How to get started with Google AdWords. Visit adwords.google.co.uk
Our Chief Economist, Hal Varian, explains the how to adjust your bids to maximize the profit from your marketing investment on AdWords.
Video Rating: 4 / 5
An introduction to Google AdWords
By admin in Google Adwords
Jun
3
Comments
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It think Adwords in more appropriate for the advertising companies. Like you say you get charged for this, but that is the actual purpose for it as it is advertising.
For many companies this is a good way of advertising as many people will probably see their website, and they also have the budget for it.
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in this example Google is making over 20% of the sale. Pretty nice margins for Google for doing Nothing
@cabbagedavidge – about the figures. You have a max bid on $5 but that is not your actual cost. Your avg. cpc is 3.35 which is the amount you times with numbers of clicks. Which gives you the exact cost
Only question, on the graph where you show bid $5 – Clicks 208 – Cost $697.42 etc How did you arrive at the figure of $697.42?
Thanks for any help with this.
Your presentation was a great way to help understand. Thanks for such clear easy to follow explanation. I have grappled with trying to understand Adwords bidding, you have now made it so much easier.
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There is a reason why that comment was deleted. Why don’t you address how you’re making a profit if you are paying $100 per conversion at a sale price of $300, and your wholesale cost is $200. Address that.
I read your other comment, and you clearly understand the video less and less the more you watch it. None of the statements are contradictory. You rarely pay the full maximum CPC bid for a click, which is why when you bid $5 you would at worst break even, but probably turn a profit. This is not contradictory to saying that if you paid your full CPC max bid of $5 you would be breaking even.
This is just a semantic question – Hal is calling revenue the money you generate from the sale before you factor in the cost to you for the advertising
Paying up to $100 for each conversion would lead to a break even scenario. He says at this point you can still make a profit on the sale. I highly doubt this guy works at Google, they wouldn’t hire someone this incompetent.
Revenue is $300, not $100.
if the CPA is 100 $ how did you make profit on that sale ? in the first simple example ?
I don’t see where the “cost” value comes from if you haven’t actually done it at the CPC value. Does this mean that before applying this you have to run the auction at each value level?
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Wow, so in this example google makes more than the guy selling it!
The theory about ICC is fine if IF on every position you will have the same conversion rate.
Common place 1 / 2 in Google will get most traffic, but it wont get the highest conversion rate. I am managing Google PPC account (spend $300K a month on google) and I am telling you guys, In 80% of niches position 1 and 2 will have lower / higher conversion rate when position 5 and 6. So you have to make that adjustment as well when calculating your Max Profit per Conversion, ICC etc.
Applying this tutorial to your own Adwords campaigns can be very revealing. Many Adwords users are unaware they are spending more per click than their conversions can afford.
HOW DO I JUST PAY FOR CONVERSIONS?
Hey Hal…. can i have 50% of googles proffits? please…!
What! if you make $1000 profit, you have to give nearly $700 of it to google??? Do you think we are silly!!