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THE FINCH BLOG

Online Retailers - Your competitors are going to get more aggressive this holiday season. It’s not the highlight of the holiday season, but unfortunately it is the truth.

Finch will adjust your bids to react to seasonality and competitive changes. We also work within the cost goal and daily budget that you set.

In our Cost per Value (CPV) model, there are 2 things to remember:

  • The cost goal is how much you want to spend in order to make a sale. For example, $.20 per $1 that you earn - or 20% CPV.
  • The daily budget is the amount that you set in Google as a maximum per day that you want to spend.

The problem is that when your competitors get too aggressive and you don’t update these two things, then you start to lose ad impressions at the time of year when people are most likely to buy.

For example, let’s say you have your max CPCs dialed in perfectly in November and you leave them alone. What do you think will happen as your top competitors ramp up their holiday ad budgets?

Of course, you will start to fall in the rankings. Perhaps you were consistently in the #1 spot for your most profitable keywords but now start to fall to the side placements. That’s going to hurt your clicks, conversions, and ultimately your sales. Ads that you used to pay $1 per click for, now may cost you $2 per click.

There are two sides to this coin. Increasing your the amount you spend on advertising will decrease your profit per sale. So perhaps your competitors are willing to spend $.50, $.60, $.70 or more per $1 on their AdWords ad spend. This doesn’t mean they are selling profitably. It also doesn’t mean you should follow their lead.

My point is that it’s time for you to review two things:

  1. Is your daily budget preventing you from getting more impressions? Log into your AdWords account and review your budgets.
  2. Can you afford to raise the CPV goal during the holiday season and still remain profitable? If your answer is yes, then contact your Finch representative today - there’s not a lot of time left.