ppc forecasts and cpc costs

[ldelgado]

I'm currently managing campaigns for many ppc clients and I've come across this issue a couple of times.

Every time I do a Google forecast, the client calculates the CPC from the estimated clicks and budget that I send to him.

I keep telling them that these figures are only estimates and that a CPC should not be calculated that way for this type of campaigns because that's not the way they work. They are dynamic, we do daily changes and the CPC can go up and down quite a lot.

What's your experience with selling ppc campaigns and doing estimates/proposals for clients? How do you explain how things work?

Many thanks.

[seobook]

I'm currently managing campaigns for many ppc clients and I've come across this issue a couple of times.

Every time I do a Google forecast, the client calculates the CPC from the estimated clicks and budget that I send to him.

I keep telling them that these figures are only estimates and that a CPC should not be calculated that way for this type of campaigns because that's not the way they work. They are dynamic, we do daily changes and the CPC can go up and down quite a lot.

What's your experience with selling ppc campaigns and doing estimates/proposals for clients? How do you explain how things work?

Many thanks.
I do not do lots of PPC stuff, but ...

In my opinion it would be a good idea to slightly fluff what you think it is going to cost that way you can be a hero for overdelivering if you come under cost. also if you are struck by a budget try to list lower down on the page so the CPC price is cheaper and you can get more traffic for the same amount of money.

I would probably not recommend showing them the google figures since they are so frequently out to lunch.

welcome to the forums :)

[ldelgado]

The thing is clients want to have a cost proposal like they have when they ask for a normal CPM or CPC campaign.

Because we don't have accurate ppc forecast tools, we have to give them an ideia using Google estimation tool.

Offcouse we get low CPC with it and that's exactly the problem: in the middle of the campaign, the client evaluates the CPC and checks that's way higher than the forecast we've presented.

p.s: thanks for the welcome. I've been reading this forum daily and this is really a good SEM forum. Keep up the good work.

[MrMackin]

>we have to give them an ideia using Google estimation tool.

The tool is a JOKE

Get them to give you a TEST budget.

[OptimizeOnline]

Get them to give you a TEST budget.

I agree that it is important to test, test, test! Too often I see a DOWNWARD estimate in clickthroughs and costs when ADDING more keyword phrases to an AdGroup. I don't place a lot of reliance on the estimator.

[tomslick]

You can also try checking your estimated Google CPCs against those in Overture. This will give you an idea of what the range of costs could be and allow you to base your forecast on data outside of Google's tool.

[Chris Boggs]

see more about this subject in my post and some others here (http://forums.searchenginewatch.com/showthread.php?t=2226).

[James Colborn]

In order to get the most accurate projection the trick is to look beyond the tools provided.

1) the tools are all 'historical' data and not forecasted data so if you base the months to come on the month's previous you could be in trouble.

2) most important, don't over estimate CTR from searches to clicks. Remember, that Google says if you get a 1% CTR you are doing well and the max you'll ever get is 30% based upon the iProspect data earlier this year. If you aim for a 1% to 1.5% you'll be doing well.

3) work out seasonality... if the month you've studied on Overture is June and you're seasonality for that month is high (i.e. greater demand) then work out what percentage that month is within a full calendar year and then determine the percentage the same terms would drive in a lower % month... the same applies in reverse.

4) Take into account good or bad bidding from other advertisers and in saying this I echo all of the other recommendations for a 'test' budget.

Hope this helps,

JC.

[Web Diversity]

I don't think you can ever look back really with any degree of accuracy.

There have been so many new "features" with more on the way that skew the results that if you look at graphs and charts you'll make wild business decisions and predicitions you can't possibly hope to hit.

We've had :

extended broad match
advanced match replacing phrase, broad
stop words on some networks
synonyms

Turn it round and start looking away from the traffic level and CPC and looking at ROI instead. Get them to give you the budget needed to sell their top 20 products from a profit margin perspective and if they like what you've done ask them for the budget for the rest, you'll do that from a position of strength.

If I ask a plumber to come and fit a new bathroom for me I don't need or want to know what size drill bit he uses to drill the holes to secure the bath to the floor.

Unfortunately we work in an industry where we (collective) tell the clients everything. Why do you have to provide a Google traffic estimate?

We make the process simple, we invest money on their behalf in the best places to deliver the best return. Anecdotally we have enough supporting history to get it right more times than we get it wrong, and in cases where it goes wrong we usually know what to do to put it right.

We try to not allocate budget to different places because once you do that you build client expectations, and if your budget committments to suppliers is fluid then if you get a better ROI with Google it makes more sense to spend more there.

Those are just some of my experiences, hope they are of some help.