How Low Can You Go....And Still Make a Profit?

[keyon]

Hope this isn't a dumb question :-)

Are there any general rules-of-thumb in regard to setting a maximum bid -- for a particular price point (sale/converson) -- that might reasonably generate a profit?

For example, I've experimented running ads for a store that has a small average order amount ($10). I set the max CPC at .15, turned off the content network, and saw my ads show up in positions 2 - 4. Try as I might, I could never muster a profit out of this scenario. This makes me think that some price points are just too low to make Adwords profitable.

If I play with the numbers, I can see a break-even point only if I increase my price point to $12. A matrix of some sort to show these relationships would be nice. Maybe that's impossible.

Just thought I'd ask.

[morestar]

So no one was clicking keyon or no one was converting?

[keyon]

So no one was clicking keyon or no one was converting?

I had people both clicking and converting....I just couldn't get anything better than a break-even ROI. I realize there are a lot of variables in all this -- ad position, the CTR, landing page design, etc. I guess I was just wondering, all else being equal, if some price points are just too low to make Adwords practical. I know from email marketing that customers can be somewhat predictible (open rates, click-thru rates, conversion rates). And so I was curious if Adwords marketing had some of its own "rules of thumb."