Newbie Question - how do I make money with these CPC figures?

Discussion in 'Google AdWords' started by shkad14, Nov 20, 2008.

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  1. #1
    I was looking at starting an adwords campaign. I made a small list of longtails to target. I am promoting a product that gives $10 per lead. Here are the figures based on a $50 day budget.

    8.01 - $10.81 1 - 3 1 - 2 $10 - $20
    $7.13 - $9.87 1 - 3 2 - 3 $20 - $40
    $8.82 - $11.19 1 - 3 0 - 1 $1 - $2
    $7.44 - $9.62 1 - 3 0 - 1 $4
    TOTAL $7.47 - $10.18 1 - 3 3 - 5 $30 - $50

    I took the keywords out so google wouldnt get mad. Since this is my first attempt, what does all this mean? It is going to cost me 30-50 dollars for 3-5 clicks? Doesnt this mean I can not make a profit on a $10 cpa offer?

    Again, this is my first attempt...Thanks
     
    shkad14, Nov 20, 2008 IP
  2. compacttuner

    compacttuner Peon

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    #2
    your cpc is going to be affected more by your click thru ratio and the quality score of your site.
     
    compacttuner, Nov 20, 2008 IP
  3. Maximizationator

    Maximizationator Peon

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    #3
    You're paying way too much per click.

    Profit = Clicks ((Conversion Rate x Payout) - CPC)

    Since you obviously want positive profit, the figure inside the brackets has to be positive.

    so... we want

    Conversion Rate x Payout > CPC

    then

    Conversion Rate > CPC / Payout

    but you have

    $10 per click / $10 per sale, requiring a conversion rate of 100% just to break even. Not going to happen.

    I'd try to find more keywords, lower your maximum bid per click considerably, and if you're selling something, make sure the ad title and description conveys that... while doing so may lower your number of clicks, it will increase your conversion rate.
     
    Maximizationator, Nov 20, 2008 IP
  4. drunkseo

    drunkseo Peon

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    #4
    This is called Google Slap, your quality score is low therefore google is punishing you with extra high bids
     
    drunkseo, Nov 20, 2008 IP
  5. bjewelled

    bjewelled Peon

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    #5
    I don't think so. The OP says he is "looking at starting an adwords campaign"which suggests there is nothing set up yet that Goolge can slap down. I think the figures he gives are from the Keyword tool and represent suggested bid, expected ad position, potential clicks per day and cost. Looks like a very competitive market!

    shkad14,
    Are these really 'longtail' - they seem very expensive for that.

    One thing to bear in mind is that none of the info given by the tool in terms of bid, position, CPC etc. is particularly accurate. Furthermore, I suspect they are all based on an 'average' QS of, perhaps, 5 or 6 so, if you can achieve good QS, your actual CPC should be lower.

    BUT, if they are accurate then no, you are not going to make a profit.
     
    bjewelled, Nov 21, 2008 IP