How can PPC have a good Cost Per Lead / Acquisition

Mattkau · 10-05-2008, 11:42 PM

I am quite confused how PPC can help 'make money'

Consider a $40 product with a $30 margin.

At $0.70 a click, and a conversion rate of rate of 1%, it's gonna cost $70 per customer. How can this be worthwhile ?

At 2% conversion - $35 per customer (still negative $5).

Frank Bruno · 10-05-2008, 11:44 PM

That's why other marketers with a deep funnel will kill others in the market.

You gotta have a front end product, a middle product, and a backend product and you got to keep in contact with your prospects that's the secret.

In fact many marketers are losing money on the front end and are Killen it on the backend.

Frank Bruno

Mattkau · 10-05-2008, 11:48 PM

Wow! I suppose you need a bit of funds on standby to accomodate the fact that sales won't be instant. But then following up (via email) is free and there is no real CPA on the backend!

James Schramko · 10-05-2008, 11:49 PM

I buy leads for my free report, but they turn into clients....

You can still make money upfront as long as you pick the right traffic methods and you bid well. If you have very high CTR (Click Through Rates) and your page has a good qulaity score and you target a HOT buyer your conversions will be high and your costs low.

Also you can use content and site targeting for banners and cheap clicks. As well as that you can add a viral element like an incentivized tel-a-friend etc... to leverage your clicks further.

Plus you still have a backend if you build a list.

Johnson Tay · 10-05-2008, 11:58 PM

Quote:

Originally Posted by Mattkau

I am quite confused how PPC can help 'make money'

Consider a $40 product with a $30 margin.

At $0.70 a click, and a conversion rate of rate of 1%, it's gonna cost $70 per customer. How can this be worthwhile ?

At 2% conversion - $35 per customer (still negative $5).

If you bid high and your ad rocks, your CTR will spike and that will cause your CPC to drop over time

tommygadget · 10-06-2008, 12:02 AM

There are two answers to this. First, you are bidding on the wrong terms if your profit margin is only $30 and you are paying $0.70 per click. Find different keyword phrases to get it to $0.10 per click. Second answer is build a list and have an upsell so even if you are losing money from the front-end offer you are making money on the upsell/backend.

TomG.

Johnson Tay · 10-06-2008, 12:18 AM

Quote:

Originally Posted by tommygadget

There are two answers to this. First, you are bidding on the wrong terms if your profit margin is only $30 and you are paying $0.70 per click. Find different keyword phrases to get it to $0.10 per click.

TomG.

This is the perfect formula for making $50 per month

Sorry.. couldn't resist...

By the way, not that building a list is "bad", but there are PPC affiliates who make 7 figures w/o doing any list building or back-ending. Of course, this isn't very sustainable in the long term. Just want to share what's possible with PPC.

violationz · 10-06-2008, 12:22 AM

Continuity, one time offers, upsells, future products and future affiliate promotions... list building rocks.

tommygadget · 10-06-2008, 12:22 AM

Not building a list means leaving money on the table. It's as simple as that.

TomG.

Chris Monty · 10-06-2008, 12:42 AM

Quote:

Originally Posted by tommygadget

Not building a list means leaving money on the table. It's as simple as that.

TomG.

This is very true. You've got to turn that one-time clicker into a multi-purchase buyer.

Andyhenry · 10-06-2008, 12:51 AM

Err - yeah.... What they said..

You're paying too much.

You need a back end to make the numbers work.

You should build a list whenever you can to improve the vpv

Pick a new niche with higher sale values and the numbers make sense again.

You know the way the formula works - just tweek the bits you can (>ctr, <cpc, >visitor value, etc...)

If the numbers don't work even with a good funnel / back-end - you're in the wrong niche.

Driving a LOT of cheap traffic for long-tail phrases (note: this doesn't just mean long phrases) is probably a good addition to most niches for ppc.

Andy

Fabian Tan · 10-06-2008, 02:45 AM

Direct linking still works, but list building is effective as well. For my business, I'm able to pay up to $2.50 for a lead to break even after 3 months, and after that it's all profit.

I and a few marketers in the Internet marketing niche build lists using pay per click and we usually pay in the region of $1 or more per lead from the SERPS. Also, I haven't gone into Placement Targeting yet, but it can work well.

