One more step before jumping into the PPC game is to determine your ROI. For example, you sell a product that costs $100. We’ll assume your conversion ratio (CR – number of people who buy compared to the number of people who visited your site) is 1%. That means 1 out of 100 people buy your product. You bid $1 per click and you get 100 visitors. So you pay $100 in PPC marketing and you make $100 from the sales (no return on investment).
If you have additional expenses, like the shipment of your product, then you’ll lose more money than you’ll make. In this case you should bid less that $1 per click. However, if your conversion ration is 10%, then you can make some nice profit. CR is different in every industry. It also depends on your website (how it converts), your ad message and the keywords you select to bid on.
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