4 ms·
The only thing that matters is CPC and LTV (lifetime value of your customer). If you know your LTV is $50, you can afford $50/click. You get NO value from rai
by webwright 17y ago
The only thing that matters is CPC and LTV (lifetime value of your customer). If you know your LTV is $50, you can afford $50/click.
You get NO value from raising your bid except better placement and more clicks. I'd first try going long tail and bidding on MORE keywords (with low bids). Exhaust that option before you raise your bids.
Work on your copy, too. Adwords makes it easy to test different ads. Test a lot. Steal shamelessly from the #1 ad slot in terms of style.
- rokhayakebe 17y agoI would add CTR.
- dminor 17y agoUnless you convert 100% of your clicks, you probably want to pay attention to CPA rather than just CPC.
- petercooper 17y agoIf you know your LTV is $50, you can afford $50/click. Only if your conversion rate is 100% - which it never will be :-) You need to go a bit further and multiply by your conversion rate. So 10% conversion rate == $5/click. (Not accounting for making a profit, of course.)
- sharpn 17y agoAnd consider the time value of money - if the LTV is $50 over 2 years, you need to calculate the net present value of that cashflow to you in today's dollars (which will always be less than $50).
- adamtmca 17y agoBy definition LTV includes a discount rate, I'd bet he's using one.
- webwright 17y agoAck, yeah-- mispoke. You can afford to pay $50/customer. Conversion rate is obviously a big part of that. /facepalm Sorry for not paying better attention to what I was writing.
- petercooper 17y ago"We all make mistakes" said the dalek climbing off of the dustbin.
- callmeed 17y ago"If you know your LTV is $50, you can afford $50/click." This doesn't seem right. A click != a conversion If my LTV is $50 and my landing page gets a 10% conversion rate, then I can afford $5/click.