The Big Mistake In Calculating If Adwords Ppc Is For You-rainlendar

Internet-and-Business-Online Let’s say that your PPC search stats look good and it seems your campaign is going well. CTR is excellent, your keywords and ads are working, conversion rate is good. So, too, are your conversion costs. And, as far as you’re concerned, PPC is making you money. But by taking these results at face value you can get the wrong impression. Because you can be making a key mistake when interpreting these. The criterion of success for PPC search is whether it can meet your goals profitably through conversions. For instance, you may be looking for sign-ups to build a mailing list. Or trying to generate leads. Or selling online (e-.merce). No matter. In all cases, these goals are about converting visitors into prospects or customers. So, the decision to use a PPC strategy is about the value of each conversion to you. And the amount you have to spend in advertising to get it. THE CONVERSION RATES TO EXPECT Although Google does this for you, here is how to work out the average cost per conversion. Divide your total costs per click (CPC) by the number of conversions. Let’s say you spend $1200 on paid search clicks and you get 20 conversions. That makes your average conversion cost $60. In short, the cost to you of each sign-up to your mailing list, or each lead generated, or each sale is $60. Of course, the conversion rates you can expect from your keywords and ads are important. Unfortunately, there is no precise formula. And rates vary across industries. It also depends on the quality and nature of the offer you’re making. But here are some general guidelines. Especially if you are giving something away, sign-up conversions can be very good. In my experience, you can have very high rates, but I think that up to 10% is a reasonable guide. Lead generation is lower, 2-4%. E-.merce can be as little as 1-2%. Imagine you are in e-.merce. You are paying $1 per click and getting a 2% conversion rate. The out.e is that the cost of each sale is $50. Assuming your average basket or sales value is $50 or more, you would appear at minimum to be breaking even. THE BIG MISTAKE But the assumption you’ve just made may not be accurate. Many advertisers make the big mistake of just looking at sales value. They forget that this is not their profit. Let’s say the basket value is $50. But supposing your actual profit on the sale is only $20. So, for every $100 you spend in PPC advertising, you recoup only $40. Your ppc campaign has made a loss of $30 per transaction. If you count just the profit, as you should, then at $1 CPC to breakeven you would need a basket value of $125. Of course, these figures are generalisations, but they should prompt you to look again at your results. If it turns out you are making a loss, don’t panic and quit using ppc. THE SOLUTION It’s likely that you could perform a lot better. Partly because thinking your results were OK created a sense of .placency and this allowed your campaigns to drift. So, take a fresh look at your whole approach to your pay per click. If necessary, revise ppc strategy. If you’ve been using a management .pany consider firing them. Because a good professional would have brought this matter to your attention from the outset. With good PPC management, ongoing optimisation and improving the quality score on your keywords and ads, you could cut your CPC and improve conversion rates. And perhaps then transform your PPC marketing into a profitable strategy. About the Author: 相关的主题文章: