How can PPC be ever profitable?

[autap6]

I am new here so "hi" to everyone :-)

I have searched forums but I can't find any post answering my question.

Let's say I can find some keywords at $0.20 per click.

I have a landing page which is let's say a review page that sends prospects to the sales page of a clickbank product.

Let's assume my review page has an 25% conversion rate and that the pitch page has a 1% conversion rate, how many clicks will I need in order to get 1 purchase?

400 clicks -> 100 prospects go on the sales page -> 1 prospect buys.

OK, but 400 clicks at $0.20 per click, that makes a total of $80.

So my question is, how can PPC be ever profitable?

Thanks for giving me a hint.

[dburk]

Hi autap6,

Your reasoning seems sound. So, if you use those exact number with product that nets you $200 per sale then you are good to go.

If you use those same numbers you can break-even on an offer that nets you $80 per sale and build a list that makes lots of money over the life of the customer.

If you can write a better pre-sell page, which is the true purpose of your review page, then you can be profitable with an offer that nets $80.

You could find a product offer that has a conversion rate that is better, if you use the same numbers with an offer that converts at 3% your down to $27 CPA.

You can test many different keywords, some will convert better than others, and if you cull the poor performers, your numbers will be better and potentially more profitable.

The bottom line is to optimize you campaign account structure, keyword bidding strategy, ad text, landing pages, lead capture and choices of products to promote and you will find plenty of money making opportunities.

[MarQueteer]

First of all, if your landing page has 25% CTR, you doing something really, really wrong, loads of potential to optimize this. The page itself, the ad and the keywords you are targetting

Second, $0.20 isn't too much depending on the niche, but on the other hand you can often get long tail keyword clicks at half that price with a decent quality score.

Third, I'd drop anything with a 1% conversion on the pitch page immediately. 2%+ or it's gone.

Last but not least: Stay away from the internet marketing niche, it's huge, expensive and the ROI is really bad. There are by far more profitable markets.

[autap6]

Thanks to both of you :-)

I have one question more for you, MarQueteer :

you say "2%+ or it's gone"
does that mean that, if after 100 prospects have been on the pitch page, I have just 1 sale (or zero),
then I drop it?

Thanks!

[terrapurus]

Autap6 ... its basically a ROI question. If you are dealing with a single front end product, then it becomes a question of what is your return on investment. If you are spending $1, to make $1.20 then I would do that all day long.

The real variables come with back end products and that is a power of a list. You can upsell your own products or affiliate market other products. Several marketers go with a low purchase front end product just to have a list of buyers (as opposed to a list of prospects) to then market in the back end to.

[MarQueteer]

Originally Posted by autap6

Thanks to both of you :-)

I have one question more for you, MarQueteer :

you say "2%+ or it's gone"
does that mean that, if after 100 prospects have been on the pitch page, I have just 1 sale (or zero),
then I drop it?

Thanks!

It depends on the product, for example tangible goods often do alot better than 2%, it's just a minimum value I have been doing well with. It's no must, there are campaigns that could be profitable with 0,5% conversion, but I personally don't run any campaigns that are dancing on the razors edge all the time. Better find something you spend $5 on to make $12, then scale it up, instead of investing $1800 to make $1850.

To have some statistical relevance, cutting a campaign after 100 visitors without a sale or just 1 sale isn't a good idea. Sometimes 200 people don't order anything, then 3 sales in the next 50.

I normally wait about a week before making a decision, shorter when the traffic volume is high, but at least 1000 clicks I'd say. Keep in mind that depending on the product or service, conversions can be very different on weekdays, weekends, day and night, holidays, etc, so it's always good to have a longer period of time than just a short snapshot. So, if in doubt, cut your daily budget to 10% and let it run for 10 days instead of spending it all in one day.

Statistics are always a big numbers game, the more accurate and reliable the more data you have.

Important: If something doesn't work, don't try fixing different things at the same time. If the ad CTR is bad, first try testing different text, don't change your bids at the same time. If you change bids, don't change your ad text at the same time. If you landing page CTR is bad, first change your ad, maybe it doesn't really match the landing page. If that doesn't work, change the landing page itself. If you are doing multiple things at once, it may work, but you won't be able to locate the problem, which means you won't learn anything from it. Always give changes some time, don't keep fixing all day. There are people spending all day doing changes to their account after every 20 clicks and a week later they are as clueless as before.

Last but not least: Don't try pushing stuff that doesn't work for you (any more), just because others (still) claim it works great for them. Don't pet a campaign you "like" because you thought it could run great or it ran great. It's like the stock market: If you bought that great tech stock you found, it skyrocketed and then starts dropping, make your stop-loss order and don't insist it's still great, just because it was in the past....until they file for chapter 11.

[autap6]

ThanQs MarQueteer :-)

If only I had found that information in the ppc courses I bought!

[Terry Kyle]

James Schramko's "Double Digit CTR" is also a very good PPC course and very reasonably priced. Just look him up here using the Search function.

Also, use the free version of WebCEO (Google it) to make sure your Quality Score is at least a 7/10 (OK) otherwise the CPCs on AdWords can be murder!

Good luck and welcome A.

[kposs]

It's a lot of testing and tweaking. Testing multiple markets, ads, keywords, landing pages. You need some money to do this, even if you're breaking even with the testing. Most probably give up too early in the process. They put up one campaign with a couple ads, get frustrated and stop. You need to focus on quickly discerning winners from losers, then scale the winners.

[yaz8888]

You need to put multiple ads and monitor
Keep the better ad and change the others