Andy Black
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Hi,
I am trying to figure out the return of PPC with Google Adwords .
Say we use [coffee mugs] as our keyword which has an average monthly search of 27100
Where I get stuck is how do I ‘estimate’ the traffic to the site from a Adwods campaign?
Say I enter a bid of AU$1.0 which gives me 8.19 clicks/day
If we assume 1% conversion, which means I need 100 clicks/sale, it will take me 100 clicks/8.19 = 12.2 days to do 1 sale (with the current bid of AU$1.0)
My adwords cost for one sale is then AU$12.2
Is the above assumptions correct??!!
Also, what role does Ad position play?
In the above example the ad position is 2.86. If the bid is increased the Ad position goes up but so does the clicks - Is the Ad position already taken into account for the estimated clicks for a certain budget?
Thank you,
j
I presume you're using some Google traffic estimator.
Bear in mind that the numbers aren't very accurate.
I've just used used the Google Keyword Planner to pull back worldwide numbers for search term [coffee mugs].
Location = Everywhere
Monthly Estimated Searches = 27,100
Estimated CPC = €1.55
Here's the thing, that CPC is going to vary wildly from country to country.
So instead, use Australia as your location.
Location = Australia
Monthly Estimated Searches = 880
Estimated CPC = €1.27
Right... the Estimated CPC is for the top ad positions, you can bid less and appear in lower ad positions and not pay that much CPC.
The more you bid, the higher your ad position (where higher means higher on the page).
The higher the ad position, the higher your CTR (since more people look at the ad)
... and the higher your impression share (since there are less advertisers competing for the higher ad positions).
Rules of thumb:
1) If you're in a low enough ad position to start with, then doubling your CPC will quadruple your clicks (and increase spend by a factor of 8!). This is because you'll get a boost in CTR by being in a higher ad position, and you'll also get a boost in Impression Share.
2) Ad CTR is about 70% of the ad above it. So if you're ad is two positions below someone elses, then you're getting about 50% their CTR.
3) Your Ad CTR is 25% that of your competitor when you move from position 3 (bottom of the top 3 when there's a full complement of advertisers) to the top position on the right (position 4 when there's a full complement of advertisers).
4) Being in position 1 when there is a full complement of advertisers (the top ad position of the 3 above the organic listings) is therefore about 8 times the CTR as being in position 4 (top right when there's a full complement of advertisers).
(I'll add graphics another day... I'm in a rush to just post this).
These were the rules of thumb I used a while ago. Google has introduced many features to improve the CTR of the ads in position 1 - sitelinks, extended headlines, sitelinks that are "stacked" rather than in a row, etc. Smart move by Google, as it creates a bidding war for position 1. Sneaky feckers...
If you're bidding on your own brand, then expect a CTR for being in position 1 of 40% to 60%. And CPCs to be tiny as a reward. (Note: make sure you bid on your own brand to protect it, and track branded searches over time. You'll also be able to change the copy quickly for new offers, or testing.)
If you're in position 1 for non-branded searches, then you should be gunning for a CTR of maybe 20% to 40%. I'm hitting 30% for "washing machine repairs" types of searches in Dublin.
Sooo, if position 1 is 20%, then position 3 below it could be 10%. If think that's quite high and might estimate 5%.
So for your scenario, in Australia, I'd estimate that the CPCs are for position 3, and that you'd have a 5% CTR for that position, and a 100% impression share.
So your ads would show 880 times out of the 880 searches (that's the 100% impression share).
And I'd estimate a 5% CTR, to give 44 visitors (clicks).
At €1.27 each.
Except I don't bother doing this.
I just load up the campaign, and count impressions, calculate available searches based on impressions divided by impression share, get actual ad position for various CPCs, get ad CTR and those ad positions.
Adjust bids so you're breakeven, then start raising them and trickling more and more traffic through your funnels to find your leaks.
Keep fixing leaks, and keep pushing bids.
It's a continuous cycle of improvement.
It starts with my motto of "Launch and Learn".
Hope this helps.
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