Questions about CPC and Adword

Hey guys,

I got some questions about PPC and AdWords,

1/ I'm working for a video games publisher, do you think that it could be interesting to do an AdWords campaign for a video game? If yes, why?
2/ Is adwords doing some CPA or just CPC?
3/ About CPC, do you have an idea of the conversion rate? I know it depends of a lot of things like the landing page and so on but could you give me some range?
4/ About bidding, I want to be in Google first page but I don't know how much money I need to bet to do so, do someone has an idea how can I get this info?
5/ What's the math formula to know if you ROI is positive? The video game we're trying to sell cost $25. I think that I need to know our operating margin and CTR, unfortunately, I don't know our CTR because we didn't run any campaigns so it will be our first campaign. Is it correct that to calculate my MAX CPC I need to apply this math formula? (OPERATING MARGIN x CTR) x 100. If my CPC > Max CPC so I will lose money. If my CPC < Max CPC I will earn money. Am I correct about that stuff?
6/ About CTR, what kind of A/B testing can I do to test different ctr?

Thank you so much guys.

PRM

 

1. Every product and service needs to be advertised. Otherwise, nobody is going to find out about it and there will be no sales. Adwords is just one form of advertisement. Given you are selling video games, most of your prospects likely have computers and are not afraid to use them, they likely search on Google, Bing and other search engines as well as surf to sites about video games. So yeah, PPC is a great advertising media.

2. CPC only.

3. Conversion rate is more dependent on the landing page. A small ad cannot and should not close the sale. That's not it's purpose. By definition, a conversion rate is anywhere between 0% and 100%. Nobody gets 100%, that's not realistic. Many achieve 0% or close to that because they don't know their audience properly.

4. Neither do I because I've never done a campaign for video games. There's a tool called Google Keyword Tool in Adwords which can offer insight.

My recommendation is start a campaign and bid what is recommended. Then, try to improve the campaign which is mostly trying to increase your ads' click rate. There's something called Quality Score that affects your position and what you pay. You need to compete and if you bid half what others are, even with a great QS of 10, depending on how many competitors there is, you'll likely show at the bottom of the page. That will affect your number of clicks and ultimately your number of sales. So bid the going market value, work on improving your campaign to increase QS to lower costs.

5. Quick and dirty ROI = revenues / cost of advertisement. This is really the ROAI, return on Advertising investment.

True ROI actually must take into account your cost of purchase. So if you buy a video game at wholesale for $10 and sell it for $25, the NET revenue is really $15. If you are actually the manufacturer, figure in whatever costs goes into producing that game. That could be quite involved: programmer salaries, equipment, utilities, shipping, production cost (although these days digital media is downloadable but still, that web site cost something).

No matter what, at the end of the day you want to make a profit. So you want revenues to be higher than all costs incurred, including advertising in whatever form.

6. I don't understand. You should always be A/B testing and that means start with two ads. Once you have enough statistically significant data, pause the lower performing ad and replace with a new ad. Repeat.

 

Thank you for your very detailed answer.

There's still something that I don't understand. If I pay with CPC, I don't care if my ad is shown on the top or on the bottom of google search because I will only pay when customers will click on it. What do you think of it?

 

Thank you for your reply,

I'm hesitating between Google Adwords and Facebook ads, what do you think of both? Which one is the best for me?
I used Google Keyword planner tool to take a loot at keywords. We're making an Horror game and it seems that the competition is pretty low for ''Horror game''. The suggested bid amount is $0.5. What do you think? There's an average of 350.000 searches every month related to those keywords.
How can I increase my ad click rate? By being on the top on the page and writing appealing ad?
How can you sure that you will be the first one on the top of google page? I don't want to pay and to be at the second page or at the bottom of the 1st page.

Thank you again.

prm

 

There is no better time to catch a prospect at the very moment they are looking for you. That's what Adwords PPC is. People search for things and when they are searching for what they want, you want to trigger your ad on those keywords. There's never been an advertising medium like it. Prospects by their search keywords are saying "I'm looking for" and your ads at that moment are saying "here we are".

Every other advertising medium like radio, TV, newspapers and magazines, is more like "when you are in need of x, give us a thought". That's what ad networks like Facebook do. Sure, there's a twist in that you can target them. But the thing is that it is soft targeting in most cases. I'm a baseball fan, I might even say on FB that I follow a certain team. But doesn't mean I am interested in team apparel or even equipment (I don't play) at every mention.

Not that there's anything wrong with that but it has to be done right. It doesn't mean that one is better than the other. Adwords' does have a display network to achieve the same thing and there's hundreds of other ad networks.

It has to be done right. You want to target those interested in playing games, more specifically horror games. If possible, you need to reach those with that specific interest. It's where you will get the best response. The next best thing are those with an interest in games with the hope that some may be interested in your particular genre.

 

Thank you so much for your answer,

I got a last question, is it worth it to spend $1000 in a Adwords campaign just to test it?
We would like to test a small budget ($1000) before spending more.

is it possible and worth it?