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Or do you start at the minimum CPC and then try to gain more traffic little by little by upping your bids and not blowing your budget.
I've been doing the second method mostly, because I'm still relatively new and want to cut down on "too expensive" lessons. But I can see a lot of merit in doing it the first way, especially now that I've had some success and my "gut-feeling" is a bit more in tune with what works and what doesn't.
This is a very good question and one that I'm also wondering...
If Max CPC x CTR = rank number... then new campaigns with a virtually 0 CTR are going to be ranked low down.
With a low ranking, boosting the CTR is hard because you ad is featured in low positions and get less clicks!
So maybe the answer is to payout top money initially, get a good CTR and then reduce the MAX CPC once the CTR has climbed?
Anyone had experience of this that can tell us the best way to go about this?
In the google estimates its saying that on a certain phrase the "Average Cost-Per-Click" is very low 0.04p...
Does this mean if i put my MAX CPC up to a VERY high amount i will ever pay the high amount? Surely with google estimating 0.04p its never going to get as high as £1 if i happen to set my MAX to £1?
How does google actually work out what the click is going to cost?
I can't really tell you how much u will pay, suck it and see on a couple of words.
Actually there are loads of threads here about working out the actual CPC. And those guys are much better at explaining than me! My only advice is get hooked on your CTR.
Once we have the impression volume data, then we're in a far better position to rebuild the campaign targeting the KWs that work.
1. Traffic. For this, the above approach of a low bid (not necessarily $0.05 - you don't want to be buried so far behind you never receive an impression) to find where volume and quality lies is a good approach. Measuring time on site, time on page, ad (on site - not G) CTRs, etc help determine which KWs are being successful.
2. eCommerce (or Goal oriented marketing. This might not always be eCommerce, it could be newsletter signups, free downloads, etc - but there are specific user actions that are measured and can have $$ amounts assigned to those actions).
There is a need to to play with who's around for these sites. For this, we look at conversion rates, profit margins, volume, and then make a competitive bid (not necessarily the top premium position out of the gate, just something that will produce a break even or positive ROI). Once we have some data to work with, we can start adjusting bids based on conversions, ROI, LTV, etc.
3. Branding. Need to promote your site in the top 5 for a decent branding effect (top 5 if 2 premiums, top 3 if 0 premiums -- that is for a 'real company' who has some sort of name already, if you're a small company who wants some branding efforts, a lower placement can work as well as image ads). Often these guys have a bit more money to play with and aren't looking for straight ROI (sometimes they are, in that case this is used with a mix of the eCommerce above).
We make competitive top 5 bids, and then measure CTR, average times on site, average times on pages, etc to determine which KWs/Themes will help the branding effort, and which KWs are so expensive - it's not worth their time as they aren't looking for ROI, but total exposure at a reasonable price.
Every site is unique in it's approach to marketing, conversions, defining & measuring success, that it's difficult to lump all the variations into a few categories. The above are the top 3 I run into, but there are plenty of other sites with other goals that need to be taken into account as well.
The questions to start with:
1. How do you measure success?
2. What do you consider a successful online campaign?
From there, you can use your knowledge to help them realize if their goals are realistic, if they're missing a goal they should be looking for, etc.
I strongly believe that 'branding' for a small company is not an option.
spend your money instead on creating MASSIVE value for the prospect. offer them something of value in exchange for their contact details (the more the better, but email & name as a minimum)
Then follow up. again & again & again.
prove you can provide tons of value
prove you can solve their problems.
unless you're Coke or Unilever or Nike branding ain't gonna work.
Permission Marketing is king. get their permission!
Wow them, knock their socks off, make you're offer insanely remarkable.
Otherwise don't bother...
just my thoughts :)