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Is every item on your eCommerce site the same price? Of course not! Every item you sell has a different price. Are you using a cost per acquisition (CPA) model for your Pay Per Click advertising? This model only works well when all conversions have the same value.

 

Example of CPV for eCommerce

For example, in CPA you have a goal of $10 per conversion. Now let’s say you sell everything from $5 wallets to $5000 designer handbags. $10 per conversion is costing you money at the low end per sale, and you’re not bidding enough for the click to even get impressions for the expensive products.

Finch provides a Cost per Value model for Pay Per Click that is so much better than CPA. Finch figures out the value of each of your keywords. Value is highest revenue, most profit, or percentage of margin. Finch focuses on getting the most value at your target goal.

In our example store, a 10% of revenue goal allows $.50 per conversion for the wallets and $500 for the handbags – and fits every product in between. Finch’s CPV model has a dramatic impact on how much you are willing to bid per click, because you now know what you will get in return. In our example, if you are willing to spend 10% of your revenue, and you spend $10,000 on PPC – then you will reliably make $100,000 in revenue. Search volume is the only thing that limits your success.

Finch uses Google AdWords Value Tracking to understand how keywords are linked to value. Of course there is no direct relationship between all of your keywords and all of your products. For example, someone might search for a $300 Coach Satchel, click your ad, come to your site to browse, and end up buying a $1500 Gucci Clutch. Some keywords may contribute to sales of all the products in your inventory. The relationship between keywords and revenues is complex and requires Finch software. Finch will find your most lucrative clicks, discover new opportunities, and separate you from your competitors!

If everyone in your industry is using CPA to set their bids and you use Cost per Value, then you will have far better information and will be far more competitive. The outcome is BOTH increased profitability from avoiding over-bidding on the low-end items AND increased revenues from capturing the high price, high margin items.

Finch provides a complimentary audit of your current AdWords campaigns. The audit will show you exactly how much you should be paying per click based on your historic performance, and the audit will also validate that the tracking is recording the right data to give you the competitive advantage. See how Finch’s Cost per Value model can make AdWords for ecommerce extremely profitable by signing up for your complimentary audit at finch.com.

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