How accurate are Adwords price estimates?

Anders3 · Aug 10, 2019

I was thinking trying out Adwords and looked at their prices for one of my keywords. A cheap physical product on $10.47 with a profit margin on around 60-70%.

The price in Adwords was estimated to around $18.84 for 25 click with a CTR on around 3.9%. That means the customer acquisition cost (generously speaking) would be almost twice as expensive as the profit.

How correct are these estimates on Adword?

I checked out the keyword "buy laptop" just for the fun of it and the cost was around $10,000. I don't see how this is possible since no sane person would ever pay close to that...

sire243 · Aug 18, 2019

They are accurate if you use automatic optimizations for clicks. Adwords tend to overspend to get you conversions.

It is also very common for companies to overspend in the initial funnel because their upsells, backend conversions and LTV make up for the initial click.

But pro-tip. Buying search traffic is the most expensive mistake you can make. Do you actually search something and buy it the first search you make?

If you think about it you would realize that most of your purchases take some time after the initial search.

So instead of buying on Google search, you need to buy on Google display network and remarket the searches if you want the best bang for your dollar

Anders3 · Aug 19, 2019

sire243 said:
They are accurate if you use automatic optimizations for clicks. Adwords tend to overspend to get you conversions.

It is also very common for companies to overspend in the initial funnel because their upsells, backend conversions and LTV make up for the initial click.

But pro-tip. Buying search traffic is the most expensive mistake you can make. Do you actually search something and buy it the first search you make?

If you think about it you would realize that most of your purchases take some time after the initial search.

So instead of buying on Google search, you need to buy on Google display network and remarket the searches if you want the best bang for your dollar

Thank you for the tip, have been thinking and came to more or less the same conclusion.

How accurate are Adwords price estimates?

Anders3

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sire243

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Anders3

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