I dont understand how this math is supposed to work...

[GeorgR.]

A few days i mentioned somewhere that i came across some older stats of mine with adwords, like 2 to 3 years ago where it was possible to bid $0.03 or $0.04

This truly shocked me.

Now we have 2009 and i constantly see outrageous bids where the math just doesnt work - NOT if you're an affiliate marketer and promote some product which makes you maybe $30 per sale.

You can go on clickbank and eg. look at the "green energy niche"...and look how much bids are for keywords like "make your own solar generator", things like that. <--- just an example!!

While we paid literally a few pennies three years ago we're reaching $0.80++ bids - and how the **** would anyone profit with this?

100 clicks/conversion COULD be possible....70-80 clks/conversion often observed.

All the time i read about so called "super affiliates" who allegedly make a killing w/ clickbank and PPC.

I think, there is no way to "make a killing" except you discovered a super "secret" niche or work down longtails....and have a ultra high converting site like 1:25 or 1:30...and even then it would only add up if you sell something *substantial* in the $60++ range, better $100++

Example: So called "killer niche" reverse phone niche. Of course every vendor in that niche tells you its the best thing since sliced bread.

I had this running for some days, and each sale made me exactly $5.77

Now do your math with your avg click $0.30ish +/-

I am just saying i dont understand those bids anymore, and i dont understand how someone can run profitable bidding $0.80 for some CB product which makes him $35/sale....WONT...WORK...

g.

[GeorgR.]

i can tell you that the majority of clickbank (!) affiliates will agree that a pretty common conversion rate (direct linking to vendor page etc..) is 70-80.

Since you confused the heck out of me i also just did a google search and got it again with people mentioning 1% or 2% as a very typical conversion rate, now talking about digital products.

You must know a very special secret seriously stating that 1:25 is "incredible bad". My sites are good by the way. I am willing to send you some example URLs per email.

I am still saying that 1:25 is actually very good - maybe you're promoting a very different niche/program so this comparison doesnt really work?

[Matt Maiden]

Originally Posted by Jeff Hope

It's possible to accept a slight loss on the front end in exchange for building a long term asset like a list.

This is a common business practice called a "loss leader".

The money is made in the back-end. From the list.

Most of those late night t.v. info-mercials don't make up the advertising cost with a $19.95 product.

You guys remember Don Lapre? He was making his money from selling you 1-900 numbers.

[fmathd]

Many times I get >2$ / click in my adsense !
Oh god!
I really don't understand why are advertisers spending that much just for a single visitor!

[RickDayle]

Lets see.... 0.30 per bid, 5.77 per sale means you need to have 1 conversion for every 19 clicks to break even. That's a pretty high conversion rate for many people.

However, let's look at it from a slightly different perspective for a moment. Assume the primary reason for the PPC campaign is to grow a list of responsive customers. Let's further assume that a responsive list nets an average of $1 per month per customer (which used to be the "golden standard" for responsive lists).

Now, to make matters worse, let's assume that you are somehow capturing evey click as an opt-in to your list. Given that you get one sale for every 19 initial clicks, captured the customer into a "sold" list, and have captured the other 18 as opt-ins into a "maybe" list, you are working the game fairly well.

First, the one in 19 you actually sold something is considered a responsive list member. You'v e essentially gained a subscriber to the subscriber list for nothing...
Second, the 18 remaining potential customers were at least interested enough to click through, though they may have purchased right now. Given a reasonable email campaign, you should eventually convert at least a few of these to customers over the next six months, if not, it's probably good to just purge them.

Now let's say you are actually only getting 1 in 100 clicks. You spend 30.00 and you made one sale with a 5.77 commission. You are essentially 24.23 behind, and that "responsive customer" cost you 24.23 to get them on your list. Well, over the period of the next two years (with an average of 1.00 income per responsive list member per month) you have pretty much broken even with this scenario, even if you did pay more for the clicks...
This, is in essence why so many people are willing to pay so damn much for clicks. They are "betting on the come", so to speak, willing to pay through the nose today for the potential profit down the road.

Unfortunately, some of the bidding frenzy is more due to "hype and jive" and false expectations set by quite a few of the current crop of over-hyped sales pitches, and many of the people in the bidding wars right now will be out of business in 6 months or a year when they run out of money. Even more unfortunate, is the fact there will be another crop of hopefuls right behind them to keep the over-priced clicks working. It's great for the people selling clicks, but not for those of us that may want to buy clicks....

[tryinhere]

I don't get any one who even mixes adwords and CB in the same sentence these days, it can and most often only ends in tears as the big G slaps another one silly.