How do you know how much you should set your max CPC for?

While using the adwords tool I found that .20 CPC would bring the most estimated clicks. Should I just go with that?

 

I like to get a 100% return, so I don't spend more than half the commission in clicks. It really depends on your desired ROI and how well your product/offer converts. Also, once you get traffic rolling in you can always start lowering your bids.

 

Use an ROI calculator. Estimate your conversion rate, what you can make off the sale and then you can find a good CPC from there.

 

Thanks guys

 

You won't get 100 percent profit specially on a new launch of a campaign. For example say you go into a market like credit cards you notice you their is a ton of other affiliates bidding on credit card related keywords?

Well try to build an affiliate site and bid on the same keywords, but guess what you'll pay 5-10 times higher then what they are because they have been spending WAY more then you for a long time. Regardless of what Google say's the longer you have been spending the cheaper your clicks get.

 

I personally don't believe the google traffic estimator because it doesn't give you the correct number of clicks you will get.From my experience I can tell you that it varies a lot.

One thing is google traffic estimator and another is reality.

If you want to find how many clicks you will get just create a campaign and test it.

Google traffic estimator varies a lot because it all depends on your CTR,it isn't the same if you have a 2% or 15% CTR.
With a 2% CTR you can get 2 clicks from 100 impressions,with a 15% CTR you can get 15 clicks from 100 impressions.

And the most important off all is that you can't know your CTR if you don't test your ads.

CTR varies a lot from one niche to the other,from one keyword to the other.

CTR depends on several factors like:

-Ad copy(relevance of the adcopy and also relevance of the competitors ads matters a lot,if the ad is eye catching you can get also a better CTR).

-Position(1-3 is the best position and you will have a better CTR if you are on this positions,4 and 5 are also good positions but 6 or lower have usually a very poor CTR).

-Niche and keyword.

-And your competition.(I have an ad that is getting a 5% CTR and it is on position 2 with full competition for that keyword on the first page,but I have also an ad that is getting a 27% CTR in position 2 with only one competitor for that keyword).

So as you can see it varies really a lot.

 

while the actual real world CTR, # of clicks and etc varies from person to person, the estimator tool give you the historical averages.

If you type in widget to look up estimated clicks and costs you will at least get a ball park figure

if it says avg cpc is $5 then you know your $0.50 bid will not get you very far...

If it says the avg daily click volume is 100 clicks then you know your not wasting time on a keyword that usually only gets 1 click

it has its uses but no, it should not be taken as precise figures. Usually if the avg CTR is 2% then it uncommon for you to get a 15% CTR while all the rest get 2%.

 

All you said is true but I only said that you can't rely on that tool 100% because it does not give you precise information.

I know that was just an example to explain him better.