Internet Marketing Strategy and Implementation

Should I Spend more on Google Ad Words?

After reading the Comscore article talking about how Yahoo’s new update has improved click-through rates, an acquaintance wrote the following:

I do only use Google Adwords. My budget of $10 per day always gets reached. According to a recent come-on from Google, I could up my budget to $50 per day at my current bids and the current search traffic. I am not sure I want to up my PPC though. How can I tell if it is good to increase my budget? Can you see in the analytics how many sales I have for the amount I am spending?

Here was my response:

In response to your comment, you may want to get a handle on the "conversion rate" from your ad campaign. If your $10 per day ($300/month) pays back, it would make sense to spend another $10/day (and possibly more). If it doesn't, you shouldn't be spending the $300 in the first place, or we would work on improving conversion rates. When the incremental $10 payback diminishes, we would start picking up leads and sales using Yahoo and other Search Marketing opportunities.

Labels: conversion rate improvement, SEM, web analytics