Fabian

Tuzic · 10-06-2008, 08:09 AM

hi,

focus on increasing CTR so bid is lower & your ad is the best then.

jacstone193 · 10-07-2008, 12:46 PM

Back end products and building lists are all good strategies for long term profits with ppc - but short term you need to focus on low cost long tail keywords and tight ad groups with ctr 's over 4% minimum and preferably over 10 % . Good hunting!

Yetty · 10-11-2008, 09:32 AM

Low Bidding and increase in CTR will help. whatch out for back end. You will surely profit from it

Warrior Markets · 10-12-2008, 09:46 AM

I guess, it does boil down to picking the right keywords. But, as mentioned above, if you can't afford to lose money on the front-end products, you'd need deep pockets to 'take the hit', ie, to then profit long-term.

-WM

LivingCovers · 10-13-2008, 01:54 PM

I suggest you set up conversion tracking for your PPC ads
to find out which keyword is profitable and which is not. Then you'll
be able to determine which keywords to promote further and the
ones to drop.
Focus on one strategy at a time.

10-05-2008, 11:42 PM	#1
Mattkau Warrior Member War Room Member Join Date: Sep 2008 Posts: 29 Thanks: 1 Thanked 7 Times in 2 Posts	How can PPC have a good Cost Per Lead / Acquisition I am quite confused how PPC can help 'make money' Consider a $40 product with a $30 margin. At $0.70 a click, and a conversion rate of rate of 1%, it's gonna cost $70 per customer. How can this be worthwhile ? At 2% conversion - $35 per customer (still negative $5).

10-05-2008, 11:44 PM	#2
Frank Bruno Senior Warrior Member War Room Member Join Date: Jun 2003 Location: USA Posts: 2,442 Blog Entries: 1 Thanks: 7 Thanked 97 Times in 75 Posts Social Networking Contact Info	Re: How can PPC have a good Cost Per Lead / Acquisition That's why other marketers with a deep funnel will kill others in the market. You gotta have a front end product, a middle product, and a backend product and you got to keep in contact with your prospects that's the secret. In fact many marketers are losing money on the front end and are Killen it on the backend. Frank Bruno
	* Warriors Get Internet Marketing Coaching & Training! * Video Marketing Tactics

10-05-2008, 11:48 PM	#3
Mattkau Warrior Member War Room Member Join Date: Sep 2008 Posts: 29 Thanks: 1 Thanked 7 Times in 2 Posts	Re: How can PPC have a good Cost Per Lead / Acquisition Wow! I suppose you need a bit of funds on standby to accomodate the fact that sales won't be instant. But then following up (via email) is free and there is no real CPA on the backend!

10-05-2008, 11:49 PM	#4
James Schramko Senior Warrior Member War Room Member Join Date: Apr 2006 Location: Sydney, Australia. Posts: 3,223 Thanks: 133 Thanked 422 Times in 199 Posts Social Networking	Re: How can PPC have a good Cost Per Lead / Acquisition I buy leads for my free report, but they turn into clients.... You can still make money upfront as long as you pick the right traffic methods and you bid well. If you have very high CTR (Click Through Rates) and your page has a good qulaity score and you target a HOT buyer your conversions will be high and your costs low. Also you can use content and site targeting for banners and cheap clicks. As well as that you can add a viral element like an incentivized tel-a-friend etc... to leverage your clicks further. Plus you still have a backend if you build a list.
	Get Traffic :: Wholesale SEO Services ::Advanced Internet Marketing

10-06-2008, 12:02 AM	#6
tommygadget Banned War Room Member Join Date: Jun 2007 Location: Up North, USA Posts: 2,517 Blog Entries: 11 Thanks: 88 Thanked 288 Times in 157 Posts Social Networking	Re: How can PPC have a good Cost Per Lead / Acquisition There are two answers to this. First, you are bidding on the wrong terms if your profit margin is only $30 and you are paying $0.70 per click. Find different keyword phrases to get it to $0.10 per click. Second answer is build a list and have an upsell so even if you are losing money from the front-end offer you are making money on the upsell/backend. TomG.

