I have an ecommerce site and my items are only $9.99 each. Is there a limit to what I should be willing to bid on keywords based on the amount I charge for my products? Hope this makes sense. Thanks
Yes of course, unless you have a bottomless pit of money to spend of course You need to work out your break even point - in other words how many clicks you can afford until you spend more than you would make with one sale. If you are bidding $1 a click, then you can obviously afford circa ten clicks... if you get 15 clicks without a sale you have lost $5. At first, it is essential to work out your conversion rate as without that data you cannot work out how much to spend per click. Doing so will cost you money at first but will be responsible for much more revenue in the future... 1. Figure out your conversion rate. 2. Figure out your break even point 3. Bid accordingly. Hope that helps Cheers Stewart
I'd suggest reading this: http://www.epiphanysolutions.co.uk/google-adwords/ppc-advertising-where-is-the-sweet-spot.html It's a guide I wrote that shows how to determine the most profitable position for your advert to appear (and hence the optimal bid). As Marv said, it depends on your conversion rate, but also your margin. If you make a profit of $1 on every sale, with a 2% conversion rate, your breakeven cost per click is only $0.02 (and you won't make money from PPC). If on the other hand, you make $7 from a sale, and have a 10% conversion rate, your breakeven cpc is $0.70, and you can probably make a decent profit from your campaign.