Is my PPC cost too high?

[spidey983]

Hi Everyone.

For one of my online stores, PPC cost (Google Adwords) is about $200-300 a day.

Google recommends $300 - 500.

I don't run it for the entire 30 days because I really do feel the pinch sometimes. So my monthly PPC cost is around $5000.

Net profit is around $2500/month excluding repeat businesses. Maybe around $5000/month if I include repeats but I am not sure.

This site has minimal SEO done. So I know all the businesses are from PPC.

Problem is I always find it hard to pull the trigger when it comes to PPC. Feels like something is wrong if I have to pay Google so much.

Sometimes Google recommends $500/day to maximise my sale opportunities.

Questions is, should I go ahead and just put $15k/month into my Adword account and hope for the best?

 

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[deepestblue]

With PPC and tracking analytics you can know your exact conversion rate. If repeat buyers initially came from PPC they can reasonably be included in your analysis depending on how you want to look at the #s. You don't mention your Cost Per Click here but you can determine your Breakeven CPC by multiplying your conversion rate by your gross revenue per transaction. Advertise at a CPC below this breakeven CPC to be profitable.

 

[bwalklet]

Is your conversion rate steady? Do you continue to optimize your campaigns? i.e. delete unprofitable keywords, write new ad copy, add negative keywords, split test your landing pages?

If you are doing all of the above, then I think you have nothing to lose by increasing your PPC budget. You could even start increasing it just a little bit for a week and see how it changes things. You could even switch to CPA bidding (I'm assuming you have more than 15 conversions/sales a month), so you will be able to easily manage how much you are putting into PPC to acquire a new customer.

Also, you might want to check out the "conv rate (many-per-click)" section under your networks tab. You can add the column by clicking "columns" and then "customize columns."

 

[spidey983]

Is your conversion rate steady? Do you continue to optimize your campaigns? i.e. delete unprofitable keywords, write new ad copy, add negative keywords, split test your landing pages?

If you are doing all of the above, then I think you have nothing to lose by increasing your PPC budget. You could even start increasing it just a little bit for a week and see how it changes things. You could even switch to CPA bidding (I'm assuming you have more than 15 conversions/sales a month), so you will be able to easily manage how much you are putting into PPC to acquire a new customer.

Also, you might want to check out the "conv rate (many-per-click)" section under your networks tab. You can add the column by clicking "columns" and then "customize columns."

I never really monitor the statistics. Partly because I am lazy. Partly because I am hoping it is not necessary.

I think my conversion rate differs from month to month. It's a bit of a gamble.

Can we conclude that we should at least keep it going every day of the month at $300/day without further statistical analysis? Or no one can decide for me other than myself.

 

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[bwalklet]

While it's good to not get boggled down by all of the data, you should definitely invest 15 mins of your time setting up conversion tracking. It is baffling how many PPC advertisers don't do this, and I think this is the one statistic you should be focused on if you are too lazy to look at the numbers.

With conversion tracking setup you can then do CPA bidding. In other words, tell Google the maximum amount you are willing to spend on a new customer, and they will make it happen (or at least get pretty close to making it happen).

There is always plenty that can be done in PPC to improve your ROI. Maybe consider hiring a PPC manager. Many charge 10-15% of monthly ad spend, which may be a worthwhile investment.

Bottom line: Setup conversion tracking....give a higher budget a test run....and adjust accordingly.

Good luck!

 

[spidey983]

While it's good to not get boggled down by all of the data, you should definitely invest 15 mins of your time setting up conversion tracking. It is baffling how many PPC advertisers don't do this, and I think this is the one statistic you should be focused on if you are too lazy to look at the numbers.

Is it easy to set up? It includes putting codes into the website?

 

[spidey983]

Maybe consider hiring a PPC manager. Many charge 10-15% of monthly ad spend, which may be a worthwhile investment.

What can PPC Manager achieve for me?

 

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[bwalklet]

It's pretty easy to setup. Google provides you with the code, and you just copy and paste into the html of the page your customers see after they've made a successful purchase on your website.

A good PPC manager will essentially make changes to your campaign over time that are aimed at reducing your spending and helping you achieve higher conversion rates.

It is very likely that you are spending more than you need to with AdWords upfront, in fact, almost everyone does initially. It is through campaign optimization that these costs are gradually reduced, and this is how a PPC manager could be beneficial to you.

