Question

Topic: SEO/SEM

Average Cost/sale % For Ppc Campaigns?

Posted by Anonymous on 7/15/2008 at 10:51 AM ET 125 Points
What is the Ideal average Cost/Sale % in case of PPC Campaigns run on Google/yahoo Search Engines? Obviously the lower the better, In an Idea scenario what is the industry standard at this point? [for e.g. 20% average cost per Sale]
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  • Posted by Pepper Blue on 7/15/2008 at 12:41 PM Accepted
    Hi Vishalss,

    This metric is too unique for each business to have a meaningful ideal average number.

    There isn’t a standard to go by, unlike conversions in which 3%-9%, which is a large range, is generally considered good.

    However, the general rule of thumb is that you should be making more money than you’re spending on the PPC.

    The biggest thing you can do to lower your cost per sale with PPC is to increase the effectiveness of your landing pages to increase conversions/sales.

  • Posted by excellira on 7/15/2008 at 2:08 PM Accepted
    I am in agreement with Pepper that there are no standard set of metrics. Even if these metrics were "standard", variation from enterprise to enterprise would still exist.

    The key is to ensure that your CPA (cost per acquisition) remains within the limits of profitability.



  • Posted on 7/15/2008 at 10:06 PM Author
    Thank you, TrinitySEM and Pepper Blue I agree to Pepper blue that the profitabilty should be maintained and Effectiveness of landing pages should be increased... thats exactly I'm doing right now .. optimize and optimze the landing pages (which doesn't quite get over). I guess the goal should be to reduce the Average Cost/sale %.
  • Posted by Annelies on 7/16/2008 at 3:35 AM Accepted
    I do not totally agree with you guys. There is a logical and proven rule that says: low ppc, low (in number of traffic) but highly interested traffic meaning higher conversion ratio's.

    Think about it: an add with a rank 7 or 8 will only be clicked on by people that are really planning to convert.

    I'm in the European market, so not quiete sure this is also a rule in the US since your markets are much more competitive. And of course, what you all right is true: better conversion, lower ppc. Quality is always rewarded. Keep optimizing ;-)
  • Posted by excellira on 7/16/2008 at 9:55 AM Accepted
    A/B Split Testing your ads on a continual basis and ensuring that your landing page is highly relevant to the ad will help. I A/B tested one ad over 600 times before giving up on attempts to improve it. You should always have a minimum of two ad variations running at all times.

    It might behoove you to set your "Campaign" --> "Edit Settings" --> "Ad Serving" to "Rotate" rather than "Optimize". This way you can gain a better understanding of which ad is truly performing best without any influence by Google's script. Eliminate or revise poorly performing ads and learn from the control the elements which are triggering clicks.

    Using your keyword in the headline and copy and on the landing page would help. The visitor sees continuity and trusts the relevance to their search query enabling them to read more rather than click away. This will help your ad spend and position as well (at least on the Adwords platform) because highly clicked ads that visitors are not clicking the back button on are deemed to be relevant to the search query and are given favorable bid pricing and position.

    As a result though, you may find that you will need more landing pages to maintain relevance within a smaller ad group.
  • Posted on 7/21/2008 at 1:13 PM Member
    Sweet_Lies brings up a valid point. Often fighting for the #1 SERP position can be a waste of money. You will get larger volumes of traffic but you can be almost guaranteed a lower conversion rate on that traffic that if your ad was located at position 4 or 5. Lots of people click on the first couple of links as a method of gauging the market for the product they are planning on purchasing. So if you have the best value offered on your site, they may come back to your #1 placed ad and buy it, but then again if you don't have the best value one of your competitors who is paying less for each click will be able to land the sale.

    As far as your cost/sale % I cant give you much advise. I focus almost purely on ROI since for my particular product there is pretty much no COG. My better sites have a ROI of around 150%..

    Hope this helps
  • Posted by excellira on 7/21/2008 at 1:24 PM Member
    "Think about it: an add with a rank 7 or 8 will only be clicked on by people that are really planning to convert. "


    Again it boils down to the ad and landing page quality. If someone clicks your ad on position 8 they will likely click #9, 10, perhaps 11, etc. So, they've been exposed to, best case, 8 offers. If you don't have the best offer (or price on a commodity) then are you more or less likely to convert?

  • Posted on 7/23/2008 at 12:22 PM Author
    Thanks A Lot to all , Tim has pretty much given me a ball park, thanks to all anyways, everyone has added important points to be noted to this discussion.
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