Hi All I am mystified about Adwords and some advertisers. For example keyword Track days has a PPC of around £3 a click (around $5) for top position. Now I estimate a track day/motorsport organiser will make £50 on a £150 track day booked. So they must have a conversion rate of 16.6% just to break even with this spend. However, a conversion rate of 3% is more realistic which means they are making a huge loss.... Frustrating or what - I wonder how many companies actually look at their PPC on adwords to see if it is worth it....I dont think many do...
You are making a bunch of assumptions. First, the top prices shown in the keyword tool are based on what the average advertiser's click rate for that keyword is and what they would have to BID if they wanted the top spots. But good advertisers with much higher click rates than the average will be able to bid much lower. Then, you made the assumption that what you bid is what you will pay. Smart advertisers can pay much less than the listed click price. I routinely quote clients who ask half the amount listed in the keyword tool. I'm usually right on at first and the CPC goes down over time. One client pays 85 cents in third position on a keyword the tool shows as $2.20 which is 2.5 times lower. You also make the assumption they want to make money with this keyword at that price. In this particular case, you want people to come to your track. Once there, they'll spend more than just the entry price. There's food, parking, souvenir sales. Plus they might come back and spend more so the spend may well be worth spending $50 for each conversion coming from Adwords. How much would it be to advertise in newspapers, radio or television? The cost per conversion is probably similar but likely much higher. Sounds like a smart advertiser to me.
Thanks for that reply - very interesting..... So how do smart advertisers get a lower CPC than sone poor bugger sat by them in the listings..? In my mind I thought it was all automated by Google...
Hi drivers, In particular you need to look into Quality Score, this means lower cpc for those top positions
CHEERS - and quality score is how google determins how relevant your ad is, in relation to the keyword bidded on?
Yes, quality score is how Google determines relevancy and uses it in their ranking formula as well as in the cost calculation. Download my Adwords FAQ in this and other subjects.
Plus, what you pay is partially dictated by how high your CTR is relative to the norm for that position. If you manage 50% CTR in #1, you can get clicks for 10c or less, even though your bid might be $10+
Let me just say, the keyword "track days" could mean anything. What if a woman wants to "track the days" until she gets pregnant? Or what if a child wants to "track how many days there are" until Christmas. This keyphrase is too broad. Long tail keywords that are not too general will reduce cost, without even thinking about any of that complicated crap.
>> So how do smart advertisers get a lower CPC than sone poor bugger As Chopin points out, he's probably not using the broad match on the keyword "track days". I didn't point that out at first since that was not the question. The smart advertiser will also have higher click rates on his ads. Proper keywords and CTR are the key.
When checking a search term on the Google keyword tool I get CPC of $4.01. However when doing a search using that term on Google not single ad appears. So I don't really get how they claim that estimated average CPC would be that high. Shouldn't I be able to get top position regardless of the bid?
You can be the only one bidding on a keyword and still pay a ridiculous amount if your quality score is terrible. Also, they won't put you on the "top" unless your minimum bid price is over $1. That doesn't mean that you'll pay $1 a click, but your bid must be at least that.
> they won't put you on the "top" unless your minimum bid price is over $1. Uh, no. You'll get the top position if your ad rank beats your competitors. Ad rank is your bid times your quality score. There is no minimum bid price you must reach. Download Adwords FAQ for more details on how it all works.
He's right, there is definitely not a minimum bid. I've been on the top bidding 40 cents for certain keywords.
There is definitely a threshold and it doesn't matter how many competitors there are, as I've found out with a new client. I won't say what he sells but there are only a handful of advertisers for very specific keywords. The bid is only 20 cents and he's the only one showing on top of the SERPs. The CTR is 8%. So the threshold could be as low as an adrank calculation of 150. Pretty sure you'd also need a Great QS, 8 and above so you couldn't bid $1 and a CTR of just 2% (adrank of 200) unless your QS was great. There may be other conditions to meet as well.
I have a quality score of 10/10 on keyword "advanced driving course" yet my cpc has jumped to £2.20 a click....!! Was around £0.80 before... Is this just a consequence of a bidding war....? I have however, changed title from "advanced driving course" where my ctr was 9.8% to "employee driver training" where my ctr is now 2.8% although enquiries has increased slightly...! I want to attract fleet business this way you see.
If a competing advertiser increases their bid, this will affect everybody else down the line. His ad rank increases which could affect what the minimum bid might become. His increased bid will also affect the cost of the advertisers around him. Get two or three advertisers who do this, it will definitely have an impact. If other advertisers have better ads, the effect can be the same too. If one goes from a CTR of 2.8% to 9.8%, his ad rank increases. He thus affects the cost of advertisers around him and he might affect the minimum bid. Again, two or three advertisers doing this will have an impact. Download the Adwords FAQ for more. You say enquiries increased. I assume you mean percentage wise. You need more data before deciding to stick with one ad over another, at least 10 conversions each. However, since one ad gets 3.5 times the click rate, you'll get that many more visitors. So even with a slightly worse conversion rate, you'll convert more and your QS will be better meaning you are in a stronger position against competitors (ad position and costs).
That is not really true about $1.00 bid, I have a maxium bid on a set of keywords of $.65 and still get top spot most of the time and the most that I pay is $.58 per click. Also most of the keywords has a 10/10 quailty score.