What if I told you that I could guarantee the price you'll pay for every dinner you eat over the next month? This way, you can set your dining budget and not have to think about the cost of each meal. What I won't tell you is what the meal will be, if you'll get an appetizer or dessert nor how long you'll have to wait in line for a table. My guess is you would say "No thank you."
Google's new Preferred CPC is not that bad, but it can be if you're not careful. That means it is far from the "set it and forget it" solution. Since the value of a click is influenced by more than the CPC, and the influences can change while the CPC remains relatively constant, you can hardly afford to ignore the campaign for any length of time.
Ultimately, you want to manage to the cost / profit per specific event (Conversion usually) and you'll want as many of those events as you can get. If competitors increase their bids or improve their quality score, you will loose position and your CTR will drop, giving you fewer leads. If their offer improves you will likely see lower conversions. So, while your CPC remains constant, you're volume will drop and you pay more for each conversion you do keep. Kind of makes you wish you knew what was on the menu, huh?
If you have limited resource and the Preferred CPC tool is very appealing to you, consider two tools, which when combined will serve as a daily warning of any metric-changing events.
First, created auto reports in Google and have them emailed to you each morning. They should include past 30 days and yesterday’s numbers for: Impressions, Clicks, CTR, Position, Cost and CPC (though this should be stable). You want to look for any sudden changes, or trends that will take you outside you're target metrics.
Second, sign up for adgooroo.com and set auto alerts to be emailed to you showing new ads and new competitors (preferred bid or not, this is a good tool.) This will alert you to competitive pressure that may hurt conversions.
Finally, do or quick calculation and divide the orders for yesterday by the clicks. If the conversion is different than you expected, dig deeper...something changed.
By now, you’re probably asking, “what’s the point of the preferred CPC if I have to do all this?” Well, that is the point. The CPC is not the key metric here. The amount you’re willing to pay depends on many factors, all of which you’ll need to monitor no matter what. This is not to say that the Preferred CPC does not have a place. If all your other metrics are relatively stable, or you are driving traffic with only the cost per click as a prime metric, then this will work for you. If, however, you manage your program to a profit metric, using the Preferred CPC is moderately beneficial and must not lull you into a comfort zone. SEM is just not that simple.
No comments:
Post a Comment