CPC of a search phrase
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Hi
If you have a potential domain which is high quality and well searched for what is the best way to find out and monetise the CPC for that phrase?
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There's no bullet proof hard and fast way to do this, but this is how I approach this problem. I use Google's Keyword tool to give me a base "ballpark" CPC. Then, I calculate what my average profit will be from an average conversion. For example, say my profit from a $100 sale is $50. Say, for example I'm going to count on a 2% conversion rate for my ad, and Google says the average CPC for my term is $2.00. This means that for every $200 in my ad spend (100 clicks) I should get 2 conversions. That would mean I am only breaking even, not really making any profit on the sale at all. That being the case, the only way to be profitable in this case would be to improve my conversion rate significantly and also work to lower my cost per click, perhaps by improving my ad's quality score. You need to determine what your profit goals are from the campaign because this is going to greatly influence your target CPC. If you are using the ad as a customer acquisition tool, it might not be so bad to take a loss on the transaction if you gain a customer for life.
One other place to compare CPC costs is in SEMRush. This can give you a ballpark idea of what competitors are paying per click, but as with Google, these are averages based across broad data sets that you can't see, so you really need to take them with a grain of salt.
Start with your ballpark figure and your sales goals in hand and tweak the ad and bids until you hit your target. In my experience, this can take as little as a week and as much as 3 months, so you need to have patience. All new campaigns, by sheer virtue that they have no history are going to cost you more money at first. Once your quality score improves and stabilizes, your costs should come down.
I hope this helps!
Dana
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