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Every Friday, I post a small insight into running Curio City and/or Blue Hills Editorial Services. My most recent posts are directly below. You can also start with the first post, or use the subject labels to the right to home in on particular topics. Feel free to comment on anything that interests you.
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Friday, October 19, 2012

Wrestling with the Ad Beast

It’s time to reevaluate last month’s decision to automate my keyword bidding. This post shows my advertising snapshot in mid September. I made some changes to these two sections:

Product-specific ads (Aug-Sept):
·         Click-through rate: 0.85%
·         Average CPC $0.17
·         Conversion rate: 0.68%
·         Cost per conversion: $25.54

After turning Product-specific bidding over to Google’s algorithm, the numbers for the past 30 days changed to this:

Product-specific ads (Sept-Oct):
·         Click-through rate: 0.66%
·         Average CPC $0.21
·         Conversion rate: 1.43%
·         Cost per conversion: $14.86

The top-line numbers actually got worse (the higher cost per click is especially worrisome), but conversions doubled and the cost per conversion fell by almost half. Despite the ambiguous result, I’m going to continue to let Google manage this. While I was fiddling around, I also suspended my top 6 keywords for 3D puzzles because their lifetime cost per conversion had crept as high as $35. I had already stopped advertising keyboard stickers completely for the same reason. Stopping that hemorrhaging put a measurable ding in my traffic without saving me any money because Google just redeployed the budget into other keywords that were smacking into their ceiling. 

I’m doubling down and turning Product Category ads over to them, too. Here’s the current reference point for that group:

Product category ads (Sept-Oct):
·         Click-through rate: 1.61%
·         Average CPC $0.18
·         Conversion rate: 1.96%
·         Cost per conversion: $9.00

I’ll check that for improvement in mid November.

All I did in the Bing department was slay the least profitable keywords, so I didn’t expect much month-to-month difference. Here’s the reference numbers:

Bing Ads (Aug-Sept):
·         Click-through rate: 0.45%
·         Average CPC $0.19
·         Conversion rate: 0.44%
·         Cost per conversion: $43.94

And here’s the latest:

Bing Ads (Sept-Oct):
·         Click-through rate: 0.64%
·         Average CPC $0.21
·         Conversion rate: 1.28%
·         Cost per conversion: $16.53

The numbers are a lot better than the previous batch…but that’s still a long way from saying they’re good. Microsoft just barely made its probation. This time, I suspended all of my worst-performing categories – jewelry ads, 3D puzzles, and earbuds. That ought to cut my monthly Bing spend in half.

Focusing on cutting costs rather than growing business is self-defeating, as the IMF has learned from European governments’ austerity measures. But throwing good money after bad doesn’t grow business. I’ll revisit all of this in mid November and decide whether to retake manual control.

Christmas revenues might not surge enough in November and December to cover the wave of big Christmas orders that I’m placing right now. Being too cautious would become a self-fulfilling prophecy, since I can’t sell what I don’t have, so I’m torn between fear of overspending and feeling like I need stuff right now. After dropping a cool $1,900 this week alone, I need to hold back a little.

Last week I put out my first newsletter since July – yeah, I paid $54 over three months for no reason other than to keep my mailing list active. The results? 309 sent; 5 bounced; 68 opens; 17 clicks; 1 “social share”; no sales. I did get three new Facebook likes that were probably newsletter-driven. Was that worth $54? I seriously doubt it. But my next newsletter will have better stuff, so we'll see how that goes.

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