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Pricing in reverse: use a product's price to figure out what you need to build

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Re: Pricing in reverse: use a product's price to figure out what you need to build

#41

Post by ankeshk »

corin_ wrote: post #40
ankeshk wrote: post #37

Earlier quoted context omitted.

If you lower your CPC bid then the Traffic Estimator shows you the rates for lower positions. The ad on the top of the page always gets more click throughs than the ad that is shown 5th on the page. And thats what Traffic Estimator takes into consideration. But you should know that the Traffic Estimator is just that - an estimator. Your real cost per click and ad positioning with Google depends on a lot of other fact…

> Including things like how good your landing page is. That will impact CPA, not CPC.

Actually, Google has this measurement scale called "Quality Score." Your landing page is one of the things they evaluate to measure the quality score. And your quality score affects your CPC.

You can read more on it here: http://support.google.com/adwords/bin/answer.py?hl=en&an...

Re: Pricing in reverse: use a product's price to figure out what you need to build

#42

Post by zuralski »

masenghi wrote: post #9

Amy Hoy doesn't say you should use adwords, does she? Correct me if I'm wrong as I've only read the free chapters and watched the video, but she basically tells you to find a suitable group of customers, see what kind of product they need, and create it. Also, blog about things which that group would find interesting, like 37signals does, to connect with these customers. Now after reading this article I wonder whethe…

It seems to have worked for people you're quoting. Why the doubt?

Re: Pricing in reverse: use a product's price to figure out what you need to build

#43

Post by snowelephant »

primatology wrote: post #25

I don't think this is accurate at all. Suppose you do have an ebook. Theoretically, certainly, you can find the price at which no consumers purchase your book, and the price at which nearly every consumer who sees your book purchases it. Thus you have a demand function. Optimize your demand function, and you have the ideal price for your book. Sure, you can go backwards. Again, theoretically, peg a price, then write…

He's trying to eliminate ideas for products, not sell an existing one. I.e. if he writes an e-book, is the cost of sales going to make it a net loss, if so, he should make a product at a higher price point or pick a different niche.

Adwords is appealing since it's an auction, and they let you see some of their data. In your example of using SEO instead, you have to do the SEO work with either your time or someone else's, so it's not like the cost is zero.

Re: Pricing in reverse: use a product's price to figure out what you need to build

#44

Post by masenghi »

zuralski wrote: post #42
masenghi wrote: post #9

Amy Hoy doesn't say you should use adwords, does she? Correct me if I'm wrong as I've only read the free chapters and watched the video, but she basically tells you to find a suitable group of customers, see what kind of product they need, and create it. Also, blog about things which that group would find interesting, like 37signals does, to connect with these customers. Now after reading this article I wonder whethe…

It seems to have worked for people you're quoting. Why the doubt?

This article states that 37signals uses online ads in addition to their 'thought leadership' marketing strategy, which, if true, I would find slightly discouraging.

Re: Pricing in reverse: use a product's price to figure out what you need to build

#45

Post by hermitcrab »

omarchowdhury wrote: post #33
hermitcrab wrote: post #8

It is definitely useful to do these sort of 'back of the envelope' calculations. A few things to bear in mind: -It is strongly in Google's interest to inflate bid prices. I would take their suggested bid prices with a pinch of salt. The Google traffic estimator shows that I should be able to get around a 4% CTR on [speed reading] at around $0.50 per click in the USA: https://adwords.google.com/ko/TrafficEstimator/ -T…

"Most people using Adwords have very little idea how to set up or manage their accounts and are paying a lot more per click than they need to" Would you please share some general advice on this?

It is a big subject. But there is a lot of information out there in blogs and in the Google documentation. Take a day or two to read and learn the basics and expect to spend lots of time tweaking. I have written a few articles here: http://successfulsoftware.net/category/adwords/

This one covers some of the worst and most common newbie mistakes: http://successfulsoftware.net/2010/02/10/5-great-ways-to-was...

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