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How long before I should worry about cost per conversion

Follower ✭ ☆ ☆
# 1
Follower ✭ ☆ ☆

Hi guys

I wonder if someone would be able to give me some advice please.

I am new to adwords and have set up a campaign advertising a branded product that is fairly niche in the UK.  The product sells for £10 and costs me £6.50 to purchase.

My account has only been running for about 7 days, I am measuring conversions as a sale only, however I am getting email addresses too which I am not yet tracking in adwords or analyrics - I intend to sort this out tomorrow.

 

CTR seems respectable at around 1.9%   However my conversion rate appears a little low at 0.60% and Cost/Conversion is £53.74.

I think the conversion could be negatively affected as I don't have the range of products I would like to have in stock, this will improve over the coming weeks, but even so the Cost / conversion is still way too high to be sustainable for any long period.

 

I anticipated I would need to spend some money to gather information but my question is should I now be taking steps to reduce my cost per conversion?

 

 

1 Expert replyverified_user

Re: How long before I should worry about cost per conversion

Badged Google Partner
# 2
Badged Google Partner
Michael F,

Simple answer YES. Any business has to consider their Cost of conversion and ROI numbers with any advertisement program or Business in General.

Your margins are pretty slim based on your data, therefore you really have to find your perfect ROI position to make this a sustainable model.

If your product is consumable, and you are capturing email addresses, then you can consider your advertisement as long term customer acquisition and factor your ROI with email marketing and sales from that source in which Adwords fills that Email marketing funnel with names.

The main thing is ALWAYS factor your ROI's in any business situation.
Marked as Best Answer.
Solution
Accepted by topic author Michael F
September 2015

Re: How long before I should worry about cost per conversion

Participant ✭ ✭ ☆
# 3
Participant ✭ ✭ ☆

Hi Michael,

 

I agree with everything Eric has said. I would suggest doing a couple things moving forward:

  • Take a look at your landing pages and see how you can improve the look/feel/usubility to make the path to conversion obvious and, more importantly, easy.
  • Look through your search query report and see what kind of traffic you are getting. Add negatives to weed out anything that isn't working.
  • Take a look at how mobile is working and add modifiers to maximize performance.
  • Take a look at how search partners are performing (if you are using them). They usually perform pretty well for me but sometimes they don't perform and you may want to opt out.
  • Take a look at your keyword set and match types. If you are using many broad/head terms you might get relevant traffic but it may be too high in the funnel. You may want to try to use long tail phrase/exact/modified broad until you have a good foundation in place.
  • I'd also take a look at your ads and see if you can test new messaging or improve relevance.  The higher you can increase your CTR, the better your quality score will be, which will help your CPCs.

Hope this helps!

Re: How long before I should worry about cost per conversion

Rising Star
# 4
Rising Star
Hi Micheal,

You have some great advice from Eric and Amy here. Apart from what has been mentioned here, I would just like to stress on a few key pointers here.

As Eric explained, you have to always keep your ROI's in check when running such an account. It is the only means of understanding if running an AdWords account is worth it. Also, do try and setup the email id database as it will help you reach out to potential and repeat customers with some very powerful & personalized messaging via AdWords or any other means of Online or offline marketing medium.

Other than this, I would seriously take Amy's advice under consideration and try and improve upon your current setup as per these pointers. One thing, I would like to add here, If your CPA's are too high for you, may I suggest either of the following possible steps:

1. Look at all your keywords and understand where your traffic is coming from. Are your Broad matchtype keywords the one driving traffic to your website? If yes, the cpc's for the same would be high (which is common occurance) as compared to Phrase or Exact keywords. Can you try and bid a bit lower and testing if your cpc's drop or even try diverting most of traffic through the Exact or Phrase keywords by keeping their bids higher than the Broad counterparts. Just reduce the bids for the broad keywords enough to ensure you can reduce your cpc's. This has helped me on numerous occasions, when I had to reduce my cpc's.

2. Check for your performance on Mobile devices. It is very much possible that Mobiles are costing you more and are not getting you the desired returns. If that is the case, using mobile bid adjustment, reduce the visibility on Mobiles. This too should help you reduce cpc's and in turn your CPA's to an extent.

3. If you have an E commerce based setup on your website, you can give Shopping campaigns a try. I have seen Shopping campaigns record good number of conversions at lower CPA's (as compared to search campaigns). They also have an edge over the normal search campaigns as the ads here have more descriptions and an Image to show on the SERP above the other AdWords ads.

