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When to Optimize Keywords for PPC Success in 2024

Published on May 10, 2024

About this video

When to Optimize Keywords for PPC Success - in this video you will learn when is the best time to optimize your campaigns, how often and which metrics to include.

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📊 Key Topics Covered:

*Formula for Optimization:* Learn how to calculate the optimal point for tweaking your keywords using your specific conversion rate. *Practical Examples:* I'll show you how to use this formula with real-life scenarios, helping you understand how to apply these techniques to your own campaigns. *Adjusting Bids Strategically:* Find out when it's smart to double your average clicks before making adjustments to ensure you're not making premature decisions that could hurt your campaign's performance. *Consider Product Pricing:* Discover how the cost of your product influences your optimization strategy, especially for high-value items where the sales cycle might be longer.

Whether you're new to selling on Amazon or looking to improve your existing campaigns, this video will equip you with the knowledge to effectively manage your Amazon PPC ads. If you have any questions or need more details on any points, please leave a comment below, and don’t forget to hit the like and subscribe button for more valuable insights on Amazon PPC and digital marketing strategies.

00:00 - Intro 00:16 - Formula to calculate how many clicks you need to make a sale 00:50 - Determine the right time to take action 01:50 - How price of your product affect this decision 02:40 - Calculate your Cost per Sale (CPA)

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Transcript

hi guys okay I keep hearing questions regarding when to optimize the campaigns how long should I wait to change my bid or etc etc different variations on that so in this video I'm going to explain how to do that so it's very simple you can uh there's a formula that you can uh easily use so number of clicks when to optimize a certain uh keyword is this so one divided by conversion rate um here I created you can do that easily using that form Creator a small table that you can really use anytime that you need to calculate that so for example if you have an average uh let's say six um perc of conversion rate that means that you're on every 16 clicks uh 16.7 clicks you actually land a sale now um that doesn't mean that if you don't get a sale after 16 clicks you should lower the bit or pause the keyword or even negate God forbid uh so it it just gives you an average what's happening so what you can do is that you can go double than that so if on average you should get a sale after 16 clicks you can uh to be sure you can do that after 30 clicks 32 clicks so you can go double in that that will uh enable you just to be sure that keyword uh is performing or not and then uh different directions from there either increase the bit depending on the outcomes or lower the bit or whatever else um yeah so you can use that when you manually optimize the campaigns or you if you use some kind of automation software you can also uh set up your tools using that additionally uh yeah also what's worth mentioning that's just a general rule so you cannot apply that to every single product and keyword out there especially uh you need to take into consideration where the pricing of your product now um I'm helping a client managing uh big portfolio of of a products and they can even uh have hundreds of clicks like 700 clicks uh before they land a sale and we still shouldn't optimize that much because it's a really high uh very very expensive product so it's a $1,500 product so even that if they say spend $500 without a sale it's still um no time for lowering the bit uh so yeah really take that into into consider consideration when uh choosing that one uh yeah additionally uh what I have here and I recommend you do that is that you um gives you really an estimation what to do for example if you have that as we mentioned 6% of conversion rate hopefully don't have but if you do and for example if your average CPC is like whatever like 46 immediately you will have the expected CPA if everything goes right and that conversion rate maintains the you're going to have a CPA of $ 7.67 um it's important to have that because if your product is uh not that expensive you need to calculate that too and uh have that as a as a metric to base your decisions off yeah let me know if you have any additional questions or not I just wanted to address that because I keep hearing that question all the time yeah so byebye see you in the next video

Frequently asked questions

How do I calculate how many clicks a keyword needs before I should take optimization action?

The formula is simple: divide one by your conversion rate. If your conversion rate is six percent, one divided by 0.06 equals approximately 17 clicks per sale on average. That is your baseline, but acting on that exact threshold is premature since individual keywords can run above or below your average. A safer approach is to wait for double that number, around 30 to 35 clicks, before drawing conclusions. At that point you have a meaningful enough sample to distinguish a genuinely underperforming keyword from one that simply had an unlucky run.

Why should I double the clicks-to-conversion number before making optimization decisions?

Conversion events are not evenly distributed. A keyword might generate 15 clicks with no sale and then convert on the 16th through the 20th click. If you pause or lower the bid after exactly 17 clicks with no sale, you may cut off a keyword just before it starts performing. Using double the expected clicks-to-conversion threshold as your decision point reduces the chance of making premature adjustments that harm a keyword that would have produced profitable results with a little more data.

Does the clicks-to-conversion formula apply the same way for expensive products as for low-priced ones?

No. For high-priced products with long consideration cycles, buyers often research extensively before purchasing, which means the natural clicks-to-conversion ratio is much higher than for impulse or low-cost purchases. A product priced at $1,500 might require 700 clicks or more per sale. In that case, spending $500 without a conversion is not necessarily a signal to lower the bid. The same mathematical threshold that applies to a $20 product would cause you to prematurely optimize away from keywords that are simply operating on a longer sales cycle. Always calibrate your optimization threshold to your product's price point and category norms.

What is cost per acquisition (CPA) and how does it help with PPC optimization decisions?

Cost per acquisition is how much you spend in PPC for each sale generated by a specific keyword. You calculate it by multiplying your expected clicks-to-conversion number by your average cost per click. For example, if your conversion rate is six percent and your average CPC is $0.46, you expect to spend approximately $7.67 per sale on average for that keyword. Comparing this CPA to your profit per unit tells you immediately whether a keyword can ever be profitable at its current bid and conversion rate. If the CPA exceeds your margin, you need to either improve conversion by optimizing the listing or reduce your bid to bring the CPA down.

What should I do if a keyword reaches my click threshold with no sale, lower the bid or pause it?

Lowering the bid is almost always preferable to pausing immediately, especially if the keyword is semantically relevant to your product. Reducing the bid reduces your cost per click, which lowers the CPA you would achieve if the keyword eventually converts. Pausing eliminates your presence for that search term entirely and means you lose any future sales that keyword might have produced. If after further clicks at the lower bid the keyword still generates no sales and the spend continues to exceed your acceptable threshold, that is the appropriate point to consider pausing or negating it.