How much do you bid on your keywords for small payouts?

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ubaidabcd

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If your payout is $3 per lead, how high would you bid? 50%? $1.50. This is for a campaign that's converting and bringing in leads. I'm just not sure if I bid higher if my conversion rate will drop and I'll start losing money. Currently I'm bidding .35 a click in YSM.

I suppose I'll have to test myself, but I'm just wondering what some of you think. My conversion rate varies, sometimes it can be 1:4 and sometimes 1:7 if I bid $1.50 on those keywords then I have to have a 1:2 conversion rate, correct? Unless if I'm not always going to end up paying $1.50 per click. At .35 a click even if I have days that are not all that great (usually it's just about consistent) then it gives me enough room so I won't end up losing money.
 


I think .35 is max. I usually keep it under .30 cuz I figure about a 1/10 conversion minimum on a $3 offer. Otherwise it's not worth promoting (unless you're getting 5 cent clicks).

Right now I'm running something that pays out about twice that and it's converting 1/10 on the worst day. I bid 50 cents a click and pay around 35-40 average.
 
Thanks, I just noticed that one of my adgroups I had at .35 is losing so I'm going to lower bids.
 
kingrage said:
It depends on what the offer is converting at... all that matters is the eCPC. If your eCPC > your CPC, you're profitable.
Click to expand...

Good answer.

How do I calculate eCPC? I'm a direct advertiser for this particular merchant and don't have eCPC automatically calculated as major networks.


Thanks
 
Regarding these types offers with low payouts such as $3. I don't understand how the placement is determined on sponsered listings? Since everybody can only spend so much since the payout isn't high. As advised by JonDoe $.35 is max.

So you have all these affiliates trying to run the same offers, how are the placements determined in search engine sponsered listings? Is it first-come-first-serve type of deal? (I doubt it), but I don't understand this part.
 
I can't edit my previous post, I did a quick search on Google is this the way to calculate eCPC -

commission / # of clicks

I just did this on this campaign I ran today and got .38 eCPC and I'm biding .35 so I'm only making .03 per click, which means I definately need to lower my bids.
 
My understanding is your placement is determined by serveral factors. If you are doing search network your landing page, your ad and you keyword groups are all factors that are considered towards your quality score. Then separately your click through rate is also factored in. So it's not who is bidding the most. Someone in position 1 could be bidding less than the person in position 5.

When doing PPC, I mostly play on the content network so I don't worry about any of these things much...

But the content network sucks ass so don't even bother trying to play there. You will lose all your money.
 
You bid max based on the conversion rate

So if you send 1200 clicks and make 234 leads thats

234/1200 = 19.5%

Then you multiply your lead payout by that so say your get $4 a lead

$4 x 19.5% = 0.78

Therefore you can bid up to $0.78 a click and profit. Furthermore every click you send for less you make that much say if you buy a click for $0.43 then you make $0.78 - $0.43 = $0.35 per click

Now calculating your conversion rate is the key and takes time and you just have to send a bunch of clicks usually.
 
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kingfish said:
You bid max based on the conversion rate

So if you send 1200 clicks and make 234 leads thats

234/1200 = 19.5%

Then you multiply your lead payout by that so say your get $4 a lead

$4 x 19.5% = 0.78

Therefore you can bid up to $0.78 a click and profit. Furthermore every click you send for less you make that much say if you buy a click for $0.43 then you make $0.78 - $0.43 = $0.35 per click

Now calculating your conversion rate is the key and takes time and you just have to send a bunch of clicks usually.
Click to expand...


Thanks ++rep
 
kingfish said:
You bid max based on the conversion rate

So if you send 1200 clicks and make 234 leads thats

234/1200 = 19.5%

Then you multiply your lead payout by that so say your get $4 a lead

$4 x 19.5% = 0.78

Therefore you can bid up to $0.78 a click and profit. Furthermore every click you send for less you make that much say if you buy a click for $0.43 then you make $0.78 - $0.43 = $0.35 per click

Now calculating your conversion rate is the key and takes time and you just have to send a bunch of clicks usually.
Click to expand...

This is the theoretical way of doing things, but a lot of times, you need to bid higher in the begining to get enough clicks to see which keywords are converting. Then you dump the ones that aren't and your conversion % goes up, so you start profiting and you can afford to bid high enough to get even more traffic to those words. There are many more factors that go along with this, but that's a basic example.

I've had campaigns that were losing money right out of the gate, but there were some conversions. I started paying attention to the keywords that were converting and I noticed that 2-3 keywords were converting like 1/3 of the time and the rest of the keywords combined were like 1/300. I stopped running ads for those keywords and my conversions went up from under 5% to the mid 30's.

So while in a perfect world, you multiply payout times conversion rate and choose your margin- it's not that simple.
 
I could be wrong but kingfishs' data is based on AFTER you've tested your campaign as noted, "conversion is the key and it takes time". Your (jondoe) testing, bidding higher in the beginning, is when you initially start the campaign to find converting keywords.

I've already found my converting keywords through 6 months of testing, now I'm just trying to figure out what's the max I should bid to get the most out of the campaign as possible.

Thanks for all the replies in this thread it's helped me out.
 
This is exatly why experienced ppc marketers with large budgets will purposely lose money to start. They're seeking converting keywords and trying to get a statiscally significant conversion rate for each so they know what their max bid should be.
 
How much should you lose in the beginning to find converting keywords?
Let's say your payout is $3. Would you lose 10x the amount, $30 or $300?
How do you determine how high you should bid?

Should you bid the max payout of your commission? Bid $3 on every keyword and spend $300 to find those converting keywords?

Does that sound too much? I wouldn't spend that much but I'm wondering what some of you think.
 
ubaidabcd said:
How much should you lose in the beginning to find converting keywords?
Let's say your payout is $3. Would you lose 10x the amount, $30 or $300?
How do you determine how high you should bid?

Should you bid the max payout of your commission? Bid $3 on every keyword and spend $300 to find those converting keywords?

Does that sound too much? I wouldn't spend that much but I'm wondering what some of you think.
Click to expand...

Simply depends on if you have enough data. There is no set amount that you should lose. Once you have the data you need, the keywords that convert, quit losing money. Its that simple really. It may take 30 dollars it may take 300 dollars.
 
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