SEM & Adwords: How many click without a sale before i should pause a keyword

Posted by Thomas Jönsson on Pro Webmasters See other posts from Pro Webmasters or by Thomas Jönsson
Published on 2012-06-02T09:25:14Z Indexed on 2012/06/02 10:51 UTC
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I wonder how many clicks I optimally should let pass through every new keyword I try in Adwords before I find out that it's not making a profit and it should be paused!

It's actually four question. 1: At which likelihood percentile should I pause a word? 2: How many clicks should I let through before I pause a word for those word which do not generate any lead? 3: How many clicks should I let through after one sale to consider the word not to be profitable? 4: Does the likelihood of the word becoming profitable affect the above?

Conditions:

-The clicks is normally distributed. (correct?) -A CR of 1% is break even, everything above is profit (1 sale/100 clicks=break even) Cost per Click(cpc) = 4$

-Marginal (profit per sale) = 400$

-Paybacktime = 1 year

-Average click per word = 0,333 per day (121 + 2/3 per year)

Exampel: After 1 click and no sale the keyword still has a high probability to be profitable. After 500 clicks and no sale it has almost no likelihood to not be profitable and should probably be paused.

Thanks in advance!

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