Interesting Calculations PPC <---> Affiliate Marketing

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Here are some calculations i made, you might want to take a look at this.

For some of the variables i used very typical values which are often observed in the "ebook" "digital products" market - especially clickbank.

For once, i used a very typical (rather mediocre) conversion rate of 1.2% which equals 1 sale/83 clicks (clks).
I also used a rough estimated CTR (clck through rate for ads) where i took 5%. (Relation impressions/clicks).

I am aware that those are very rough guesstimates...and those values can vary WIDELY, especially after tweaking a PPC campaign. However, for inital averages the values i used are "not bad" since they are pretty common.

Let's start:


After reading the "My sister makes $1000/day with this keyword" thread i sat down and calculated. The most important finding i made is that for a certain daily earnings goal there must be SEARCH VOLUME (you might be surprised) - and especially if we deal with Clickbank we need ENORMOUS search volume.

The reason is that from the currently approx 9000 clickbank products only VERY FEW pay decent amounts over $50...eg. there is only 65 (!) unique products which pay over $75!!!

For the first calculations i use a medum high payout of $50 EPS (earned per sale)


For a GROSS (!) income of $1000/day we need:

20 sales @ $50

With our avg. conversion rate of 1:83 we need
( 83clks x 20 sales == 1660 clicks) to reach a potential, statistically likelihood that we made 20 sales.

Since we have a 5% CTR rate on our ads we nee 1660 x 20 Impressions (Search Volume) where our ads preferably pop up each time. Makes 33200 Impressions a day.

This equals a monthly search volume of 996000, assuming that each search would also pop up an impression of our ad.

Ad spending at an roughly taken $0.50 per ad is $830/day.

In this example you see that this HARDLY adds up (Ad Spending!!!!) since we made GROSS $1000 and spent $830 on ads...add refunds, and its a failure.

The same calculation i made with payouts of product $138.35 / per sale (one of the high paying CB products)
Using the same formula
We need 12035 impressions/searches a day and 361050 search volume monthly. $301 Adwords spending/daily

And so on...

Now, i said of course i am using rough averages. If you pay les than $0.50 - the better, this is certainly a goal! If you have less competetion (maybe no competition)...you might have way better CTR than 5%, and also a higher conversion rates than 1:83 are certainly possible!

The interesting thing about my calculations is actually the needed search volume of a keyword....in regards to the average prices of clickbank products. You see that we need GIGANTIC search volume to make a GROSS of $1000/day! Otherwise we wont even get the clicks!

Using this "formula" and the averages i took this means that a goal of making $1000/day would only be possible using ultra-main stream keywords...like "lose weight" and similar. Smaller niches don't even have that search volume!

Secondly, since we make GROSS...for a real PROFIT of actual $1000 you need even more sales/clicks..after deduction of adwords costs...

Your thoughts?
#&lt&gt #<> #affiliate #calculations #interesting #marketing #ppc
  • Profile picture of the author dburk
    So what you are saying is that you need a high volume of sales to make a large profit on a low priced product?

    Isn't this just basic math?

    Focusing on a single keyword would obviouly require a high search volume, but there is no reason that you couldn't advertise on thousands of lower volume keywords to acheive the same volume. Ultra high CTRs, Conversion rates and profit margins will lower the required search volume for any given profit goal.

    You can't expect above average results if you base everythng on average performance. Why focus on a single factor when you can optimize them all?
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  • Profile picture of the author GeorgR.
    dburk, i agree!!

    Of course, my calculations are VERY basic math, and yes, i assumed rather mediocre/worst case scenarios...eg. with my 1:85 conversion rate.

    You are also right with a the number of keywords, but the basics still stand: No matter how many keywords, you NEED an impressive amount of impressions/search volume.
    You will see that with many niche products off clickbank it is virtually impossible to make eg. $1000/day...
    a) product doesnt pay enough
    b) search volume for small/medium niches is just not there

    Look at my frst example with the $50 payout. We're talking about approx 1MILL (!) search volume a month.

    And yes, a LOT room for tweaking, of course.
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  • Profile picture of the author lassitermarketing
    PPC + affiliate marketing is a total joke. I have actually managed to launch two profitable campaigns but I just had to pause them because I don't have a million dollars in cash laying around. Yes, one is 35% ROI and the other over 50% but what does that really mean in net profit to me? Almost $200.

    Wow! Just 20 more of those and I guess I can actually make a living at this.

    Or NOT since I don't have a credit card with a million dollar limit. What a joke.
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    Susan Lassiter-Lyons
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  • Profile picture of the author GeorgR.
    yes, on a certain level i agree, and what i wrote certainly does NOT prove the opposite

    The "problem" with adwords is that its almost "addictive" since it is the quickest way to get some sales. But...always, always work on your organic traffic and rankings also...with the goal to "get away" from the Adwords drug in the long run.

    However..give me some "secret" keyword...some killer niche.... the story might look different. PPC and Affiliate programs is just not that easy as many "IM training courses" make you believe! Especially not for a newbie. Keyword research is..excuse the pun, "Key" <--- and this can be a very complex thing and it needs skills and tools.
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  • Profile picture of the author Sean Kelly
    I really think you should listen to what Ryan Deiss has to say about making $10k / month from only 4 sales a day at $27 a pop. On the surface those mathS don't add up but in reality they do.

    http://www.continuityblueprint.com/members.html

    Not an affiliate link.

    If you don't have the answer to the OP's question and don't take the time to watch his two free videos you might as well go get a job pumping gas because you're never going to make it online.

    Sean
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  • Profile picture of the author GeorgR.
    could you maybe sum up what he says?

    the reason is that there is indeed a number of good guides out there dealing with he subject, eg. for sure one of them is "commission blueprint".

    HOWEVER - in a nutshell they all say the same thing, basically starting with basics about keyword research, this and that we already know, chosing whatever product from clickbank......and then do split testing, CTR and conversion testing til you're blue in the face... weeding out the unprofitable ads, improving landing pages, keywords and so forth.

    does this course have anything new in it?
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  • Profile picture of the author ShabirAli
    with my calculations , i can make upto 5000$ a day but i am currently makin half of this earning.
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