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Underbidding on the Average CPC of Key Words

by mantramind
4 replies
  • SEO
    • |
I have my profit margins worked out on a PPC campaign. Essentially I lose money when bidding over an average of a dollar-ish, depending on my estimated conversion rate. How effective is it to limit my campaigns under the average CPC?

For example: If the average is $1.50 and I limit to $.75 how effective will the campaign be?
#average #cpc #key #keyword #ppc #underbidding #words
  • Profile picture of the author paulgl
    If you can't afford to bid high, you should quit adwords.

    Now you can bid on lower placements, but you
    really need to spend money up front.

    Your efforts will be futile.

    Spending high and raising your QS will lead
    to a lower CPC for top spot.

    Paul
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    If you were disappointed in your results today, lower your standards tomorrow.

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    • Profile picture of the author Rachel Incoll
      If you can improve the CTR on your ads so that it's better than your competition, then depending on your niche, you might be ok.

      Though it can be a good idea to bid high for starters, you don't always have to.

      I manage a few Adwords campaigns for customers & it's not that uncommon when I build a new Ad Group for them, to receive a message saying the bid's below the first page estimate & I need to bid higher. In most cases I can ignore that & because the ads have a high CTR, within 24 hours the ads are running in position 1 or 2 at a much lower bid than Google suggested.

      If I were you I'd give it a shot and see how you go.

      Cheers

      Rachel
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    • Profile picture of the author mantramind
      It's not that I can't afford to bid high, it's that it doesn't make sense too. I have a product that sells for a profit of $29.00. If my average CPC is $1.25 and I get a conversion rate of 3% that's 2.4 sales on $100 worth of ads but only $70 in profit.

      The only way it makes sense is to set the amount to where it's profitable...The only other variable is the conversion rate, unless you think it's safe to estimate higher than 3%?
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  • Profile picture of the author Lucid
    There's only a few ways to make a PPC campaign more profitable. The first is QS. What is your QS? If it's below 7, then I don't usually recommend increasing bids. Test different ads to get a higher click rate and that will increase QS, improve positioning and reduce CPC. Then you can increase bids.

    The other way is to improve you landing page's conversion rate. Here too test different sales messages. Give the reader a reason to buy from you.

    Every little bit helps to put more money in your pocket, on both the CTR and conversion rate sides. They multiply each other so work on improving both.
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