I, Resolve

We’ve been doing some Adwords testing for one of our clients, a dog health supplement called Dog-Wa. We haven’t had much traction with the initial keywords, so they asked if we could branch out and try a different set.

Problem is, these new keywords range from $0.70 to $2.00 per click, way too expensive to make sense for their product (that retails for $14.95).

Here’s my client’s response:

“What I’ll never understand about Google Adwords is this: every book and article you read mentions that you can expect a sale for about 5-10% of the clicks you receive. So you need 10 to 20 clicks to make a sale. If your clicks are costing you 70 cents to $2 each, you’d need to spend $7 to $40 dollars on ads to generate one sale.”

“There are no dog supplements out there that you can afford to spend 40 dollars to sell. I know advertisers work to up-sell once people get to their sites. And I am sure they rely on creating steady customers. But I can’t believe this makes financial sense for any but a fraction of the people I see advertising. So in a nutshell, I don’t even see how Google manages to convince people to continue doing it. It is hard to believe that all of these internet advertisers are so benighted that they can’t figure out what a loser this system is. Am I wrong?”

No, Matt, you’re not wrong. But it does remain a mystery. It seems like simple arithmetic. How long can you stay in business spending $40 to sell an item for $15?

It makes no sense. I can only assume people aren’t bothering to do the math. Reading blogs like this one reinforces my suspicion. A lot of people out there are clueless.

The only possible alternative I see: Target long-tail keywords (those detailed 3, 4, or 5-word phrases) and abandon the shorter keywords that cost too much.

Thinking that I might be missing the obvious, I spoke with Victoria, an Adwords specialist at Google. She was candid enough to agree with our conclusions. Her only other suggestion: improve the “quality score” to bring down the cost of the ad.

Either that or focus on SEO and social media marketing. Anybody have a better idea?