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Lets Compare side by Side Adsense and Product Marketing

by outwest
3 replies
  • SEO
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How do you IM marketers calculate conversion ratios.
Example if you guys compare IM to Adsense and you say, why waste traffic on .50 per click with Adsense and you can get $30 per sale with traditional product marketing

and then it takes the same CTR or conversion ratio to get a sale with either one so going by that theory , Adsense makes less money

Where I come from , non mainstream marketing, the way we calculated conversion ratio was this
Lets say I have 10,000 visitors to my blog

3 percent of those click on the Ad
so thats 3% CTR (click through ratio)

Now
with Adsense, that CTR is basically your conversion ratio because you get paid PER CLICK not PER SALE............your click is basically your sale

With traditional product based marketing
the CTR is only half of the equation

Once that 3% of the visitors clicks on my ad, I still have to get them to buy something from the sponsor

If I send 100 visitors to my sponsor and I get 1 sale that means I have a 1 percent conversion ratio

Now I see some guys comparing apples to oranges and saying,
if you have a 1 percent conversion ratio thats the same thing as a 1 percent CTR with Adsense so why make .30 per click as opposed to making $30 per sale with products sales.

But wait
If you are selling a product lets compare side by side with Adsense

10,000 visitors and CTR is 3% so 300 clicks on the Ad

Traditional Marketer also gets this 3% to make the comparison easier

Ok the Adsense Marketer gets paid per CLICK
so he gets 300 clicks x lets say .50 per click so $150 in Income

The product marketer gets 300 clicks to his sponsor
Ok but he still has not made any money yet
If 1 percent of those he sends to his sponsor convert (conversion ratio)
he makes 3 sales is 3 x $30 = $90 in Revenue

So the Adsense guy wins even if he is only making .50 per click. If the Adsense guy was getting $1 $2 per click he would really trounce the product marketer in this instance (traffic to the sites being equal, CTR to the ads being equal)

Why ?
Because the Adsense guy does not have to sell a product
he gets paid at the point of the first click on the ad from his main blog

The product marketer still has to convert 1/100 of the ad clickers to buy his sponsors product

Am I wrong about this?
#adsense #compare #marketing #product #side
  • Profile picture of the author outwest
    Nobody has a comment on this?
    this is a very important issue, there is a lot of misinformation being spouted on the board about this "conversion ratio" issue, I think it needs to be addressed
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  • Profile picture of the author ttkim
    That mathematical approach is flawed. You can't compare these two in that manner for a few simple reasons.

    Product marketing is completely different. It's much easier to get someone to click on the affiliate link than it is to get someone to click on an ad. There is that term "Ad blindness" for a reason and that's because a good majority of people completely ignore ads. Sure, ads will be related to the information you are providing, but as you said, you only convert on 3% of that audience. You can increase that with more targeted keywords but you can do the same in affiliate marketing.

    In fact, I think you have much more control over the conversion rates in affiliate marketing. Unlike Adsense, product marketing is already very targeted. Lets use the keyword "best gaming mouse", which gets 9,900 searches per month so it's a close enough example. People want information on gaming mouses. You provide good information. You lead them up to the affiliate link and convince them to buy it. You have a lot more control to get them to click on that affiliate link. I can definitely say that my "CTR" is higher than 3%, and I only started affiliate marketing about 5 weeks ago. Mine is around 12-13%, although I don't know what the average is. If it's as low as 3%, then you're doing something terribly wrong. The hard part is actually getting them to buy the product. I've heard the average for that is around 2-3%.

    In any case, the two are different. You can't just slap on Adsense CTR onto affiliate programs to make things simpler and then assume that Adsense is the better approach.

    Edit: I also think people who do affiliate/product marketing use conversion rate to define how many sales they make once the affiliate link is clicked because it's really not hard to get people to click on those affiliate links.
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  • Profile picture of the author outwest
    Sure your CTR ratio on ads might be higher but my point is this
    1. some adsense guys get 10,20 percent CTRs, its not unheard of though it might be a bit more difficult to get higher CTR depending on the niche

    2, My point in making the post is this
    there are guys implying on the board that a 1 percent conversion ratio is the same as a 1 percent CTR for adsense, thus you are getting 100 times as much money making 30 dollars per sale as opposed to 30cents per click, which is just so totally wrong I cant even begin to address how wrong it is

    Lets say you are getting 13% click through rate on your ads
    You get 10,000 visitors to your site
    so you get 1300 to go to your sponsor, so at 1 percent conversion ratio you theoretically get 13 sales

    first of all not all sponsors pay 30 bucks per sale, many its like Amazon or something where its what? 4 Percent of the retail cost? so what does that avg out to be per sale? to be avg 30 dollars that would mean avg of 700 to 800 dollars per sale (gross sale) and I seriously doubt that is happening

    I seriously doubt most pay per sale programs avg 30 dollars per sale

    I am just saying to compare 1 percent CTR with Adsense and compare that side by side with 1% CONVERSION ratio once they have already clicked on the sponsor
    is comparing Apples to Oranges
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    Tech article writing .Native English Speaker(with Proof)
    specializing in SmartPhones , Internet security, high tech gadgets, search engines, tech shows, digital cameras.
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