Value per clickPer click
Optimise the invitation to tender in e-commerce with the Value Per Click method.
Nowadays, using passwords for your keywords is quite complex, especially if you have an e-commerce trading cart that needs to remain lucrative. You can always use Google Enhanced CPC or Conversion Optimizer if you are not happy with the manual adjustment of your bid. Perhaps you have some cash to spend on burning and want a third-party software like Marin Software or Kenshoo.
Because Google optimises offers to earn cash for Google, not for you. Third parties work well in principle, but the extra costs for the softwares would probably be better invested in increasing your budget for your PC. Best ecommerce methodology for PC buying that I have found is the value per click methodology. Using this technique, you take the overall value provided by a given catchword (i.e. the overall gain you make from a catchword before deducting advertising spending from your winnings) and split it by the number of hits on that catchword.
Then you can check this Value-per-Click (VPC) figure against your mean CPC for that particular word and see how best your offer is. Let's say you make your bids changes every 7 trading day, and this is your latest catchword review (for example, let's say "Total Conversion Value" is profit):
They can get a fairly good picture of which catchwords make and lose cash by simply deducting the overall costs from the overall value of the game. However, that doesn't help you get much understanding on how to make changes to your commandments. In order to achieve this, we need to insert a "Value Per Click" colum, which splits the entire value of the convert (column L) by the entire number of Klicks (column D):
We can now see exactly how much each click delivers and how different it is from the mean CPC (see M and F). This example shows how[Buy widgets] and[Widgets] lose cash on an average click, while[Order widgets] and[Cheap widgets] earn money on an average click.
Well, let's use a few more formula to find out how we should customize our bidding. For the sake of simplicity, in this next example I have deleted all non-offer-related key figures and added a colum. It is the VPC (column M) minus the mean CPC (column F). It won't give you exactly the offer you need, as the spreads between Max CPC and Medium CPC are very different, but it will bring you nearer to where you should be.
Greater losses mean a greater decline in supply, and on the threshold of return your catchwords get a more subtile fit. They can also use the VPC computation to raise bidding on a keyword that could earn more cash. At the example above [order widgets] and [cheap widgets] had a sound VPC, but showed in the center of the results of the first page.
Once you have raised your bid, you can raise your audience and your converted offers while staying profitably. The system is by no means impeccable, but it provides invaluable insights into return on investment at the catchword layer. The consideration of traffics, converting or cancellations alone is too restrictive. When you want to make cash on PPC, it is important to look at the revenues and profits generated by each and every word.
With this easy costing you could be on your way to more profitably priced catchwords after only a few regular planned bids changes.