Most people who try PPC just setup the campaigns, and then leave them unchanged for their entire duration. This is a big mistake, as there is always room for improvement.

Hope this helps.

 

[Sasha]

So you're concerned about the amount you spend on PPC, yet you can't be bothered to look into how effectively it's working by checking out the data? Interesting....

Anyways, bottom line... spend 5k, make 2.5k in profit. Unless the more you spend =/= the more you profit or profit that has an acceptable ROR (which you would need the numbers to know), I don't see what the problem is. I'd be PPC'ing my way to the bank.

Viddler.com - Jay Abraham Part 4 - Uploaded by richschefren

Also, a PPC Manager will look at the data and do things like run split tests on different price points, site layouts, and etc. to increase conversions as well as strategize on ways to reduce your Adwords spend.

 

[spidey983]

So you're concerned about the amount you spend on PPC, yet you can't be bothered to look into how effectively it's working by checking out the data? Interesting....

I know how effective it is working. Just not the exact stats.

Anyways, bottom line... spend 5k, make 2.5k in profit. Unless the more you spend =/= the more you profit or profit that has an acceptable ROR (which you would need the numbers to know), I don't see what the problem is. I'd be PPC'ing my way to the bank.

If everything is that simple, you would be rich.

 

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[Sasha]

Lol... okay.

Hope you at least watched the video.

 

[biophase]

I know how effective it is working. Just not the exact stats.

If you did, you would not be asking that question. The truth is you initial post is basically saying that you don't know if PPC is working. Because if you did, you wouldn't leave that money on the table.

If you spend $5000 and make $2500, will spending $10000 make $5000? You don't know. You don't know where your curve will start to go down. Let me ask you this, why would you stop your PPC in the middle of the month just because you "feel" like you are spending too much money? Does your store stop making money once you turn off your PPC?

You don't really even know if your business is coming from PPC. You say it is, but how do you know without tracking analytics and goals. I can tell you that I had 500 clicks from keyword 1 at $0.06 a click today. I can also tell you that I made 5 sales from those 5 clicks profiting $130. So I spent $30 today to make $130. Why would I not spend that tomorrow?

This is where a PPC coach can help you. You are probably overbidding on your terms right now. You could probably increase your quality score on your pages too.

Honestly, your answers on this thread and on the other one do make me wonder. I get this feeling that you ask questions but then seem to feel that you know it all when people answer.

 

[RazvanRogoz]

I'm not 100% positive, but I think Google sends you better leads if you have a higher budget.

 

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[spidey983]

Hope you at least watched the video.

I am going to watch now. Thanks for the link.

 

[spidey983]

Honestly, your answers on this thread and on the other one do make me wonder. I get this feeling that you ask questions but then seem to feel that you know it all when people answer.

I'm just a bit confused and was trying to express whatever that is on my mind. And it's the first time I joined and post on a forum. So I'm not sure what to expect or how to respond.

Of course I don't think I know it all. Otherwise I would not be humbly asking for advice here.

Perhaps I am being misunderstood here. If I offended anyone, I am sorry.

As for the other thread, it's related to a personal matter that has been a pain in the a$$ for me for some time. So I couldn't help being overly sensitive to everything that was posted there. Again, my sincere apologies. I have tremendous respect for many of you here. I really did not mean to be disrespectful.


"Let me ask you this, why would you stop your PPC in the middle of the month just because you "feel" like you are spending too much money?"

I stopped because sometimes there are no sales for a duration of 2-3 days. And I 'feel' that I should stop. It's my weakness. I let 'feelings' affect many of my decisions and responses. That also explains why a few of my prior posts sounds hostile.

I do believe in tracking analytics. But for some reason, e-commerce seems tough to me.

 

[Gold777]

Hire someone who can manage your AdWords account that knows what they're doing. I don't think, but I know you are wasting a ton of money unnecessarily, a good fraction of it at least. AdWords is a lot more than choosing random keywords and dumping a huge amount of money into it hoping for results. If you're getting a few sales a day then great, but you could also either be increasing your sales if you get your AdWords account optimized or saving money by getting rid of bad keywords that you don't need, and using more cost effective methods of advertising.

It seems like you have a pretty good business going, really I can't stress it enough, take some of that money you're bringing in and use it to hire a professional. It will be worth it in the long run, you might end up saving a lot more than you bargained for and it will just be a slap in the face when you find out how much you've been wasting.

 

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