10-06-2008, 12:22 AM	#8
violationz HyperActive Warrior Join Date: May 2008 Location: Ontario, Canada Posts: 140 Thanks: 0 Thanked 0 Times in 0 Posts	Re: How can PPC have a good Cost Per Lead / Acquisition Continuity, one time offers, upsells, future products and future affiliate promotions... list building rocks.
	"Opportunity is missed by most people because it is dressed in overalls and looks like work." - Thomas Edison

10-06-2008, 12:51 AM	#11
Andyhenry Beware - Straight Talker War Room Member Join Date: Jan 2004 Location: United Kingdom Posts: 9,263 Blog Entries: 25 Thanks: 1,180 Thanked 4,492 Times in 1,497 Posts Social Networking	Re: How can PPC have a good Cost Per Lead / Acquisition Err - yeah.... What they said.. You're paying too much. You need a back end to make the numbers work. You should build a list whenever you can to improve the vpv Pick a new niche with higher sale values and the numbers make sense again. You know the way the formula works - just tweek the bits you can (>ctr, <cpc, >visitor value, etc...) If the numbers don't work even with a good funnel / back-end - you're in the wrong niche. Driving a LOT of cheap traffic for long-tail phrases (note: this doesn't just mean long phrases) is probably a good addition to most niches for ppc. Andy
	Get The Real Truth About SEO In 2012

10-06-2008, 02:45 AM	#12
Fabian Tan FabianTan.com War Room Member Join Date: Nov 2006 Location: Singapore Posts: 3,478 Thanks: 217 Thanked 385 Times in 119 Posts Social Networking	Re: How can PPC have a good Cost Per Lead / Acquisition Direct linking still works, but list building is effective as well. For my business, I'm able to pay up to $2.50 for a lead to break even after 3 months, and after that it's all profit. I and a few marketers in the Internet marketing niche build lists using pay per click and we usually pay in the region of $1 or more per lead from the SERPS. Also, I haven't gone into Placement Targeting yet, but it can work well. Fabian
	FREE - How To Pull In 1,000+ Unique Visitors To Your Websites Per Day! Download Your FREE Report Now!

10-06-2008, 08:09 AM	#13
Tuzic Banned Join Date: Aug 2008 Location: UK Posts: 410 Thanks: 14 Thanked 1 Time in 1 Post	Re: How can PPC have a good Cost Per Lead / Acquisition hi, focus on increasing CTR so bid is lower & your ad is the best then.

10-07-2008, 12:46 PM	#14
jacstone193 HyperActive Warrior Join Date: Aug 2008 Location: Cheshire Posts: 122 Thanks: 0 Thanked 0 Times in 0 Posts	Re: How can PPC have a good Cost Per Lead / Acquisition Back end products and building lists are all good strategies for long term profits with ppc - but short term you need to focus on low cost long tail keywords and tight ad groups with ctr 's over 4% minimum and preferably over 10 % . Good hunting!
	Jack Stone - Who strongly believes that helping others is the best way to help yourself ! Home Based Business Online Visit NOW !

10-11-2008, 09:32 AM	#15
Yetty Active Warrior Join Date: Oct 2008 Posts: 60 Thanks: 0 Thanked 0 Times in 0 Posts	Re: How can PPC have a good Cost Per Lead / Acquisition Low Bidding and increase in CTR will help. whatch out for back end. You will surely profit from it
	MAKE $20+5% PER AFFILIATE SIGNUP AND UP TO $175 PER SALE AFFILIATE MARKETING INFO

10-12-2008, 09:46 AM	#16
Warrior Markets Not-So-Active Warrior Join Date: May 2007 Location: Good ol' Blighty Posts: 231 Thanks: 12 Thanked 24 Times in 14 Posts	Re: How can PPC have a good Cost Per Lead / Acquisition I guess, it does boil down to picking the right keywords. But, as mentioned above, if you can't afford to lose money on the front-end products, you'd need deep pockets to 'take the hit', ie, to then profit long-term. -WM
	I have nothing of value to add here. But we can't let a signature go to waste now, can we?

10-13-2008, 01:54 PM	#17
LivingCovers First Among Many. War Room Member Join Date: Feb 2008 Location: Lagos, Nigeria. Posts: 716 Thanks: 34 Thanked 57 Times in 20 Posts Contact Info	Re: How can PPC have a good Cost Per Lead / Acquisition I suggest you set up conversion tracking for your PPC ads to find out which keyword is profitable and which is not. Then you'll be able to determine which keywords to promote further and the ones to drop. Focus on one strategy at a time.
	"Unique, Professional, Custom 'Ecovers Only' Deep Discount...$14.97 Only! 4 Spots Left! Jump in NOW while U have the chance". View More Samples Here!