Will You Still Advertise on AdWords at S$20 CPC?

The AdWords CPCs for Serviced Office and Virtual Office related keywords are some of the highest I’ve ever seen in Singapore. At up to S$20 per click, isn’t it surprising that the entire top-side and right-side of the search results are STILL filled with advertisers? Learn why.

Below is a screenshot from Google’s Keyword Planner:

Serviced Office Keywords

At S$20 CPC and 1% conversion rate, i.e. one out of every hundred visitors ends up as a paying customer, the acquisition cost per customer is a whopping S$2,000!

If you’re wondering how I got the value:
Acquisition Cost = CPC / Conversion Rate = S$20 / 1% = S$2,000

Why would anyone still want to advertise? The answer: Customer Lifetime Value. Assuming the average serviced office rental is S$2,000 a month and the customer signs up for a 12-month plan, the revenue per customer would be S$24,000.

What about for Virtual Office? At S$10 CPC and 1% conversion rate, the acquisition cost per customer is S$1,000. Assuming the average virtual office rental is S$200 a month and like before, the customer commits for 12 months, the revenue per customer is S$2,400.

Personally, SearchGuru has been renting a serviced office for the last 2 years at 6,xxx a month. Considering that we have paid in excess of 144,000 so far, a S$20 CPC doesn’t look very expensive now, does it?