Adwords keyword research and CPC and Daily Budget

By doing a little keyword research and entering your results into the MPG calculator that you can download from askhowie.com/mpg, you can assess the Total Market Health (TMH) man, am I a fabulous acronym builder (FAB) or what? of your market by combining the total number of bids with a weighted average of bid prices. This gives you a rough estimate of how much money is being spent in the market by PPC advertisers. The process will take you fewer than ten minutes per market (I’ve done it so often I can do it in under five minutes), and it looks more complicated than it is. If you’ve never used a spreadsheet program before, you may want to have an Excel jockey friend on hand to help you the first time.  

 

  

1. Go to askhowie.com/mpg and download the MPG Calculator. You’ll need Microsoft Excel or the free spreadsheet Calc available at www.openoffice.org to open the MPG.

2. Once you’ve downloaded and opened the MPG, enter the keyword you searched using the free keyword tool described in the “Determining market size by spying on searches” section, earlier in this article. 

3. Enter the total monthly search volume from the spreadsheet with the top 100 keywords into the MSV column of the MPG. 

4. Log in to your account at adwords.google.com.

5. Click the Tools link and choose Traffic Estimator from the Optimize Your Ads section. 

6. From the spreadsheet with the top 100 keywords, select and copy the entire column containing the keywords. Do not include the search volume numbers, just the keywords themselves. 

7. Paste those 100 keywords into the box at the top of the Traffic Estimator. 

8. Leave Max CPC and Daily Budget blank, select the language and location targeting based on the market you’ve going after, and click Continue. 

9. Above the table on the next page, look for the Average CPC for those keywords. 10. Divide the Average CPC in half and enter that number in the Maximum CPC field. Click Get New Estimates.  

11. Keep reducing your Maximum CPC until the Estimated Ad Positions are 4–6 for the majority of your highest volume keywords. 

12. Now take the Average CPC estimated by Google and paste it into the CPC column of the MPG. 

The MPG calculates the TMH for the market defined by that broad keyword. It will be a number between 0 and 5000 (some markets may top out above 5000, but that will be rare). Try this exercise with different markets, and especially with different variations of your main keywords. Which appears more profitable: car insurance or auto insurance? Back pain or back ache? Beekeeper or apiarist? 

What sort of TMH are you looking for? The longer you do this, the better your feel will become, but for right now you can follow Glenn’s rule of thumb: Adwords beginners should enter niche markets with TMHs between 100 and 200. At 200, the markets become more competitive, and below 100, there’s not enough money to go around. One exception to this rule is the “dollars for dimes” market. If you’re helping people make or save money, you can probably make a go of it with a TMH between 50 and 200.