Originally Posted by PPC-Coach
First question: what is your maximum spend per keyword?
Say the offer you're promoting pays $5. You say that you can safely spend $4 in testing EACH keyword. Meaning if a keyword converts, you make $1 profit. ($5 - $4 = $1).
Now how many keywords can you fully test at $4 spent PER keyword?
If your budget is $100, then it's $100 / $4 = 25 keywords.
Knowing that 90%, (minimum), of your tested keywords will NOT work, that means you're looking at about 25 x 90% = 22.5 keywords that will spend $4 but not convert. That also means that 2.5 keywords will work, they will convert and they will make you $12.50 in revenue on $10 spent. ($2.50 profit.) (Assuming .5 of a keyword just for illustration purposes).
So now you've spent $100. Made $12.50 and therefore lost $87.50 overall right? Yes on the surface. And this is the point where most quit.
However if you dig into your campaign, you had 2.5 keywords that worked. They were producing $1 profit for every $4 spent. So what's the solution?
Find more of those winners until your winners are enough to hit your target profit per day.
If your target profit per day is $100, how many winning keywords do you need to find at $1 profit per keyword? 100. To find that 100 winning keywords, how many keywords would you have to test? 100/(100%-90%) = 1,000. How much budget would you need at $4 per keyword to test 1,000 keywords? $4 x 1,000 = $4,000.
In your testing, how much of that budget will be spent on crappy keywords that don't work? $4,000 x 90% = $3,600
So the question is answered.
If you want to profit $100 per day, assuming my numbers above, you need a budget of $4,000 spread across 1,000 fully tested keywords. You'll be "losing" $3,600 in testing at the start to make $400 in profit. Now you should have 100 keywords producing $100 profit per day assuming they all hold steady and now everyday is a profit day for you.
The question is how many have the patience to do this?
The answer is very few.
I wanted to post this to add to my post quoted above, (which I should have to begin with).
You CAN start small with any paid traffic. The budget you have depends on you. You CAN start with $10 and keep reinvesting profits back into your campaign until you hit your goal. But you've got to know that if you want to make $100 per day or $10 per or whatever per day, you'll be spending at minimum THAT amount per day in buying traffic.
So if your goal is $100 per day profit. You will be spending at least $100 per day to make it. Typically you'll need to spend $200 or more to make $100 profit. But you have to crawl before you walk, walk before you run and run before you sprint. Don't expect to get there right away by spend $10 per day. It is not going to happen.
IF your budget is $10 per day and you're profitable on that $10, then you take what you've earned and reinvest it back into your campaigns, raising your budget every time.
$10 spent returns $11 per day. $1 profit.
Now budget can be $11 per day.
$11 spent returns $13 per day. $2 profit.
Now budget can be $13 per day.
$13 spent returns $16 per day. $3 profit.
Now budget can be $16 per day.
$16 spent returns $20 per day. $4 profit.
Now budget can be $20 per day.
Do you see a pattern? Your budget just went from $10 per day starting out to $20 per day just by reinvesting back into buying MORE traffic. Now I will warn you that your progress will typically not be as linear as that. You will have ups and downs, BUT if stick it out and keep putting money back in, you'll get there.
So next time someone asks, "Is $___ enough to start with PPC or FB Ads or POF or CPV" refer them to this thread. The answer is yes, but know it's going to take time and reinvestment into your campaigns to do so.