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I don't think so. I would think the technique of dividing CPC by the prospective conversion rate might be useful in determining ballpark costs for Adwords as one specific channel of marketing, but it's quite a leap in logic to say "this is what your product's price needs to be".

The idea that a potential market can be understood through such a swift and simplistic means is taking the paradigm of Adwords testing to absurd lengths.



I think the OP meant that this is the bottom line margin you need.

As an Auction Marketplace, with highly motivated prospects, searching for what you offer, only a click and a buck away, and an extremely low barrier of entry, I would argue that Adwords is as close to an efficient marketplace as possible, and represents the high end of the cost per customer within the framework of profitability.




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