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I could not possibly afford Google's rates
So how are my competitors able to?
mmmwowmmm

5+ Year Member



 
Msg#: 3133589 posted 5:27 am on Oct 24, 2006 (gmt 0)

I'm having a very difficult time figuring out how to effectively use CPC advertising. The prices just seem unbelievable to me. Google wants me to pay more than 15 cents a click - and when I go below that I can barely get any clicks at all. I sell funny t-shirts, and at 15 cents a click I would have to sell 1 t-shirt for every 50 visitors just to break even, and really I'd have to sell 1 for every 30 visitors to make it feasible. 1 in 30 is not a realistic conversion ratio, regardless of how good the product is. These are t-shirts, an impulse buy, and my profit is about $8 a shirt...

Here's the thing: I have competitors – with very similar products – who are always advertising on Google, showing up in the top 5 slots for keywords that are very expensive (eg. “funny t-shirts”). And they must be making a profit, because they have run these ads month-after-month-after-month. If I tried to run the ad campaigns that they run, I'd empty out my bank account in no time. I just can't figure it out. How are they doing it?

I know your probably thinking “you need to optimize your landing page for your chosen keywords” - but I really have checked out the competition's landing pages, and I simply don't see how they are any better than mine. I don't see what else I can do to optimize my landing page – at least not without compromising the actual quality of the page (it's ironic when you have to lower the quality of your page in order for Google to see it as higher in quality).

And I use hundreds of keywords/key phrases, every combination I can think of, even though many are completely ridiculous (funny dog t-shirts, kill me t-shirts, tree t-shirts, etc.). Most of these get “rejected” by Google in short order, and I'm left with keywords that are either getting very almost no clicks at all, or keywords that they want me to raise to 15 cents a click.

Can anyone tell me what I'm missing? I must be missing something...

Phil

 

webdudek

5+ Year Member



 
Msg#: 3133589 posted 10:15 am on Oct 24, 2006 (gmt 0)

optimization should be done not only on the landing page, but also on the ad.
I had a similar problem and I changed my ad to make it clear that there is nothing free on my site.
I just put the price in the ad. ("this week only $29.99")
The quality of clicks was much better because people that were not willing to pay didn't click.
This way I could raise my bid and get a better position.
I also started using a few ads that were more specific, instead of the general ad I had before.
insead of 'great shirts' I wrote 'great basketball shirts' or 'beautifull Tom & Jerry shirts'.
This was also a good move.
Another thing that you should do is build a list of negative keywords.
Build a list of the keywords that will not bring sales. That will sure help you reduce low quality traffic.

webdudek

5+ Year Member



 
Msg#: 3133589 posted 10:16 am on Oct 24, 2006 (gmt 0)

this thread should move to the adwords forum.

mmmwowmmm

5+ Year Member



 
Msg#: 3133589 posted 8:38 pm on Oct 24, 2006 (gmt 0)

Thanks, webdudek, those are good points, I hadn't thought about that.

And your right, this is really more of an "adwords" question, although when I started writing it I meant to be more broad, but I'll bring it up again on the adwords forum.

suzyvirtual

10+ Year Member



 
Msg#: 3133589 posted 11:29 pm on Oct 24, 2006 (gmt 0)

Also, there are many people willing to lose money on ppc for branding or other purposes, so don't assume your competitiors are necessarily making a profit.

jtara

WebmasterWorld Senior Member jtara us a WebmasterWorld Top Contributor of All Time 5+ Year Member



 
Msg#: 3133589 posted 2:17 am on Oct 25, 2006 (gmt 0)

- Not interested in direct profits, interested in branding

- Affiliates fresh off the e-book boat, willing to plow through some or all of their savings before throwing in the towel. And the boats keep landing. And landing. And landing.

- Using somebody else's stolen credit card. Cost is irrelevant.

trannack

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3133589 posted 9:06 am on Oct 25, 2006 (gmt 0)

i may be wrong, but it sounds like you have adgroups with large amounts of keywords. Try breaking the keywords down into much smaller adgroups, then target the advert specifically to those keywords. For example, say you sell a funny tee-shirt for $8 try making the adgroup something like

keywords: funny tee shirts, fun tee shirts, humourous tee shirts blah, blah - maybe about 20 focused terms/words

Then make the advert very specific to those keywords. For Example

Funny Tee Shirts.
Funny High quality Tee Shirts For Only $8.

Or some such. :)

luckychucky

10+ Year Member



 
Msg#: 3133589 posted 11:07 am on Oct 25, 2006 (gmt 0)

I'm baffled too. You think $0.15/click is high? In my industry some of the hottest keywords are up to $2.50 or more per click, and those terms generate extraordinarily high clickthough traffic, chomping through ppc budgets like a hungry swarm of locusts. When the CPC gets that high, webmasters are really gunning to grab (and create) the traffic. Traffic quality and relevancy be damned; your little ad can really get pumped.

