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ad spend question

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

alright so if you have keywords that are expensive like 15 dollars a click or 50 dollars a click. what should my ad spend be ? keyword planner saying its really competitive. 

1 Expert replyverified_user

ad spend question

[ Edited ]
Visitor ✭ ✭ ✭
# 2
Visitor ✭ ✭ ✭

Hey Nathan, 

 

Calculate the average net profit you're getting per customer. Then, estimate the conversion rate. Or better, if your site is already running, divide the total number of customers by the amount of users (unique visitors) that reached your site on a given period.

Your bid should be less than [net_profit_per_customer] x [conversion_rate]

For example: 
If your average net profit is $150 per customer. You had 5 customers and 100 unique visitors to your site. Your bid should be less than $7.5: $150x(5/100)

 

Elad <edited by a Community Manager as noted below>

 

Note: this post has been edited by a Community Manager, per Community Posting Guidelines. Please do not include self-promotional links in your posts.

Re: ad spend question

Explorer ✭ ✭ ☆
# 3
Explorer ✭ ✭ ☆

Hi @Nathan G!

Remember! google keyword planner tool bids are suggested bids not exact. So, my advise is for you to do not focus only on bid. try to improve your quality scores which are most important. watch this by google itself. by changing bids after campaign creation you can determine that your keywords are eligible for the first page are not. if not so try to increase your bid.

 Determine your bid

Untitled picture.png

if your product worth is $50 and you sell it in $100. That means your cost per acquisition will be $50. and finally, assume that you get one sell in 30 clicks because it's clear that every click not generates sell. so, your estimated bid will be $1.66.

hope this will help you!

ad spend question

Top Contributor
# 4
Top Contributor

Nathan - I do this a little differently.  I know that I need 10-20 clicks/day to gather data and make good decisions.  So, take the CPC and multiply by 10 and 20.  So you'd need $150 - 300/day for $15 clicks.