How your competitor is beating you in Adwords

Like every business, you want more sales/leads/bookings. How can you get more of this from Adwords?

Increase cpc and rank higher to capture more traffic.

But that will increase my CPA and make my business unprofitable, I hear you say. I'm already ranking as high as I can afford.

Expand your keyword set.

Easy to say, I'm already keyword mining every search term and bidding on all relevant keywords. Any keywords not added are low quality that would waste me money, you say.

Increase your budget.

I have no more money. I've borrowed money against my house, my car, my suit to spend it all on Adwords.


You currently have a conversion rate of 4% and a cost per click of £2. So 100 clicks cost you £200 and result in 4 sales. Your CPA is therefore £200/4 = £50. You need 2 more sales to hit target. So you need a total budget of £300 to generate your target of 6 sales.

Your competitor meanwhile is working hard on his website. He started out with a conversion rate of 3% and managed to improve it to 6%. Let's keep his cpc the same as yours so that 100 clicks also costs him £200 but in his case generates 6 sales.


Wasn't 6 your sales target? You had to go over budget at £300 to reach that figure whereas your competitor only spent £200 and stuck to his budget.

So he's already having an edge over you, not only hitting your sales target but also at a lower price. If his maximum CPA is also £50 like you, he's currently hitting £33 and has a lot more room to increase spending. He could increase cpc or bid on lower quality keywords which would both result in more traffic and at a higher CPA but he can certainly afford that. Or he could just stick to his current CPA and pocket the money as profit instead of ploughing it all back in Adwords.

Your competitor is able to do all this without increasing his budget and all because of a better conversion rate than you, only 2% higher. Now increase all the numbers a 100 times, so 10, 000 clicks, £20,000 and £30,000 budget, 400 and 600 sales and the differences get even bigger while the conversion rate gap has stayed at 2%.

Of course, he had to invest some money into his website to improve the conversion rate but he will reap the benefit not just from Adwords but from all other sources of traffic.

So what are you waiting for? There's no time like the present to improve your conversion rate. How do you do that? Here are some ideas to improve your conversion rate. Meanwhile, why not get in touch with me to see if I can make any further improvements to your Adwords account? I've been doing this for many years now.

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