‘Buying Profits’ With PPC. An Example.

Now, I don’t mean this to be mindless self-promotion (although it all helps of course!), but more of an attempt to get some SME’s to think a little more logically about the management of their Adwords campaigns with a short example.

A small trader with a new e-commerce store came to me in February for a quote on managing his Adwords campaign. His store is a (very nicely designed) niche online gift store and he had been managing his own campaign with little success in terms of sales and he had got to that point (that I see very often) where his CTR was almost non-existent, his quality score was poor and his click prices had gone through the roof. His adgroups (and keyphrases) were illogical, his ad-copy all wrong, etc, etc…

His average cost per click was 37p and most of those were not targeted correctly. Suffice to say, he had no REAL idea as to how it was performing other than to say his sales were non-existent.

In short, it was a mess.

Anyway, when I first spoke to him on the phone, in the first minute he said the words that I never, ever, ever understand.

He said something like… ‘well the problem I have now is that I can’t afford to spend much on Adwords’.

Hmmm…

To that I said what I normally say…

[me] ‘OK… well, if you could find a way of buying 50 pence for 40 pence would you do it’?

[him] Err… yes… obviously…

[me] ‘And how much could you afford to spend on doing this?’

[him] *Laughs* – as much as i could buy…’

The Point? Well, if an Adwords campaign is correctly managed, this is possible, and in his case, is actually doing so. Less than 3 months on, his average click price is 24p, but, and here’s the killer part, we know that, on average, EVERY click is making him a profit.

How? Firstly, it’s about knowing how to manage an Adwords campaign (obviously), but less obviously, it is about measuring the performance of your ads and doing so constantly. You can use Google Analytcis to tell you exactly what return in terms of revenue each click gives and so once you have done this, you can see what a click is worth, and if you see what a click is worth, you know how much you will pay. After sufficient testing, If you know that a click on a certain keyword, consistenly results in an average profit of 50p per click, then you know what to pay up to.

So, in summary, if you are inexperienced with Adwords and need a single piece of advice, make very sure that you have installed Analytics and that you KNOW how to measure your campaigns performance.

It can be just like ‘buying profit’.