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Break-even in PPC?

by vikasone23
9 replies
I would like to know from ppc expert how they balance between [cost per click] and [income per lead] while starting new campaign for the first time?

what min. conversion rate you assume?
#breake #ppc
  • Profile picture of the author jordanberg2311
    depends if you are direct linking or with a lander.
    Generally with a lander to presell you'll get a higher conversion rate.

    that also very depends on niche you target and keywords you bid.
    e.g. "buy twitter followers" has higher conversions than "get twitter followers"
    "get twitter followers" can be people searching for "how to get twitter followers"

    Adcopies play a big role as well, try to do your copywriting well.


    that's my assumption anyway, you should try it and analyse your results yourself
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  • Profile picture of the author gtlovesellipsis
    My take is that you go the other way round. i.e. you know how much your "income per lead" is going to be. Now start with the lowest CPC and see at what point you start getting actual conversions and how many.

    For example, your income per lead could be $100.

    Your CPC might be $5 but then if only 1 in 15 clicks would generate actual sale, your "cost per customer acquisition" becomes $75. So your profit becomes $25.

    Hope this helps.
    -GT
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  • Profile picture of the author PPC-Coach
    You can't judge by conversion rate when you don't know it. You can guess at it then put in the real once you have it. The true measure is ROI to start. Shoot for breaking even or just above, then try to increase it through ad copy tweaking and landing page optimization.
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    • Profile picture of the author FrankRumbauskas
      Conversion rate will be all over the board depending on PPC traffic source.

      For example 75% of my conversions for my Never Cold Call Again site come from display network advertising, primarily on sales job-ad sites. They massively out-perform any search network results even for my prime keyword "cold calling."

      On that same note, most of my conversions come after several follow-up emails so you can't run PPC for one day then make a judgment as to what the conversion rate is. Conversions take time, that's what auto responders are for!

      But you CAN measure conversion by opt-in rate, that's a good way to measure immediate results.
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  • Profile picture of the author Eagle07
    Originally Posted by vikasone23 View Post

    I would like to know from ppc expert how they balance between [cost per click] and [income per lead] while starting new campaign for the first time?

    what min. conversion rate you assume?
    Get 100 clicks then analyze your results. For example your cost per click is $0.50 then that would be $50 in advertising costs. You have to see to it that your revenue is always higher than your ad costs. If you are promoting an offer that pays $4 for example then you must have at least 12.5% Conversion Rate in order to break even. In this particular set up, I would go for at least 15% conversion rate in order to continue on this type of campaign.

    You need to test your campaigns really. But before that, make sure that you have a very good landing page. You can lose money on some tests, but once you got a winning campaign, you can expand it at once and replace your losses.
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  • Profile picture of the author Winleet
    Usually you spend 5-10x the offers payout on advertising to see ROI.
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    • Profile picture of the author Prady N
      This is bit tricky, we need to understand here that conversion rate depends on various factors like....
      1) Product
      2) Offer
      3) Quality of Landing Page etc.

      Similarly cost to click also varies on the basis of

      1) Quality of Landing Page
      2) Adwords account CTR
      3) Campaign CTR etc.

      So though we will consider standard conversion rate of any industry we can not be sure that our campaign will be profitable unless we try and test it for various keywords. But standard procedure before we start campaign could be this.

      1) Study what your competitors are doing. In most of the cases I would recommend you to build your list so you can sell them back end offers.

      2) Study the components of their sales page like main keywords, headlines, sub headlines etc.

      3) Use Microsoft Commercial Intent tool while choosing keywords. This gives you fair idea of buying intention of particular keyword.

      4) Track your campaign results remove unprofitable keywords.

      From my experience I can tell you that generally there are 3 to 5 keywords that gives you 80% of the revenue.So testing is the key and last but not the least NEVER START CAMPAIGN WITH MORE THAN 30 to 50 keywords at a time.

      How to minimize cost per is different topic all together but I Hope this will help you.

      All the best!
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  • Profile picture of the author StoneWilson
    Tests are needed, because lots of enements can influence your campaign, lead price, click price, conversion rate, competitors, etc. What you need to do is try your best to find out those profitable keywords. If tests prove certain keywords are profitable, even if the click price is high, it's still worth the investment.
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  • Profile picture of the author PPC-Coach
    Frank, you're that guy?

    I've seen your ads on there for years, good job.

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