Learn Google Ads: Biggest ROAS Mistakes: Customer Value

You will find a lot of these big companies, supermarkets, online stores - they will have special offers as loss leaders because they know once they come to them, we are going to buy lots of other stuff. The same way in a supermarket, you will have some items like bread, milk, these supermarkets will probably sell at breakeven, or just making very minute profit margins on it, because they know when we go into the supermarket, we're not just going to pick those couple of items, we're going to buy lots of other stuff as well, where the profit margins are a lot higher.

And that is why you need to do the same thing, is be able to work out your customer lifetime value right across the board, and then bid accordingly and bidding high does not necessarily mean that Google is going to charge you this cost per click. It means that you are going to win that auction, and you are only going to pay 1p or 1 cent of whichever currency you have one penny more than you're, the second-best competitor or advertiser in that auction.

So quite often you will find that you are bidding 13.33, but Google is only charging you perhaps $4 or $5, it's because of that. I've got another video, which I'll put the link in the description box as to how Google calculates that ad rank. And this is how easy it is to work out just by doing a little bit of homework, you'll be able to take your campaigns from here to up there and get your ROAS to the maximum amount you want to run to, and also be able to scale because the name of this game is whoever is able and willing to pay the most to acquire a lead or a customer wins. That's it, you can't afford to pay the most, you are not going to win in this game, it’s as simple as that. So keeping these numbers very clearly in your mind, as well as on paper or in a spreadsheet, you'll be able to work out your bids and what you need to do.

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