PPC tip from Perry Marshall

This was sent to me by Perry Marshall the author of The Definate Guide to Google Adwords

I thought that readers of this blog who are interested in learning more about how to run a PPC campaign could benifit from Perry's teachings.

~~~~~~~~~~~~~~~message from Perry~~~~~~~~~~~~~~~~

Today I got an email from a customer. Great question
here:

>Hello Perry,

>Your course is excellent. I just have a couple of questions
about testing:

>When running a Google Adwords campaign containing many
tightly-focused keyword groups, obviously you have to
exercise patience to determine which groups will convert to
sales.

>The big question is, how many clickthroughs would you allow
before discarding a group?

>A figure of 200 to 300 clicks is often quoted which seems
reasonable.

>But suppose you have a site with a high CR (say 2%, compared
to the web average of 0.5 to 1.0%)... shouldn't be focusing
on the "hot and hungry" keywords?

>And what if you get one sale, and then nothing for the next
300 clicks - do you regard that "stray cat" sale as an
aberration and discard the campaign?

>It seems to me that PPC advertising is very similar to stock
market or futures trading. And the oldest rule of trading
the markets is:

>"Cut your losses and let your winners run."

>All good traders have a system, that tells them where to set
their stop losses.

>I was wondering if anyone had yet devised a system for
trading the PPCs?

>Best regards,

>Murdo

---> Here's the answer I gave him:

Murdo,

The answer to your question is in the cost of acquiring
each customer. It's not the # of clicks, it's how long
you tolerate a zero ROI on a campaign. If you've spent
2-3X your gross margin on clicks w/ no sale, then
you've got a serious problem. You either cut your
losses or make some kind of drastic improvement.

Yes, this is kind of like the stock market, but far
less risky. And every trade that works or doesn't
work teaches something you can definitely apply
to the next thing you do. It's skill based, not luck
based.

Simple system for trading PPC's: Find anyone who
needs traffic and will pay you for it, and you're
trading! SOunds simplistic, but it's really that
simple.

Best,

Perry Marshall

~~~~~~~~~~end of message from Perry Marshall~~~~~~~~~~~~~~~~

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