just throw in a 6000 irrelevant keywords and hope they stick. My collection is the result of in depth research and yes! The results were great but not beyond the $0.20 CPC.

I did run at a time around 150 ad groups and the sum of my campaigns contain close to 50'000 keyphrases grouped in specific targets.

I did not use different landing pages (only for split tests) and just started experimenting with DKI (thanks to an advice in this very thread).

Thanks for a few good points by the way. I'll read your post again a few times until I get all the advice juice from it