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I don't entirely disagree with this article but I do know that Google Ad prices are driven by market demand which means that if you price your product to break

by ljd 14y ago

I don't entirely disagree with this article but I do know that Google Ad prices are driven by market demand which means that if you price your product to break even on Google Ad conversions you are really just piggybacking on your competitor's math. That's what they have found to work. If enough people use this logic you'll converge on an average market price - not what customers are willing to pay. TL;DR: You are participating in a pricing feedback loop with your competition.

mdda 14y ago
... which is part of the point of this simplistic method : You're quickly able to pick the brains of all your (future, potential) competitors, without even knowing who they are, or researching what they're selling. Maybe you can envision a higher-priced product with the same purchase rate (a win), or a lower-priced product with a vastly better purchase rate (also a win). But, using the assumption that there are people already trying to optimize their offerings in the market-place, the back-of-the-envelope calculation from the article is a quick sanity check.