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Working out Your PPC Bids

All companies will have to do some marketing. A great way to market is using Pay Per Click (PPC). The biggest company at the moment, although things may change over the coming years is Google Adwords. Here you can buy a keyword phrase and advertise on the first or second page (depending on how much you bid). It takes about a minute to set up a campaign...the big question apart from what keywords you are going to use is how much you are happy to pay for each click?

If you go off the estimate on google you will likely end up paying an awful lot of money and it will end up costing multiple times more than the profit you'll get for selling a unit of whatever it is your selling.

For example if you are selling fabric at $20.00 / metre - google adwords may say it will cost you $2.00 per click just to get on the front page. If the fabric costs you $10 / metre then you must sell 1 metre to every 5 customers assuming they only ever buy 1 metre.

To sell to 20% of your visitors is incredibly hard - we would suggest that you are more likely to sell to 1 customer in 100. If you start off with this in mind in your campaign and also assume you'll just sell the least units then you should be okay.

Once your campaign has been going for a while you can revise this figure up or down.

Remember also that if you are selling an item that you can sell again and again then the likelihood is that these people will come directly to your site and therefore you are making pure profit on anything you sell them in future. So if you can set up a campaign to begin with that breaks even you will be doing really well for your business.

Another important aspect of PPC is being able to track the people who come from adwords to your site - you must be able to track them and to see if they have actually purchased from you - if you cannot do that then your figures are going to be misleading. It's possible that your adwords campaign has got you no sales whatsoever and the people who bought from you all came from other website sources.

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