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What AdWords budget per day is normal for starters?
AdWords budget per day
thetmz




msg:4315214
 1:04 pm on May 20, 2011 (gmt 0)

Hello,

I am running several e-commerce projects and most of them suck on generating sales through AdWords.

I have also hired several companies for managing AdWords campaigns and generating sales. 0 Results. The last of them said that the budget was too low for any sales to happen.

Well, it was pretty low - X euros a day. Targeted countries: US/UK (the project is from European Union). The project was related to designer furniture, which is a "expensive" niche. Then I said ok, let's promote only a single product from that shop via AdWords with that budget (the single product was a best seller) - yet no sales at all.

We've tried Image Ads, Contextual Ads etc. I've seen all the keywords, titles, descriptions - nothing.

Do you think if it was X*Y euros a day it would change the situation? Maybe a little. But then how do you manage the ROI?

Gentlemen, if you manage e-commerce store with non-virtual goods, please share your AdWords budget and tell me if it works well for you.

Appreaciate your help.

[edited by: thetmz at 1:58 pm (utc) on May 20, 2011]

 

netmeg




msg:4315250
 1:51 pm on May 20, 2011 (gmt 0)

Sharing budgets does no good at all. The budgets I have for widgets that cost ten dollars are vastly different than the budgets I have for widgets that cost $9000.

When you're starting out, you have to figure that you're going to be paying a little more at the beginning. You don't necessarily know what your CPC will have to be to be competitive, and you have to give Google time to settle on a quality score for you. So you might have to goose your budget and your CPC a little to let things run so you can see where you'll need to be in order to be profitable.

If you set the budget too low, then Google simply won't serve your ads. For example, if your average CPC is $2.75, but your daily budget is $5.00; it's unlikely Google will serve your ads very often because they don't want to risk over-serving you. You have to give them room enough to work, and that's not room enough.

If you can't budget yourself for at least ten to twenty clicks per day at whatever the going rate in your market, then you're probably going to have a problem. You might get one now and then, but it'll be pretty sparse.

wheel




msg:4315259
 2:03 pm on May 20, 2011 (gmt 0)

Yes, you should allocate a budget above and beyond what you expect to pay long term - there's some upfront costs. If nothing else, you need to spend heavily the first little while just so you have data and can test your campaign to fine tune it.

To look at it another way, your spend is going to be # of clicks X CPC. But your CPC initially will be way high, and you need a lot of clicks to get the data to be able to get a lower CPC.

Longer term, once you've got your bid amount/cpc low enough then your decision can be just how much you want to spend in a day, but upfront, you just need some sunk costs in there to get the data. Pay for it.

When I run adwords campaigns, I spend $200/day on mine. It's worth it. I've spoken to some competitors who are horrified, like that's a gross amount of money. I can get most of the impressions at around that level, as long as I have a strong campaign. OF course that won't help you without knowing my location and industry :).

thetmz




msg:4315261
 2:06 pm on May 20, 2011 (gmt 0)

Thanks for the tip. I've deleted the number.

I can budget this project if at least we had 2% or more conversion rate. But it never happened for half a year.

RhinoFish




msg:4315269
 2:11 pm on May 20, 2011 (gmt 0)

"yet no sales at all"
how many clicks?

and when you say "no sales", are you 10,000% sure your tracking works properly? there are many ways to track, and all have various pitfalls you need to look out for.

"We've tried Image Ads, Contextual Ads etc."
good gawd, are you running display network campaigns (or combined search + display)? with your budget, start with search only.

too low, like netmeg said, you may not run. but, since this is new / not converting, and your budget is low whether it's 20 or 200 per day, i'd say lean towards the lower end of that. a higher budget means you get the data sooner, but you may have issues to discover. lower / slower gives you more time to solve those issues...

jecasc




msg:4315292
 2:32 pm on May 20, 2011 (gmt 0)

For me the daily budget limit has nothing to do with managing my campaign - it is simply a safeguard in case I make a typo and accidently bid 10$ on a keyword. So I only loose 100$ in one day and not 1000$.

If one out of 100 visitors buys and you limit your budget - all that happens is that instead of having 100 visitors in one day and making one sale a day you will spread out the 100 visitors to 10 days and only have one sale in 10 days.

The only reason I can think of why you would limit your daily budget is that you have a limited capacity and can only manage x orders a day and without the limited budget you would not be able to fulfill all orders.

netmeg




msg:4315313
 2:50 pm on May 20, 2011 (gmt 0)

Nine times out of then when I hear stories like yours from clients, it's because their campaigns are not well organized and their keywords are too broad.

thetmz




msg:4315630
 8:21 am on May 21, 2011 (gmt 0)

Hi everyone, thank you, I appreciate all your replies.

Firstly: Yes, we were running search display ads separately from graphical ads via managed placements (relevant sites).

Through the whole period we had >2k clicks. Most of them were from graphical ads with no conversions.

