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Applying this tutorial to your own Adwords campaigns can be very revealing. Many Adwords users are unaware they are spending more per click than their conversions can afford.
If you are lowering your maximum cpc to get less clicks you will get a lower ctr and therefore your add will have a worse performance score and after a little while rank even lower still then originally predicted. Surely the Adwords Bid Simulator doesn’t take this in to consideration?
We’re banging this same drum. If we can get the data dynamically it’s tough to use it comprehensively.
I also worry about Schroedinger’s Cat. If we all look at the same landscape (which is only updated once a day) and react to it, don’t we end up changing the landscape?
Absolutely, you can fold it into the click valuation, but that needs to be done carefully. First, are you considering the lifetime value only for new customers created or for every buying instance. Some keywords may be more likely than others to generate new customers versus repeat customers.
But you’re right, whether you fold it into the efficiency target (losing money) or into the click valuation, you reach the same bid.
I really enjoy and appreciate your videos – your calm, clear, and careful approach is very refreshing and helpful. This and the video on explaining the auction logic are priceless! I am most impressed however by your pointing out that bidding at your CPA is NOT always the way to maximize profit – so often the advice I’ve seem from the other engines is to bid “what a click is worth to you”, which of course maximizes THEIR profit. As usual, Google takes the long-term, sane approach of win-win!
This is where we are. The issue is not every firm is looking to maximize profits, and based on lifetime value considerations, some are willing to lose money on the initial order. This means there is no one correct formula for success. Nevertheless, you lay out the math beautifully!
– Your friends at RKG
Applying this tutorial to your own Adwords campaigns can be very revealing. Many Adwords users are unaware they are spending more per click than their conversions can afford.
HOW DO I JUST PAY FOR CONVERSIONS?
Hey Hal…. can i have 50% of googles proffits? please…!
Favorite analysis of stocks so far has definitely been OTCSPs newsletter picks.. check it out at authoropen . com
What! if you make $1000 profit, you have to give nearly $700 of it to google??? Do you think we are silly!!
if you buy a camera for $200 and sell it for $300, you’re a scumbag!!
If you are lowering your maximum cpc to get less clicks you will get a lower ctr and therefore your add will have a worse performance score and after a little while rank even lower still then originally predicted. Surely the Adwords Bid Simulator doesn’t take this in to consideration?
Also vice versa if you higher your maximum cpc.
Less numbers / more graphs please.
No they don’t. You haven’t used AdWords before…
Great.
Great site
lol google make more than twice as much profit than you do! ripp off
We’re banging this same drum. If we can get the data dynamically it’s tough to use it comprehensively.
I also worry about Schroedinger’s Cat. If we all look at the same landscape (which is only updated once a day) and react to it, don’t we end up changing the landscape?
Absolutely, you can fold it into the click valuation, but that needs to be done carefully. First, are you considering the lifetime value only for new customers created or for every buying instance. Some keywords may be more likely than others to generate new customers versus repeat customers.
But you’re right, whether you fold it into the efficiency target (losing money) or into the click valuation, you reach the same bid.
I really enjoy and appreciate your videos – your calm, clear, and careful approach is very refreshing and helpful. This and the video on explaining the auction logic are priceless! I am most impressed however by your pointing out that bidding at your CPA is NOT always the way to maximize profit – so often the advice I’ve seem from the other engines is to bid “what a click is worth to you”, which of course maximizes THEIR profit. As usual, Google takes the long-term, sane approach of win-win!
The manual process il almost impossible on thousands of kws. There is a way to get the estimations through API?
If you calculate the average lifetime value of a customer, you can still use the same method as described in this video. Right?
Thanks for the overview Hal.
I agree with George about Lifetime Value.
However, if Hal’s presentation is beyond the grasp of most Adwords advertisers – which it surely is – lifetime value has to be as well.
Nice job, Hal.
This is where we are. The issue is not every firm is looking to maximize profits, and based on lifetime value considerations, some are willing to lose money on the initial order. This means there is no one correct formula for success. Nevertheless, you lay out the math beautifully!
– Your friends at RKG