The top 3 AdWords positions are bought up by my long-time-as-brick&mortar competitors. They have deep pockets and are almost certainly subsidizing their AdWords campaigns; knowing the trade as well as I do over many years in it, I just cannot conceive of any way, even remotely, that it could pay off. I can't conceive of any way those campaigns could do anything but drain away an ocean of money.

Never say never, but it seems impossible that in aggregate, those clicks could ever make a profit. Maybe they don't do any ROI tracking, so they just don't realize. Overall, perhaps their businesses are profitable simply by virtue of a large and longstanding stable of customers, so it all kinda just evens out for them.

Thank Google I consistently sit at number one in the organic serps for the hottest keywords in my trade. I'm not just saying it. I've been unmoveable there for a couple of years now: w00t (although at the same time, Yahoo! thinks I simply don't exist, so I'm forced to pay for play there. Aargh. I still gladly give G my money for other campaigns, which total more than Y gets).

BillyS

WebmasterWorld Senior Member billys us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3133589 posted 3:11 pm on Oct 25, 2006 (gmt 0)

I had a similar experience and figured my competitors could do this for one of two reasons:

Higher margins
Better conversion rates

My margin was about $5.00 / item and a competitive bid was around $1.25 for high volume terms.

F_Rose

5+ Year Member



 
Msg#: 3133589 posted 3:16 pm on Oct 25, 2006 (gmt 0)

If you are gaining a customer with Goolge Adwords, and eventually turns out to be a repeat customer it's worth the investment.

netmeg

WebmasterWorld Senior Member netmeg us a WebmasterWorld Top Contributor of All Time 5+ Year Member Top Contributors Of The Month



 
Msg#: 3133589 posted 3:43 pm on Oct 25, 2006 (gmt 0)

One thing you might want to do is pay close attention to exactly what your competitors are doing with AdWords for a week or two (or even longer) - look for patterns.

I have one client in a niche where the words can go up easily to $30 per click. I have basically an unlimited budget, but I don't want to waste their money, because I want to keep their business. So I started watching and tracking what some of their hottest competitors were doing.

In some cases, the competitors would bid really high at the beginning of the month, but they'd start running out of steam by halfway through - their positions would drop lower and lower and then by the end of the month, they were gone. Then they'd show up again the first of the month.

In another case, one competitor's budget and ads would be reserved for showing ONLY during 9-5 business hours (which is a huge mistake for this particular niche, but that's their problem) and they'd disappear for night and weekend searches - allowing us to swoop in and catch all the business they left on the floor - at a cheaper CPC, too.

If you really pay attention to what your competitors are doing, when they're showing in what positions - you could very possibly find the spot where you can wedge yourself in and get a decent return. And all it really will cost you is the time and effort to do it.

wrgvt

10+ Year Member



 
Msg#: 3133589 posted 4:31 pm on Oct 25, 2006 (gmt 0)

Keep in mind that if the competition's ads have been running for a long time, a high CTR history might be driving their click price down.

For example, there was a new product for which I started running an ad a few months ago. Nobody else was bidding for any of the popular keywords for a it at the time. I jumped in with a bid of about 65 cents, even without competition. Traffic and my CTR soon shot through the roof as the product's popularity took off. Now there's a bunch of people bidding on those keywords, and I'm sitting top dog paying 17 cents per click at the moment.

trannack

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3133589 posted 5:13 pm on Oct 25, 2006 (gmt 0)

Exactly. I think you are assuming that they are paying the same or more than you to appear higher - this might not be the case. A good QS on these keywords could mean they are paying significantly less to appear in the top positions.

ccam96

5+ Year Member



 
Msg#: 3133589 posted 5:37 pm on Oct 25, 2006 (gmt 0)

Along the lines of what a previous poster mentioned. Make sure you use negative keywords liberaly such as -free, -cheap, etc. in order to weed out the tire kickers. This will also improve your CTR by eliminating these non-converting , junk impressions which will thus lower your cost. Google really does make it possible, it's just that you have to listen to them and follow suggestions.

flanker23

5+ Year Member



 
Msg#: 3133589 posted 5:52 pm on Oct 25, 2006 (gmt 0)

My advice, dont bother with the big G. You can spend half your life getting a good position in either organic or ppc then they go and change the rules to extract more money from you and your back to where you started. Do yourself a favor and try Yahoo and MSN - at least there affordable.

chewy

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3133589 posted 6:03 pm on Oct 25, 2006 (gmt 0)

focus on bulk sales or repeat customers only if you can - or focus on a niche that no one else is into yet...

one of my students did really well with custom printing of shirts / sweats / etc for the local frat house parties. Repeat customers doing bulk purchases. SWEET.

there are clearly opportunities that the other guys (who don't seem all that smart) are missing!

