ppc help/advice/questions

hello everybody...
im new to all this ppc business.
i know there is alot of money to be made via ppc but i have some concerns about it too...
although there is a huge profit potential, i know that un-experience marketer can loose alot of money using ppc.
to my understanding the keys for ppc success are (please correct me if i am wrong):

1.the ability to get cheap clicks using various methods like keyword selection, improving CTR, more targeted ads and so on...

2. A/B testing for what works and what doesn't work: getting data of the products conversion rate as cheaply as possible.
once the marketer knows what his conversion rate is and taking into consideration the click cost he calculates if the campaign is profitable or not.

3. stop losing campaigns and boosting/investing in profitable campaigns for as long as possible.

now, i dont worry about the first section because these things can be taught over time as the marketer gains more experience and knowledge...
i need some help regarding 2 & 3:

- how can i find what works and what doesn't as cheaply as possible? assuming that i have a good ad and good landing page, how can i know if the product is converting without spending
huge amounts of money just for testing?

- how much data do you usually need in order to make a decision weather the campaign is profitable or not? how many clicks do you think are required to calculate CTR, conversion rate
and profits so the data is considered reliable and not small enough? how much money do you spend on a campaign's testing?

- how big (budget size) was your most profitable campaign? does profitable campaigns tend to stay profitable forever (for evergreen niches and products)
or do they tend to start losing money at some point?

any help and advice is appreciated...

thanx...

First, like most everybody else, you are thinking about PPC the wrong way. Everyone wants cheap(er) clicks as if it's the only thing. But it's not about getting cheap clicks. It's about getting relevant traffic (which means more conducive to converting) and then converting them. This leads to positive ROI which is what you are after, no matter the cost per click.

Think of it this way. You probably know or realize that insurance keywords are more expensive. That's a relative term. There's a reason they may go for $10 a pop or more. It's because that's the going rate and what many others are willing to pay because there's a big payoff when there are conversions. That goes for anything you sell.

Sure, you can bid less, pay less but your ads won't show very often, at least not as often. One of the first thing to do is not be afraid to bid and spend what the market bears.

Of course, do what you can to improve your campaigns to get more clicks because that helps reduce or keep in check your costs against others who are and will be improving. There's something called Quality Score which controls where your ads show and how much you pay. I believe you may be aware of that. It's all based on relative CTR.

Improving QS is a matter of testing. Put yourself in your prospect's mind: what could you say that would attract him to click your ad? What is it they are looking for? Provide that in your ad and see what clicks. You may think it's one thing but it's not so you come up with something else and test that. It's all part of the game, sometimes you win, sometimes you lose. You try to minimize losses.

The last part is your landing page. There, you must reinforce the reason people clicked your ad in the first place. You must sell to them. You campaign may be great but won't be profitable if you can't close the sale. Too many people think the ad is all that's needed. It's just the carrot to get them to come to your store. It's only 95 characters max and you can't expect it to make the sale. That's the landing page's job.

You must try to keep improving, not only your ads but your landing page as well. Learn from each of them. Even if you are doing great, there can always be room for improvement. I've been working on a campaign for four years and still try to squeeze a bit more all the time. Some ad groups have 20 or 30 ads that I've tried over those years. All to try to keep ahead of competitors and ensure they don't pass me by and make my campaign less profitable.