One part of running a PPC campaign is to determine how much you can spend per click, on average. A simple way to do this is to do the math backwards based on the average value of a sale and your website PPC conversion rate. In this example, if you sell pillows and have an average online sale of $50, you can normally spend up to $2.50 per visitor (assuming visitors:clicks = 1:1, which they never are). So, you need to set spending caps on your PPC keywords to keep your campaign profitable.
Average Sale Value | $50 |
Sales | 1 |
Conversion Rate | 5% |
Visitors Needed | 20 |
Max CPC | $2.50 |
This is a very broad and simple way of looking at costs. In reality, your CPC is going to be all over the place and it's not good enough just to let it run and think everything is fine. Periodically (every 2 to 4 weeks) you should review your CPC and placements to look for ways to bring costs down and increase profits. One way that I like to look at the information, is to use Tableau to compare Cost by Rank. In this way, I can see what placments are more or less expensive, then I can investigate the expensive ones to see if their conversion rates justify their expense.
No comments:
Post a Comment