Hello I run an online florist in the UK. We are about one year old and I have probably, on and off, spent £10k finding out how not to do adwords. I have tried 5 to 6 so-called Adword Managment companies, and after all this time none of them can get volume conversions which make a profit. I'm so frustrated seeing all my competitors bidding on high-costing terms like "flower delivery" and "florist" and being on there day in and day out, yet when I try it, the cost per sale with come in anywhere between £15 - £20, when are profit per sale is only £9 - £10 We have compelling ads, featuring free chocolates and free delivery with every order, and I like to think that our visitor-to-sale conversion rate is very good, at around 6 - 7%, but I just cant get conversions in volume at the right price, so how are they doing it? I tried to change tact and go for lots of long-tail keywords, but then by ad relevancy drops and I also cant seem to find a reliable source for the hundreds if not thousands of terms I would need. Today I decided. ****-it, and bit top dollat (pound) to be near enough number one under 'flower delivery'. It spent £150 and got me 10 conversions at £15 each (my profit on a sale is £9) I have read that if I put my balls on the line and spent a large amount every day to get conversions at this cost that they would eventually come down substantially, and also, I sometimes feel that the cost-per-conversion is not always accurately tracked in adwords, so could it be that actually it is lower than it is telling me? Im stuck! Help!
That's a point I meant to touch on in my original post and forgot to! Yes, I beleive LTV is definately a major factor in all of this, it simply has to be. And on yesterday's test we did gain 25 sales which although involve a bit of labour, did neither lose money nor make profit, so that's a start I guess!
What sort of position are you appearing in, and what's your clickthrough rate? What matching types are you using? If it's Broad or Phrase Match, you need to run regular Search Query reports, to make sure that your advert only appears for relevant searches. From your numbers, your cost per conversion is about £17.50, with a conversion rate of about 6.5%. From this, I assume that your cost per click is a little over £1. This does seem very high, given your average order value - though my experience of buying flowers is that most sites charge a lot more than this, typically? What sort of Quality Scores are you getting? You say that a high position may eventually reduce your cost per click. This may or may not be true - Google take into account your position when assessing your clickthrough rate - but in this case, if most of the adverts say similar things, then a high position may increase your clickthrough rate more than it typically would, so it may work...
Goes to show that most of these companies aren't worth a squirt. I would look over your entire campaign, especially your keywords and landing pages. "Flower delivery" isn't the type of keyword that I would like to appear first for. You should be far more specific than that. Continually experiment with different longtails, landing pages, ads, etc. Think about better geographic targeting, more competitive pricing, sales promotions, simplifying your checkout system, gathering customer e-mails, etc. Observe your competitors' landing pages, prices, sales funnels, etc., to see what they're doing. Check your site's backward browser compatibility to see if it looks the same in all the most popular browsers being used by your visitors. Run surveys on your home page and elsewhere to learn exactly what your visitors are looking for. Ask people who enter your brick and mortar shop what they would expect from a florist web site. There is much that you can do to increase conversions.
Hallo my friend! Did you ever think to invest some money in SEO! Or at list learn by yourself and save some money!
Maybe try a different approach, and try running some image ads on some very targeted placements. Right now you are banging heads with some real pros in the keyword rat race, so go somewhere they probably aren't. Find some sites using the placement tool that would be a good fit for your service, and run some image ads, and see how that goes. For my niche I could not even consider bidding on keywords, but have made 150% ROI using image ads on targeted placements.
If you have spent £10k and not made any progress, you're doing something wrong! It shouldn't take more than £1-2k to get to grips with your niche in AdWords... It sounds like you're doing okay though and if you could just get your bid prices down, you'd be profitable. Have you considered trying Yahoo Search Marketing & MSN AdCenter? I would highly recommend giving Yahoo a try, as your clicks will be much much cheaper! Kieran
Focus on your CTR. If your ad has a high CTR, the bids will slowly lower. Also, your quality score determines your bid prices. Have you made specific landing pages for each keyword or keyword group? You also might have a few keywords draining your budget. How are you tracking your campaigns? It needs to be down to the keyword level.