In the previous post, I discussed how you could get one sale at five dollars, and then increase your bid to get closer to $10 per sale. I had a few people ask why they couldn’t just stay with the five dollars per sale bid and get more profit. That’s a good question. It has to do with the balance of Google. In most advertising markets, you will find that if you stay conservative at five dollars per sale, you most likely won’t get as many sales as you would if you move up to $10 per sale. Why does this happen? (Ask a google adwords expert on how it applies to your business.)
The amount you bid per keyword is an auction, so you tell Google: “I am willing to pay fifty cents per click when someone searches for ‘wholesale dog food’, sees my ad, and then clicks on it”.
Google would respond and say: “OK, for fifty cents, we will put you in position five in the search results” (generally, the three top positions will be highlighted on the right and positions four through 10 will be located in a list, top to bottom).
Because of this, if you are in position five, people will see your ad, but it won’t be as noticeable as it would if you were in a higher spot. Since people won’t immediately see you, they will be less likely to click on your ad. This causes you to miss out on traffic. If you can move up to $10 (which should be your goal), you should bid accordingly. This will lead to more traffic. That traffic will lead to sales, and your business can become more efficient.
Another thing you must consider about bidding is how much people are actually buying per keyword. For example, when someone searches for “wholesale dog food”, let’s say they buy an average of $300 worth of dog food. Then, when someone searches for “cheap dog food”, let’s say they buy an average of $30 worth of the product. As you can see, these two keywords are not both worth $10 per sale. You can start by balancing your keywords all at $10 as a basic CPA format, but you will need to optimize certain keywords based on sales and ROI (return on investment). I will discuss this in further detail in a later post.
Look for an online marketing company or contact us to find out what’s the best bidding technique for your industry.