AdWords is a great place to learn, learn, learn. Paying to learn is a good thing (to a point...)

What you learn there apply to organic stuff.

Make sure you install conversion tracking, and Google Analytics too.

trinorthlighting

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3133589 posted 9:35 pm on Oct 25, 2006 (gmt 0)

I gave up adwords a while back.

Instead of spending $5-10 a day with adwords, I am making $5-10 a day in adsense....

My take, invest your money on serp ranking, not on adwords...

aeiouy

5+ Year Member



 
Msg#: 3133589 posted 3:33 am on Oct 26, 2006 (gmt 0)

This is very easy for me to tell you what could likely be happening and what you need to determine about your own business.

How much is a customer worth to you over their lifetime? Do you know how much revenue the average customer will provide you in their lifetime? How much profit?

If you don't know how much that is, you are at a HUGE disadvantage. Counting your adwords marketing directly against a single sale is not very productive if you run a business where you have repeat and potentially loyal customers.

If you discover your average customer provides you with $350 revenue and $175 in profit in the next 5 years, how much are you willing to spend getting that $175? I hope it is more than 15 cents. If you know 1 out of 200 of your Adword customers become long-term customers, you just spent $30.00 to make $175.00 over the next 5 years.

Why do you think some companies spend 100s of dollars going after new customers (cable companies, satellite companies cell phone companies?). All of them pay much more for a new customer than they make on the sign-up, first month or first year even. Obviously those are subscription based businesses, but the principle is the same. My family used to own a regional chain of grocery stores. We knew each new customer we got to regular shop in our stores was worth $50,000 in profit in their lifetime.

How much is your customer worth to you? If all your customers only buy one t-shirt and never come back again, then you are managing things properly. If not, well take a deeper look.

mmmwowmmm

5+ Year Member



 
Msg#: 3133589 posted 1:31 am on Oct 27, 2006 (gmt 0)

Well that's a lot to think about. A few responses:

About people branding their items - I'm sure this goes on, but I tend to think it's not all that much of a factor with these particular sites. These are small sites that don't seem to get a whole lot of traffic or web mentions. In fact, it appears that the monster sites use almost no paid advertising at all, but rely on natural search results and affiliate programs.

jtara said:
"Affiliates fresh off the e-book boat, willing to plow through some or all of their savings before throwing in the towel. And the boats keep landing. And landing. And landing."

Yes, I've watched them come and go, but there are the few who continue to advertise. Even if this is the case with all of them, it still mystifies me that the click costs would be so high... would the market still naturally settle into a somewhat reasonable cost?

trannack said:
"I may be wrong, but it sounds like you have adgroups with large amounts of keywords. Try breaking the keywords down into much smaller adgroups"

I've started doing this, and for some reason the estimated cost-per-click rates stay the same, even when I spread them out. I don't know what I'm doing wrong, but the cpc seems to stay the same no matter what I change.

For example: I have a keyword group that centers only around the words "funny, fun, humorous, tee, t-shirt, and shirt", and the ad I write uses those same words. Then I send it to a landing page with those words in the title, the metatag keywords, the page text and the links leading into that page.

Then I create another campaign that in which none of this is true - the same keywords, but completely irrelevant ad text, and a landing page that is about gardening. And, I kid you not - I get the same estimates. It's insane. Does anyone know a possible answer for this?

flanker23:
"My advice, dont bother with the big G."
"Do yourself a favor and try Yahoo and MSN - at least they're affordable."

It's true, I haven't tried them, but I was not under the impression that they were cheaper. I figured I'd get G figured out, and then expand to the other big ones. Are they actually cheaper?

trinorthlighting said:
"My take, invest your money on serp ranking, not on adwords... "

At this point, trinorth, that idea is looking better all the time.

This is where I'm at now: I haven't given up on adwords (I'll do anything to get traffic if it's feasible) - but I'm putting a lot more thought into my affiliate program. I mentioned before that this seems to be what the more popular sites are doing.

I had this idea that if I spent X amount on ads, and could turn an immediate profit by actually converting those clicks into sales, then I could safely advertise as much as the market would allow. I now think that this was a little naive, and of course it goes way beyond just playing with numbers.

The one thing that is going well - though very slowly - is that I'm building relationships with other websites and blogs and what-not. My customers do come back, and it is building. There are individual websites with in-house advertising that, considering their user base demographics, look promising...

I'm rambling. Thanks for all the advice, everyone, I'll try out what I can.

Thanks,
Phil

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