Up to now they have relied entirely on standard, unpaid search results, which currently give them about 500 UK google referrals per day. These mostly result from detailed searchs (3-4 keywords), apart from one area where they have an excellent position in a particular area (which is by far their best business).
They get about 100 orders per day, average order value about £30 or so. I believe most of their new customers come from google ( > 70% ).
The Adwords (budget £2 per day) is giving them about 30 extra referrals per day, CPC about 7p.
I have a few questions:
(1) Would the conversion rate from AdWord clicks be likely to be higher/lower/about the same compared to normal search?
(2) Any idea what a "reasonable" budget for Adwords per day might be?
(3) What would a "reasonable" CPC figure be?
I know there are no sure answers, I am asking for very rough ballpark opinions based on your experience, plus any other advice on what I should be doing.
TIA,
George
"Reasonable" budget would presumably be as much as they can afford providing they're making a profit.
"Reasonable" CPC can only really be determined by looking at ROI after experimentation and will depend on the conversion rate and profit margin.
I have to say that the "exceptional" conversion rate is not as high as it appears.
Many of the daily orders will result from previous customers returning ( they may use Google, but probably just a search on the the company name ).
On the other hand, the fact that many customers will eventually return to make repeat purchases means that a new customer is worth more than the profit on the first sale.
I have to admit that my current ROI estimates are extremely inexact. The site only uses temporary cookies, and in most cases customers don't purchase immediately, they tend to return later to actually make the purchase.
I have not yet thought about how useful the google conversion tracking would be, let alone implemented it (I don't currently have access to change the site). I guess that utilises the google cookie, could well be worthwhile.
George ( obviously still very new to adwords, and still quite puzzled! )
Just a few thoughts, though, based on working with a lot of advertisers over the past two years. I am directing these thoughts not so much at your situation in particular, as to newer advertisers in general:
* AdWords can work exceptionally well for advertisers who really take the time to learn how it works, and who experiment/monitor/modify/learn/improve.
* On the other hand, the program can be quite frustrating for those who want to set it up in as few minutes as possible, set it running, and then never look at it again. This is decidedly not a recipe for success, IMO.
* My advice for those new to AdWords (especially if they are new to the arena of CPC advertising in general), is to start small, learn how it works by actually working with it, daily, then expanding once you know what works for you.
* To start, I'd suggest setting a daily budget and Max CPC consistent with what you are comfortable 'risking' in an experiment with AdWords. It is also wise to build an account that is consistent in scope with the budget that you have available. For example, if you have $1.00 a day to spend, then focus on only a few important keywords in a few targeted Ad Groups.
* Once set up, I'd suggest working the heck out of the program, and tracking as closely as you are able what sort of a return on your investment you are getting.
* Success is not usually instant. Many advertisers flounder a bit, at first. So give yourself a week or two to learn the ropes, spending some time every day in your account. Then decide if it is working.
* If your ROI is positive, then there is every likelihood that if you spend more, you'll make more. So maybe this is the time to consider raising your daily budget. ;)
Hope this helps a bit.
AWA
PS: geebee2 as in the racing airplane? One of my favorites!
The more narrow your ad text is and the closer related the landing page the higher your conversion rate.
For example advertising "red widgets - buy online now for xx $" and linking directly to "red widgets" and not to the main page can produce very high conversion rates.
(I have some very specific adwords with conversion ratets up to 20%)
Simply advertsising "widgets available here" without specifing will bring very low conversion rates.
What a reasonable budget is depends. I calculate a budget of 5-8% of sales i get trough adwords.
A 2 pound budget is way too low.
Reasonable CPC depends: As long as you are still making money it's not too high. In some areas you have to pay up to 1$ per click to get a reasonable ranking. In other areas it can be 5-10 cents. Depends on your conversion rate. The higher your conversion rate the more you can afford to pay per click.
Thanks jecasc (also AWA), I was hoping someone would say that.
The owner is rather conservative/wary, and I need to build a firm case justifying a higher spend.
It's pretty clear to me after a bit of thought that I should implement google conversion tracking for him.
It all looks fairly compelling to me, and I am going to experiment for a couple of days with a higher budget, just to see the effect. Must remember to put it back before I go on holiday for 2 weeks at the weekend!
