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PPC Advertising Question

by Christophe Young
4 replies
  • SEO
    • |
I've been doing PPC advertising for a while now both on Google Adwords and other sites more relevant to my niche.

I'd basically like to know how many leads I should be getting per dollar spent. What should I shoot for??

For example, I did some advertising on one site and I spent $100 on a campaign. I ended up with about 120 new subscribers so I was over a lead per dollar. I've since repeated the same campaign and I'm more at 50 or 60 new subscribers per $100 spent.

I switched to banner advertising on this same site and I got over 500 clicks to it and 80 new subscribers, and spent $100. The site is very targeted to my niche. Problem is they use a CPM model and I blew through $100 in less than a day. If I spend a lot on this site, I could really build my list fast.

Is a lead per dollar spent good? Or should I be shooting for more?
#advertising #ppc #question
  • Profile picture of the author AdwordsMogul
    Christophe, your answer depends on several factors:

    * What you are selling
    * How much profit you are making per sale
    * How much money you can make from repeat purchases

    In other words, only the return on investment determines whether it's worth it or not.

    If it costs you $10 per lead and you end up making $20 would you complain? Probably not.

    So this probably comes down to your business model and how responsive the list you are building is to sales pitches.
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  • Profile picture of the author Christophe Young
    Ok, say I'm making $2000 per month selling ebooks. Now, do people typically spend all their profits on buying new leads? So, I would spend close to 2k a month on lead generation?
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    • Profile picture of the author AdwordsMogul
      It really depends on what you want.

      If you want to build a successful business, you should develop a back end so that you make more money from those who have already bought from you.

      How much you spend on lead generation is your own choice. If you don't need the money for anything (such as paying bills) AND you have a back end that generates significant profits you can spend as much as you want.
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      "Those who can - DO IT. Those who can't, say it's impossible."
      Jean Paul a.k.a AdwordsMogul
      PHPDevelopers.net - Top of the range PHP developers

      ⇉ Easy Link Saver - Are you tired of the pain of constantly searching for your affiliate links? ( Chrome extension - FREE )
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    • Profile picture of the author dburk
      Originally Posted by Christophe Young View Post

      Ok, say I'm making $2000 per month selling ebooks. Now, do people typically spend all their profits on buying new leads? So, I would spend close to 2k a month on lead generation?
      Hi Christophe,

      The is a basic answer to this question. You want to spend every penny of your profit on marketing that nets you more profit than it costs. It's a strategy known as maximizing profit.

      In the PPC business we acheive maximum profit by testing different bid levels and determining the ICC (Incremental Click Cost). As long as the ICC is at or just below your profit per click you will be near the maximum profit per month.

      For best results you need to have a well structured campaign that allow you to measure the ICC down to the individual keyword and ad copy/creative combinations. It's just a simple math formula that can be added to a cell in a spreadsheet. Let the math tell you what is optimum.

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