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CPC too high to make campaign profitable

Do you have similar experience?

     
4:32 pm on Dec 15, 2007 (gmt 0)

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Hi,

I know that the days of $0.05 clicks is long gone, but even accepting to bid $0.20 for most of my keywords is not enough. I sell $19 products and campaigns were quite profitable until 2 years ago with ROI ranging from 100% to 400%.

Now, I would have to bid $0.20 to $0.80 for 80% of my keywords. Only a small fraction of keywords shows if I can bid up to $0.20. (conversion rate of 1% - product at $19 - easy math, right?)

My first question is: how on earth do people manage to create profitable campaigns with such high CPC?

Do you sell more expensive products or services on average?

Do you achieve higher conversion rates?

Do you bid less?

What is your trick to get your campaigns to be profitable?

Thanks! I am truly running out of ideas

5:28 pm on Dec 15, 2007 (gmt 0)

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It depends a lot on the specific market you're targeting. If you're having trouble making your campaigns profitable, the first place you should look is your competition...try to figure out what their numbers might look like. That can give you best insight on maintaining profitability within your market.

But also keep in mind that not all advertisers have the same focus on profits as you do; others may be advertising for reasons other than just the immediate sales/leads (i.e., branding or keyword research or testing campaigns or using up a budget they don't want to lose for next year, etc.). Again, it depends on the specific market and the types of competitors you're up against.

5:28 pm on Dec 15, 2007 (gmt 0)

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I sell very cheap widgets.

I get traffic between 2 cents to 5 cents a click. I Try for mostly 2 cents. I have built a history with adwords. Stuck with them when they messed up the QS on launch. I got hit by USD 5 -10 bids. Made a few changes..stuck on with all keywords inactive..then sudenly all became active after 3 months of zero adWords traffic. Now pay mostly 2 to 3 cents for this campaign.

I think..

You need patience.
You need a history.
You need to stick with adwords.
You need to try diffn. ads and diffn. landing pages.
You need to tweak landing pages.
You need to work with 'exact match'
You need to get lucky.
Geo target, The 'world' is expensive.

I am sure there is much more. just my 2 cents.

7:23 pm on Dec 15, 2007 (gmt 0)

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Green_grass, these 2-5 cents clicks, do they come from google search or the content network?
12:31 pm on Dec 16, 2007 (gmt 0)

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Search.. Mostly 2 cents ..max 5 cents

Content 2 cents and below.

6:30 pm on Dec 17, 2007 (gmt 0)

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Yes! In my niche all the good/better keywords have been priced out of sight...KF
8:15 pm on Dec 17, 2007 (gmt 0)

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It really depends on the niche, and yea, I'm seeing some just priced outside of reality these days. I have keywords with a QS of Great in accounts that should have very high quality scores, but they still have minimum bids of 30 cents. For some products/niches, that works. For others, it doesn't - and I have to go over to MSN for those (Yahoo tends to be even more expensive in my experience) I also go looking through my reports to find more long tail search keywords.
9:24 am on Dec 18, 2007 (gmt 0)

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thanks for this feed back, appreciated?

Anyone else has similar experience?

How do you tackle that?