Quote:
Originally Posted by WutRUTryin2Hit
(I hope it's cool to ask this in this thread, I have read most of this thread today and it is clearly not about the OP anymore, but I'm not sure if this is on-topic).
Does anyone have an opinion on how many campaigns in AdWords are actually losing money? I have had chances to run AdWords ads a few times in the past (promotional offers from Google giving me $75 of ads, also ran some a few years ago for my main site, etc), and they have not only been -EV but WAY WAY -EV.
Now, the products I was advertising were quite badly suited for AdWords (low-priced, nichey), I wasn't shocked that the ads performed horribly, but I am very close to launching a new site and I'm trying to figure out the best way to get the word out.
My site is a high-quality web service (somewhat in the vein of the products 37signals.com put out), with membership plans that run from $5/mth to $100/mth, although I think the avg subscriber will be on the $10/mth plan, the $100/mth plan should only really apply to a very small amount of users (it is there because competitors have it, and as a general pricing strategy).
For my main keywords, Google is telling me it'll cost $1.25 to $3/click, which seems very high. I feel like even with an awesome conversion ratio this will be -EV, but maybe I am just being cheap. Anyone have thoughts on this? (It's obv. be easy if I knew conversion rates and avg. lifetime of a customer, but I can only guess at these, having not launched).
Read this book before you spend another $1 on adwords.
http://www.amazon.com/Ultimate-Guide...dp_ob_title_bk
If your conversion rate is 10% and you're spending $3 a click, that's $30 a conversion.
If the average user stays subscribed for 6 months, that's $60 revenues.
$60 revenues - $30 advertising = $30 revenues net of advertising expense.
That said, I'm sure you can find more specific phrases in the $0.15-$0.50 range, that will probably convert at higher rates.
Higher Click Through Rates move you up higher on the results and lower your costs per click, as Google rewards ads that are most relevant to the users.