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How can advertising be hugely profitable?

by DamTheMan
3 replies
Ok, so I am just taking numbers out of thin air to give an example.

Lets say I have a product that has a free version and a paid version at $10/month. The conversion rate from free to paid is 4%. I spend $1000 on advertising, which brings me 1000 visitors to my website. 70% of those sign up for free plan (700) and then 28 (which is 4%) of those buy the paid version, bringing me in $280/month. The average membership duration is 3 months, bringing me $840. Therefore I made a loss of $160.

So my question, as a noobie with paid advertising, how can this model be correct?
#advertising #hugely #profitable
  • Profile picture of the author nicholasb
    the trick with paid advertising is testing a tweaking your offer until you can turn $1 into $2 or more..

    It's a matter of testing your offer, and finding the right advertising sources, because all of them convert a little differently.

    In your situation you may just need a more expensive upsell or to raise the price of your membership site..

    All I really use is paid traffic, I know how to do the free stuff, but I'd rather just pay for traffic.

    Sounds like you just need a more expensive back end offer
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  • Profile picture of the author Randall Magwood
    Offer higher paid products on the backend. Either hundred dollar items, coaching/consulting, or your own seminar.

    Do free marketing to lower the overall costs of paid advertising.

    See if you can generate leads at less than $1 per subscriber.

    Just some tips to get you on the right track to profiting with advertising.
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    ==>> Free book reveals make money with affiliate marketing
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  • Profile picture of the author Jeff Sommers
    The numbers are critical. Start your advertising budget very low. Test and tweak until you have a return on your investment then ramp it up. Spend $10 to make $20 then spend $1000 to make $2000. Test and tweak to find the best return you can get
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