While running Google search ads - bounce rate goes up north. I think the very true fact is what you were saying - that campaigns were not well organized, keywords were bad. The problem is that there are many different products on site so keywords were very "generic", for the whole niche instead of product.

"If one out of 100 visitors buys and you limit your budget - all that happens is that instead of having 100 visitors in one day and making one sale a day you will spread out the 100 visitors to 10 days and only have one sale in 10 days. "

You are very right. Now, think in terms of ROI. For instance if 100 visitors cost you i.e. $250, and you make one sale per day, where your margin is $60. Is it worth doing so? You will have to go out of business in a short time.

alexsel




msg:4315869
 6:04 am on May 22, 2011 (gmt 0)

If you don't mind me chiming in here. There's lots of details about your situation that us members are oblivious too. One thing that I always consider when taking on new PPC accounts, is if the product/service is marketable using that channel. Paid search isn't for everyone, yet we seem to have forgotten that. High end designer furniture is not going to deliver a 2% conversion rate, unless you have an extremely well known and respected brand and/or an outstanding e-commerce site.

People like to do a lot of comparison shopping in this area. And generally, they'll just do a lot of research, then go to a brick and mortar location to try it out only to repeat the same process, over and over again, until after several clicks on your ad, they decide to go to the furniture store around the corner. This is why paid search can be very damaging if you don't set the right expectations.

Your budget is only going to affect how many clicks you receive in a day and yes, if set low, it will likely not give you any indication of performance. Over time, however, it will start telling you if you are answering the questions people are typing in the search engines. One advice is to tighten up your ad copy, you almost want to dissuade people who are early on in the search funnel. Start bidding on exact terms instead of broad so that you're in control over when your ad is showing. Scrap the Google Display Network unless you're eager to burn through your marketing budget more quickly.

I'm assuming your average margin per sale is more than $60. Otherwise, with a $2.50 CPC, you would need a conv. rate of around 4% to stay ROI positive. That sounds like a challenge to me.

scooterdude




msg:4315899
 12:39 pm on May 22, 2011 (gmt 0)

its very possible that your site and sales setup is poor at converting leads to sales

i tried running adwords a while ago and nothing worked , i blamed my budget, adwords, my adverts till i shut down the campaign an discovered that the conversion rates where not good on organic traffic either.

since then I've worked on the customer experience an conversions are climbing

my 2 c

thetmz




msg:4316013
 8:16 pm on May 22, 2011 (gmt 0)

Thank you guys. Yes this is what I was thinking all the time - adwords doesn't fit all cases.

I am just curious to exclude the best selling product from that project and create a separate e-commerce project for it. And then run AdWords at full speed, for that product only. Maybe it would change the game.
By the way - the competition for that product is huge. I am not sure if AdWords is the best choice for it as well. If I showed a product to anyone interested in PM would you be able to at least tell me if it's adwords "suitable" or not? (Of course you unable to do that accurately without trying but maybe experience talks best?).

piatkow




msg:4316192
 10:44 am on May 23, 2011 (gmt 0)

Another risk on a low daily limit is that conversion rates may vary by time of day. If your clicks are more likely to convert in the evening you may use up your budget on low (or non) converting clicks earlier in the day.

Novus




msg:4316257
 1:43 pm on May 23, 2011 (gmt 0)

I am by no means experienced with adwords at my current company i was seeing over 2000 clicks per month generated by a 150 per month budget, which was a nice amount of traffic the biggest problem was the site, it just isnt good enough to convert them.

thetmz




msg:4316264
 1:52 pm on May 23, 2011 (gmt 0)

Great. Thank you once again. Who of you could comment on the product, if it's AdWords "suitable". I could send the link in private. Thank you.

engine




msg:4316265
 1:57 pm on May 23, 2011 (gmt 0)

>the biggest problem was the site, it just isnt good enough to convert them.

That's another point worth noting. A bad landing page will lose the prospect of an order.

In addition, with competitve lines, many people price match. Having found your product line, they zoom off to compare elsewhere, and you lose a sale. To help to understand that, have you carried out some marketing to compare your offering to the competitors' offering?

thetmz




msg:4316284
 2:14 pm on May 23, 2011 (gmt 0)

There is nothing wrong with the site or landing page. You can always increase the conversion rate by upgrading user experience etc. But this is not the case. This is not a product for $10 where you can by in a gazillion other stores. This is more unique and niche product.

Competitors's offering is some sort of similar in terms of visualization. But they have many big brands in one place. That's it. You can do e-marketing pretty easily through AdWords while selling "big brand widgets for less plus free shipping and a carrot" - and you will win some customers for sure. We are talking here about unknown brand (or very well known in a small region) and product.

netmeg




msg:4316353
 4:41 pm on May 23, 2011 (gmt 0)

Ok, well, there's one thing about unique and niche.

Do people already know it exists? i.e. are they definitely searching for it, or what it will do?

I've had clients with some really interesting new products, that probably would sell if people knew to search for them - but they didn't, so that means AdWords in search wasn't a good use of their resources.

