Contact Us

CPC Bid and Profit

Every advertiser wants to maximize his profit and sets the most beneficial CPC bid. Revenue is the product of your clicks, conversion rate, and average order value (if there is sufficiuent data to know these variables).

Spend is the product of clicks and CPC.

This assumes your products are free to produce and ship; if you have additional costs to produce and ship your product, we need to add them.

Revenue is the product of your clicks, conversion rate, and average order value.

Spend is the product of clicks and CPC. If we use derivative of profit with respect to the number of clicks our ads are getting.

Now, let’s solve for the maximum profit. Setting this derivative to 0 will ensure that we’re finding the maximum amount of profit we could potentially drive from our campaign:

max CPC bid that maximizes our profit, which is:

Setting your CPC bids to maximize profit is just that simple. All you need is the product of your conversion rate and your average order value.

So if you converted traffic at 2% and your average sale was £150, that means your campaigns are most profitable at £3 CPC. Less than £3 CPC and we’re making more profit per each sale, but making fewer sales. More than that and we’re making more sales but losing profit on each additional one.

 If you need any help with increasing your search performance or on how to make more opportunities for your business, then please get in contact with us here at Network Intellect. Please get in contact with us here at Network Intellect.

 

This article was posted by



Leave a Reply

What our clients say

"It’s like having your own in-house digital marketing consultancy rather than an external company. I no longer think about them as a supplier. They’re part of the team."
Marketing Manager, Education
"They have always been professional and focused on delivering results in a timely and cost effective manner. It is enlightening to have an organisation that takes the time to make recommendations on actual data analysis."
Business Manager, Charity
"They (Network Intellect) continue to exhibit their digital expertise by helping us to establish a competitive advantage by pushing the boundaries and innovating their technology and performance solutions."
Head of Marketing Communications, Education
"Because of their talent, expertise and level of service our on-line business has increased dramatically."
Founder, Electronics
"I would have no hesitation in recommending them as an analytics partner to understand and improve the performance of a website."
Vice President, Retail
Network Intellect continue to give us a fantastic service, fast and friendly and are always ready to go the extra mile. They have gone above and beyond the call of duty to deliver our results.
Director, E-Cigarette Web
"We found that Network Intellect had the depth of knowledge we needed and after speaking to them a few times we decided to go with them. It’s the best decision we’ve made in some time."
Owner, Retail
"Their services offered great value for money. I would not hesitate to recommend them as a digital partner to others."
Strategic Marketing Manager, Education
"Jason and his team at Network Intellect embody efficiency and efficacy. I would have no hesitation in recommending this excellent company to others."
Marketing Manager, Education
Network Intellect have managed our product data feeds with exceptional care and meticulous detail. I know I can trust them to make the right decisions for our business."
Director, E-Commerce
"It’s like having your own in-house digital marketing consultancy rather than an external company. I no longer think about them as a supplier. They’re part of the team."
Marketing Manager, Education
Read all testimonialsRead all testimonials

We can help you be great

We have friendly staff ready to help you get on your path to greatness...
Network Intellect Menu