How many people actually buy something

After visiting your site via adwords

[Gert_Jan]

I have a site that sells " purple and blue widgets ". Now I was wondering how many people purchase/order something from your site.

Example: If you spend $100 monthly on adwords and get clicks of $0,10 you got a 1000 visitors. From that 1000 how many will purchase something? ( the widgets I sell cost around $600 ;-) ) Are there some global statistics about this somewhere?

[anallawalla]

You can't expect a meaningful answer unless you ask your direct competitor. Some products have an exact price while some services have annual subscriptions. Some are high-ticket items where you feel good if you make one sale in a month; others you need to sell by the minute.

For your own $600 item you need to work out how many sales you need to get from your clicks before it is unprofitable. Your average CPC will help to determine it.

[fabfurs]

Our widgets are a luxury item, you don't need it to survive, make a living or improve your [blank] prowess.

Sometimes return on investment (ROI) is not directly connected to the percentage of click-through/conversion provided by online adverts.

We have found over time that we are branding via Adwords and OV. Sure we get direct conversion on PPC visits that can be easily corroborated via our logs and reports but by no means does it (conversions alone) dictate our daily budget we spend online.

There is a word-of-mouth factor in our business (even if the owner of the mouth never purchased our product). We have learnt that if you take away any of the online adverts our sales diminish about 14 days later in proportion to the loss of web impact that the ads provided. Our ROI is calculated with a proprietary percentage based on this cause and effect.

So all this to say that we don’t have a magic number to provide you. If you can afford to run an online campaign for a month or two and even longer then do so with the intention of looking at the entire sales picture to see if there is any cause and effect that should be added to your ROI calculations. The print industry usually advocates at least three consecutive months of adverts to realize the full potential ROI on the campaign (newsprint differs here from monthly’s).

[edited by: fabfurs at 5:00 pm (utc) on Jan. 2, 2004]

[qfguy]

AS others have said it is all about ROI (return on investment) you have to factor it in to your cost and compare it with the ROI of other ways of advertising.

My company typically spends about $150 in advertising per new client to obtain the client. Each client is worth about $700 the first year and about $300 each subsequent year to us in revenue.

It is often hard to track the ROI of offline advertising but we have found that adwords returns far-and-away the best ROI for us.

[integramed]

You could just do a bit of "what if" business planning to get an answer... what's the typical cost per click (CPC) on Adwords for your chosen keywords. At this CPC what would be the cost per month for x thousand clicks. Then, at a conversion rate of y% how many sales at $600 each would you need to make to break even? Play with different values for x and y.

Or, my prefered approach, run an actual Adwords campaign for a month and find out what really happens ;-)