Collection of Sufficient Data for Well-Informed Decisions
Rules should only be triggered after enough data is collected to make an informed decision.
To answer the question of when there is sufficient data, the minimum number of clicks needed for one conversion is a good pointer.
Minimum Number of Clicks for 1 Conversion
The following formulas can be used to determine an ideal threshold:
Medium Reliability (65% Probability of Sale):
Number of clicks = 100 ÷ Conversion Rate (%)
Example: 100 / 4% = wait 25 Clicks
High Reliability (90% Probability of Sale):
Number of clicks = 100 ÷ Conversion Rate (%) x 2
Example: 100 / 4% x 2 = wait 50 Clicks
Having a conversion rate of 4%, for example, does not mean the product is guaranteed to generate a sale after 25 clicks. To avoid excluding keywords prematurely, it is recommended to wait around twice as long, ie. using the second of those formulas.
Organic or PPC Conversion Rate as Calculation Basis
In order to calculate “X clicks” you must use an expected conversion rate. For this, you can either use the organic CR of your product/ product group or even better the average PPC CR of your product/ product group.
The following table provides a breakdown of the number of clicks needed (for both medium risk and low-risk thresholds), according to the respective conversion rate:
Automatic Calculation of X Clicks
If the threshold value is set to "1X" clicks, Sellics will automatically calculate the corresponding value for the respective ad-group:
The advantage here is that one rule-set can be used for multiple (differing) ad-groups.
Calculation Method: The dynamic threshold (1X) will be automatically calculated on the basis of the PPC conversion rate within the past 90 days of the respective ad group's products.
If there are multiple products within an ad group, Sellics weighs their differing conversion rates based on the amount of orders they generated in that ad group.
If the product has no conversion data in that time frame, the system will make use of the average CR in the ad group, campaign or all products in the same marketplace in that order.