In the past I made $100 a month as a furniture affiliate. I was making 1 sale per 100 clickthroughs to the merchants and was a making around 25c per click.
To increase my sales I thought I would try Google Adwords. I started at 5c on around 20 terms and found that I was getting no clicks. I subsequently increased the budget on each click and only started to get clicks at 50c which meant I was paying more per click to my site than I was making from each click I was getting to the merchant.
So if 50% of the visitors to my site clicked through to a merchant I was spending 50c for every 12.5c of revenue. Obviously very bad.
However, I have read in several places that Adwords can be profitable for affiliates. If so how can this be done?