600 great reasons why you don’t want to be # 1
Here are 600 very good reasons why you don’t want to be # 1 on Google Adwords. The Adwords are the ads on the right hand side of the search results on Google. Let’s say you type in “mobile phones” – here are the results.
To the right you’ll see ads under the “Sponsored Links” heading. They are the Adwords.
How it works is advertisers can get in and nominate what search terms they want their ads to appear with. The advertiser who bids the most, gets the highest position. Easy.
In theory, the top position (# 1) would be best
After all, more people will click on the top result (and they do. Our research shows a very strong increase when you have the top position.). But that’s not always are good thing.
Adwords are great – they generate a lot of visitors if done right and can be very useful.
So let’s get back to that top position. Top position = more clicks = more visitors.
No. Sounds good in theory. But in practice. What I’m about to write could save you (or make you) thousands.
It involves a little maths, but not much so please bear with me
* Let’s assume # 1 position gets a 10% click through rate (that is of every 100 people who see your ad, 10 will click on it and visit your site).
* 5% of your visitors will buy your product.
* Your product sells for $150.
Let’s assume your budget is $120 per day for Google Adwords.
Let’s assume it costs you $1.50 to get that top spot.
That means you’ll get 80 visitors ($120 divided by 1.50)
5% buy. That means you make 4 sales and have gross sales of $600.
Using all of the same assumptions above, lets not get top position
Let’s get position # 4.
Let’s assume that will cost just 75 cents per click (that’s 75 cents everytime a person clicks on your ad).
* let’s assume # 4 position will get a click through rate of 3% (that is of every 100 people who see your ad, just 3 will click on it and visit your site).
All the other aspects are the same: 5% of visitors buy, your product sells for $150, your budget is $120 per day.
You’ll get 160 visitors ($120 divided by .75)
5% buy. That means you make 8 sales and have gross sales of $1,200
This is how it is because the ratio of people who buy stays the same. The only way it would be advantageous to be # 1 is when your advertising budget is unlimited (or you’re doing it for branding purposes, etc).
And here’s the kicker……..as if you didn’t know it was coming!
We don’t need to assume the above. It’s all true. All solid figures from a test we did with a site yesterday. They were the ad costs, the conversion rates, the sale price, etc.
Test everything you do in marketing your product. We now know how to make our client an extra $18,000 a month.
And now you do too.