(And if I were you, I would not offer to share your details in PM. Just sayin')

thetmz




msg:4316405
 5:50 pm on May 23, 2011 (gmt 0)

Thank you, netmeg! Appreciate your comments. I don't mind sharing the product link..

The product is kinda unique in it's form / placement, not in it's function. So yes, people are searching for it.

What did you do for your clients when AdWords wasn't the best choice for them? How did you promote the project?

I think we can all name the very basics for each e-commerce startup:

1. link building (white hat comments, active forum'ing etc)
2. featured posts by bloggers
3. PR in offline and online media (big media)
4. banner exchange
5. affiliate programs (for more mature businesses and not very good for niche / unique products)
6. social media campaigns + paid advertising
7. you name it.

jecasc




msg:4316873
 2:23 pm on May 24, 2011 (gmt 0)

You are very right. Now, think in terms of ROI. For instance if 100 visitors cost you i.e. $250, and you make one sale per day, where your margin is $60. Is it worth doing so? You will have to go out of business in a short time.


But the cost for the 100 visitors will be 250$ - regardless in which time those visitors come. The 100 visitors and one sale will cost 100$ in 1 day or in 25 days - does not matter.

Let's say you limit your daily budget to 10$. This means in our example that you will have 100 visitors and 1 sale spread out to 25 days since your ads will stop displaying at around nine in the morning when your daily budget is exceeded - or be spread out through the whole day but only be shown to 1 in 1000 searchers. (depends on your adwords setting)

If you do not limit your budget, you will have 100 visitors in one day and one sale.

Same result. Of course you will not make any money either way.

The daily budget has nothing to do with the number of conversions and the success of your campaign. It's not much more than a security limit.

netmeg




msg:4316877
 2:27 pm on May 24, 2011 (gmt 0)

The other thing you want to take into account is return customers. One of my clients sells a number of consumables, and has a huge rate of return business. So for him, we can afford to pay a bit more for customer acquisition, because over time, we get more of the customer. Another client has products that are usually bought once and then never again (although I keep telling him to work on that) For him, we can't pay so much.

davidky




msg:4316905
 2:54 pm on May 24, 2011 (gmt 0)

You can get a personal free adwords campaign manager from Google, I'm working with one. Free-of-charge for a full month, I started with a realy messy campaign and now I'm starting to get some hits and conversions.

davidky




msg:4316906
 2:55 pm on May 24, 2011 (gmt 0)

Also try to see your competitors keyword and see what they go for - you have some great tools for that

lgn1




msg:4316984
 5:11 pm on May 24, 2011 (gmt 0)

Even although Google says ad placement does not effect conversion rates, I found that first page adwords has a better conversion rate than second page and below.

If you can't afford to bid high enough, while you are testing, then you can test with one state or one region, to keep your costs down, until you can make your campaign profitable. You can then expand to the entire country.

Don't forget to read up on broad match, phase match and exact match, and understand this.

Much money is wasted on broad match searches.

thetmz




msg:4317014
 5:49 pm on May 24, 2011 (gmt 0)

davidky: could you tell me a bit more about personal Google AdWords manager from Google? How to order this service?

Thanks

JavaCofe




msg:4317421
 2:30 pm on May 25, 2011 (gmt 0)

for my $0.02 I would compare gross medium conversion rate vs. organic, net brand organic vs. paid, and top 5 non-brand organic vs. paid.

also the acquisition stage you're looking at could be too deep, try comparing bounce rate/page views/visit-time for signals on where your going right/wrong.

paulguy




msg:4318911
 5:31 am on May 28, 2011 (gmt 0)

Does anyone have a good book or site to read for Adwords newbies?

tangor




msg:4318923
 6:42 am on May 28, 2011 (gmt 0)

Though I know this is an AdWords forum, I gotta ask... does this product/article have a market in your locale... out of a store front? Can you sell it there? If so, what are the metrics involved? Profit returns on investment? One can make beaucoup bucks on the web, of course, but only if somebody really wants it. Knowing that side of the game is very important.

Advertising is what one can afford before bankruptcy. Covering a front end loss to get out the news of product/offering. Hopefully recovery of initial investment will happen in six months or less, followed by true profit against PREVIOUS expenses.

Back in the "old days" of brick and mortar, those times would be one year and three years (and the cost involved in the location and inventory) with street traffic/mail order fueling the sales. AdWords is not that different, just more immediate and lower in cost... but like the old way, it does not happen over night, is not immediate, is not guaranteed, and if your product sucks is going to fail anyway. Or become a success!

Either way, you pay to play. Where you say OUCH is when you can't afford it. And beware the "special product" the "unique item". In my experience there are rather few of either, but there is marketing (selling refrigerators to Eskimos, manure to Farmers...) and biz can be done. There's all kinds of magic formulas spouted re: ROI, but the bottom line is this: What can you afford? How long can you afford it? Before you start making SALES? (note the PLURAL). If you have only one item to sell, go to eBay...works a treat!

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