Quick question about cost

[Luxoria]

Are cost per clicks really several dollars each?

Example, vitamin average CPC is $12 according to the google tools. So if I own a vitamin shop and make a bid on vitamin as a keyword would it really cost me about $8-10 per click / per visit through that ad?

Even if CPC were at $1 each an ecommerce converting at 2% would spend $100 for two sales.

Am I missing something?

[Luxoria]

I did some research and found a post by foxfox...

CPC 1US => max. 400 clicks per day
CPC 0.5US => max. 300 clicks per day
CPC 0.2US => max. 200 clicks per day
CPC 0.1US => max. 100 clicks per day


My impression is if I want to pay $1 per click I can get up to 400 clicks per day. If I only want to pay $0.10 per click I will get only up to 100 clicks per day.

Is this generally correct? (not the prices but the structure)

[buckworks]

You're thinking in the right direction, although of course the details will vary with every campaign.

In general, the more you bid the higher your ad will rank and the more clicks you'll get. If you bid less you'd get fewer clicks but your profit margins would be better on whatever traffic you do get.

If you pay too much for traffic you can empty your wallet in a hurry, so you have to know the balance point where your cost per click becomes unprofitable.

Some people take the approach that they'll pay whatever it takes to get the click, then they'll make profits over the lifetime relationship with that customer. I understand that reasoning but it makes me nervous. I prefer to know the break-even points for the campaign and work within them.

Remember that bidding more is not the only way to improve your ad's ranking. Tighter targeting and more effective ads can put you ahead of the competition even without raising your bids.

[Luxoria]

Thanks for a good reply.