Here is a link that will explain Shopping campaigns in further detail: https://support.google.com/adwords/answer/3455564?hl=en

Hope this Helps!

Cheers!

Shashank
Cheers,
Shashank Singh, AdWords Rising Star |
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Re: How long before I should worry about cost per conversion

Participant ✭ ✭ ☆
# 5
Participant ✭ ✭ ☆
Hi MICHALE F,

Welcome to adwords community. You can not measure any campaign with in 6-7 days. as eric suggest you for email marketing it will really good for ecommerse business vertical.
As AMY suggest you optimization of serach network campaign it really good. as shashanksingh suggest you google shopping campaign it really works for ecommerse business.


As you are selling branded product where you are getting clicks but cost per acquition is very high. You should increase brand popularity about your awarness.
YOu should try it dynamic remarketing campaign which will help you increase your conversion at lower cost.

AS
Remarketing can help you reach people who have previously visited your website. You can even show these previous visitors ads that are tailored to them based on which
sections of your site they visited. Your ads could appear to them as they browse other sites that are part of the Google Display Network or as they search for terms related
to your products on Google.

Re: How long before I should worry about cost per conversion

Follower ✭ ☆ ☆
# 6
Follower ✭ ☆ ☆
Thank you both for your responses.....

OK I am going to attempt to look into this today.

I have been in retail for a number of years (10+) and believe it or not this product is actually a very good product when you consider percentage of profit and popularity. I used to sell video games and whilst they were hugely popular they were terrible.....so I am really hoping I can get to grips with adwords and make it work for me.

Now that you have suggested looking at my landing pages I will do so, if you have any examples of particularly good landing pages I would be interested in seeing them please.

I'm only using phrase and exact matches and I'm already adding negatives in daily via search report and general research on google so I hope that should help.

I also noticed one of my adcopy appeared to be seriously out performing another in terms of CTR (but oddly the one underperforming in CTR had better conversion rate - I assume this must have been an accident) so I have paused the under performing ad text (CTR) and taken the high performing advert and duplicated it and tried to improve on it.

I shall look at mobile shortly and see what I can find there too.

Re: How long before I should worry about cost per conversion

Follower ✭ ☆ ☆
# 7
Follower ✭ ☆ ☆
Hi Shashank

Thanks for the response, I intended on keeping track of my ROI. However being honest I had assumed that adwords would work for me and it was just a matter of me doing the correct things and having the right skill set.

I hadn't considered that it might not be worth while as you suggest....so I will act sooner.

I'm not using any broad match keywords at all, I may be wrong in doing this but I have tried broad match modifier and even that I found I got too much irrelevant traffic.

I use only phrase and exact match, I believe currently I am getting sufficient traffic.....

I will look at mobile, I know there are things I can improve on, such as site speed and definitely landing page in general and on mobiles specifically so I will take a look at that today.

My site is ecommerce, I capture email addresses via newsletter subscription and also I have an out of stock notification. Which also captures email addresses too (as I'm sure you know)

I will give shopping a try....I will do all I can here for the next few days before I embark on this.

Re: How long before I should worry about cost per conversion

Rising Star
# 8
Rising Star
Hi Micheal,

I am glad we all could help you out on this.

I suggest you start trying our recommendations one at a time and not try and implement all of them together as that can lead to a lot instability in the account.

Do keep us updated on this and let us know if we can further help you out on anything else.

Cheers & All the Best!

Shashank
Cheers,
Shashank Singh, AdWords Rising Star |
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Re: How long before I should worry about cost per conversion

Follower ✭ ☆ ☆
# 9
Follower ✭ ☆ ☆
Hey guys

For those interested....my account has been running for another two weeks and I started implemented the suggestions you gave me.

I improved my landing page and experience etc.....the smoking gun came when I checked how my site was performing on mobiles I noticed that despite mobiles accounting for 60% of my clicks I made only 1 sale.

I decided to test it and low and behold there were two major issues when you tried to complete a purchase on a mobile device.

So I think that was a huge contributing factor to my very high conversion cost.

So next week we shall see how fixing this affects my results if I split my data out and look at desk tops then my conversion rate is very reasonable nothing that I would be concerned with.

So thanks for all your input

Michael

Re: How long before I should worry about cost per conversion

Badged Google Partner
# 10
Badged Google Partner
Great new to hear Michael