omg.. I'm going broke from these PPC ads..

[duckxtales]

Hi, I don't normally check or post here, but I know I should in order to keep up with the PPC and SEO gossip. Well just a couple of days ago I decided to try something drastic because I wasn't getting any conversions by playing safe at the end of the line on overture and google.

I have been advertising on overture and google for 2 years now. Sales have been pretty much steady every month since I started. I keep my OV budget at $300 per month and Google at about $800. In the end I usually make $1000 profit, but I feel that I am not running the business at 100% effieciency. All this time I have been playing safe on OV and Google at about 10-75 cents per a click, while the top competitors are paying above $1.00. All the top keywords that go for over $1.00 I usually don't even bother competing and stick with 10 cents. I know I'm scared to join them, but maybe that's the reason to my down fall.

Well, just 3 days ago I decided to play with the big boys on one of my keywords ($1.50-$1.00 per click) on OV. I decided to compete on second place for $1.30.

==First Day Spent: (7/13)==
OV: $76.32
G: $28.26
ROI: $210 : 100% (6 conversions)

==Second Day Spent: (7/14)==
OV: $75.16
G: $15.97
ROI: $106 : 16.3% (4 conversions)

==Third Day: (7/15): (7/15)==
OV: $98.37
G: $30.38
ROI: $$68 : -47.1% (3 conversions)

~~3 Day ROI: $59.54 : 18.35%~~

Right now I pretty much used up my entire monthly budget for OV ($12.13 left).

This wasn't my first time trying this but i was tired of seeing no orders or only a few orders a day. The first time i tried doing this I got burned and kind of learned my lesson to not do this again, but maybe its because I'm not staying in the playing field long enough to see the full ROI of the #1 or #2 place holders. I only lasted for like a couple of days. I don't understand how my competitors take the top place and still make it through the month. I know they have higher budgets, but is their ROI that good to stay on top that long?

At the rate that I am paying OV now, I estimate I will have to spend $3000 just to play on top. But I can't since i limited my budget to $300. What do you guys think I should do? Play with the big boys and really see how my competitors work?

I know without trying, I can only assume and play safe on ranks 3 or lower. But $3000 is alot of money... =(

Should I increase my budget to join them? What to do? =(

[rogerd]

duckxtales, I'd recommend basing your budget on whether your ads are generating incremental profit after you pay for them. If the ads are profitable, then you should continue spending on them. If they are costing you money, then you had better stick to a budget before you drain your coffers.

Many direct marketers plan to lose money on the initial customer acquisition but expect to make it up in the future. Web purchasers are fickle, though, and unless you are large and well funded, I wouldn't operate my customer acquisition at a loss.

You might try focusing on keywords that covert better than others to reduce cost while increasing profits. Look for some less competitive phrases that you can get into cheaply.

Also, if you can improve conversions your ROI will jump - take a hard look at your site and see what you can do to get visitors to what they want and then close the deal. "Dumb" bids by your competitors may be smart if they convert more visitors to buyers. Good luck!

[ogletree]

The reason the other guys bid so high is that they don't look at the raw daily numbers. They look at the big picture. Some people lose money on the first sale because they are confident that their service or product is so good that they will come back. There is also the hidden sale. People just get used to seeing you name out there. They tell there friends. You have got to get them in there door.

Also you may need to change your ads or your site. I have been amazed what small things I can do to improve conversions. The other day I put service prices on my site right under the H1 tag. My converstions tanked from 7.5% tp 1.9%. I moved the prices to the bottom right of the screen and they went right back up. We have made some other samll changes and have seen drastic improvement.

[moneymancn]

There should be no preset budget if the ROI is monitored (tracked) correctly.
If the campaign is positive we prefer to doulble our profits by duplicating it!
We track everything a only get involved in loc cost keyphrases,not single or even some kw kw phrases.
We do not get involved in bidding where it is most obvious and therefore more expensive.
Our current average cost per kw is $0.17
We have a lot of them and use a comprehensive tracking system and any kw that does not pay its way gets dropped VERY quickly.

<I know I'm scared to join them, but maybe that's the reason to my down fall.>

When I started with PPC it cost me money too(I think!) as I was not using any tracking.
Then I went to PubCon in Orlando and got the inspiration and confidence to attack this as a separate entity within the business.(No Brett has not paid me!)

For us it is not a question of whether we should play with the big boys but more a question of doing what they do not do and going where they do not go,all at a profit ,of course

MM