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questions about CPC and AdWords

by prm
7 replies
  • PPC/SEM
    • |
Hey guys,

I got some questions about PPC and AdWords,

1/ I'm working for a video games publisher, do you think that it could be interesting to do an AdWords campaign for a video game? If yes, why?
2/ Is adwords doing some CPA or just CPC?
3/ About CPC, do you have an idea of the conversion rate? I know it depends of a lot of things like the landing page and so on but could you give me some range?
4/ About bidding, I want to be in Google first page but I don't know how much money I need to bet to do so, do someone has an idea how can I get this info?
5/ What's the math formula to know if you ROI is positive? The video game we're trying to sell cost $25. I think that I need to know our operating margin and CTR, unfortunately, I don't know our CTR because we didn't run any campaigns so it will be our first campaign. Is it correct that to calculate my MAX CPC I need to apply this math formula? (OPERATING MARGIN x CTR) x 100. If my CPC > Max CPC so I will lose money. If my CPC < Max CPC I will earn money. Am I correct about that stuff?
6/ About CTR, what kind of A/B testing can I do to test different ctr?

Thank you so much guys.

PRM
#adwords #cpc #questions
  • Profile picture of the author iatta636
    Hi dear,

    I can reply you your first four questions.

    1. Gaming niche is one of the best niches for CPA and Adwords campaigns, so go for it confidently.
    2. Adwords uses both CPC and CPA.
    3. No concrete reply for this question as conversion rate depends upon a lot factors e.g. it varies with respect to geographical locations, niches, keywords, EPC, CTR etc etc.

    Hope first 3 replies would work for you.
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  • Profile picture of the author ppcmaestro
    Go in for gaming. But remember to keep a close watch on your campaigns. Try optimizing your landing pages and your keywords. Write compelling ads. Probably ads which run on facebook, might be a good idea to copy from. Dont think a lot about the returns for 3-5 days, but continously optimize and build a plan which is flexible and can change everyday.
    Remember with gaming - dont use research keywords focus more on explicit keywords which consist of download, buy and such other related keywords which make the buyer intent clear.
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  • Profile picture of the author Bright Future
    Hey prm,

    1) If there's demand for this product then it's just a matter of reaching the right audience. So, yes, it could work.

    2) The most popular model is CPC where you pay for clicks. There's also CPM model available on the display network where you pay for impressions. There's also an option to use CPA bidding strategy but in the end you'll still pay for clicks. There's no option to just pay for conversions.

    3) If you're selling a video game which costs $25 then you'll need pretty high conversion rates to make profit right away. 1% - 2% probably won't be enough unless you get very cheap clicks to convert.

    4) Use Google Keyword Planner tool. It shows suggested bids for every keyword. If your budget is tight then start with around 50% - 70% of the suggested bid amount and see how it goes.

    5) Well, you just need to know the maximum amount you can afford to pay per conversion. Let's say it's $10 which means that if you spend more than $10 for every sale then you're actually losing money. Once you know this number then just optimize your campaigns, so that they don't go over this maximum CPA target. It will be good enough at the beginning. Once you get the campaign to be profitable then you can make more advanced calculations to maximize total profit.

    6) Create at least two ads per every ad group, set ad rotation to rotate evenly in the campaign settings and there you go. Test different titles, description lines, display urls. Create ads with different selling points and see which perform better. But take conversion rates into account as well. Sometimes an ad with higher CTR can have lower conversion rates and vice versa.
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    • Profile picture of the author prm
      Thank you all for your answers!

      I got a last question,

      How can I calculate my MAX pay per conversion? The price of my video game is $25 so is my max pay per conversion $24 ? (since it's delivered digitally we don't have any costs related to that).

      What is the link between CPC and Cost Per Conversion, how can you calculate them?


      I used Google Keyword planner tool to take a loot at keywords. We're making an Horror game and it seems that the competition is pretty low for ''Horror game''. The suggested bid amount is $0.5. What do you think? There's an average of 350.000 searches every month related to those keywords.

      last but not least, How can you sure that you will be the first one on the top of google page? I don't want to pay and to be at the second page or at the bottom of the 1st page.

      Thank you very much,

      Best,

      prm
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      • Profile picture of the author dburk
        Originally Posted by prm View Post

        How can I calculate my MAX pay per conversion? The price of my video game is $25 so is my max pay per conversion $24 ? (since it's delivered digitally we don't have any costs related to that).
        Hi prm,

        The AdWords reporting interface has an optionally displayed column named "Cost / conv." that will display your CPA at the Account, Campaign, Ad Group, keyword , or Ad ID level.

        You need to monitor your average Cost / conv. metric and adjust your Max CPC bids if you want target a specific CPA.

        AdWords also has an automated bidding feature with a CPA targeting option that you can use as long as you have sufficient conversion volume.



        Originally Posted by prm View Post

        What is the link between CPC and Cost Per Conversion, how can you calculate them?
        It is your Conversion Rate that is the link.

        Your CPC divided by your conversion rate that determines the Cost Per Conversion.

        CPC / Conv. rate = Cost / conv.

        Originally Posted by prm View Post

        last but not least, How can you sure that you will be the first one on the top of google page? I don't want to pay and to be at the second page or at the bottom of the 1st page.
        The AdWords reporting system also has a column for Est. first page bid, Est. top of page bid, Est. first position bid, and Avg. Pos. to help you manage your ad position.
        Signature

        * Get Results - Outsource Your PPC Management |
        *         Don Burk Advertising & Marketing - www.donburk.com

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  • Profile picture of the author prm
    Thank you so much for your answer,

    I got a last question, is it worth it to spend $1000 in a Adwords campaign just to test it?
    We would like to test a small budget ($1000) before spending more.

    is it possible and worth it?
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    • Profile picture of the author dburk
      Originally Posted by prm View Post

      Thank you so much for your answer,

      I got a last question, is it worth it to spend $1000 in a Adwords campaign just to test it?
      We would like to test a small budget ($1000) before spending more.

      is it possible and worth it?
      Hi prm,

      It's always a good ideal to test your campaigns. I manage campaigns for clients and we consider all of our campaigns to be under continuous testing at all times.

      While $1000 may be somewhat small for a test, it will still yield a lot of useful information.

      Here are a some things that you might expect to gain from a small test:
      • Keywords - Discover search terms that are triggered by each individual keyword. Learn bid needed for each ad position, relative CTRs, and conversion rates for each individual keyword.for each individual keyword.
      • Value Propositions - Write ads with several different types of value propositions to see which your target audience responds to best. Use callout extensions to test even more selling points, to discover which your target audience favors.
      • Budget Size - Learn the number of impressions and ad budget needed to competitively cover impression share in your niche.
      • Conversion Rates - Learn which keywords and ads will generate the most conversions and get a generally ideal of relative cost per conversion for each keyword ad combination.
      • Content Performance - Get an indication of how your sales copy and page layout perform and discover any potential bottlenecks in your sales funnel and checkout process.

      By gathering that data you will be able to begin the process of optimizing your campaign performance. You will have a better idea of which keywords are worth pursuing and which are not. You will learn which Value propositions, and selling points, your audience respond to and truly care about. You will have a general idea of how your current content performs and where issues exist that might need to be fixed. All worthwhile information that can provide you with crucial data for improving your sales and marketing.

      The first few weeks of any campaign is all about purchasing data. Even if you don't earn a profit, you gain valuable data that will aid you in your quest to become profitable.
      Signature

      * Get Results - Outsource Your PPC Management |
      *       Don Burk Advertising & Marketing - www.donburk.com

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