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How can PPC have a good Cost Per Lead / Acquisition

by Mattkau
16 replies
  • SEO
    • |
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).
#acquisition #cost #good #lead #ppc
  • Profile picture of the author Frank Bruno
    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
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  • Profile picture of the author Mattkau
    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!
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  • Profile picture of the author James Schramko
    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.
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  • Profile picture of the author Johnson Tay
    Originally Posted by Mattkau View Post

    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
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    • Profile picture of the author Tuzic
      Banned
      hi,

      focus on increasing CTR so bid is lower & your ad is the best then.
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  • Profile picture of the author 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. 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.
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    • Profile picture of the author Johnson Tay
      Originally Posted by tommygadget View Post

      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.
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  • Profile picture of the author violationz
    Continuity, one time offers, upsells, future products and future affiliate promotions... list building rocks.
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  • Profile picture of the author tommygadget
    Not building a list means leaving money on the table. It's as simple as that.

    TomG.
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    • Profile picture of the author Chris Monty
      Originally Posted by tommygadget View Post

      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.
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  • Profile picture of the author Andyhenry
    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
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    nothing to see here.

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  • Profile picture of the author Fabian Tan
    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
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  • Profile picture of the author jacstone193
    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!
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    Jack Stone - Who strongly believes that helping others is the best way to help yourself !
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  • Profile picture of the author Warrior Markets
    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
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    • Profile picture of the author LivingCovers
      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.
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