For many products, pay-per-click search engines can be very good. The idea is that you decide what you're willing to pay per click through to your website.
In fact, now that advertising prices are much cheaper than they used to be you could really clean up by using the pay per click search engines.
It all comes down to knowing your numbers. What marketers call your metrics. We'll talk about the metrics of advertising in a moment.
If you know that you make $1 for every visitor to your web site, you could theoretically bid 75 cents per click and make money. Assuming, of course that the traffic was the same quality as your existing traffic.
Of course, I've found with advertising that is rarely the case.
The most well known of the pay-per-click engines is Yahoo! Search Marketing (formerly Overture).
With Yahoo! Search Marketing you just pay to be listed when the search results come up. In other words, you pay for “placement”.
It's relatively easy to get started. All you do is come up with a list of keywords that you want to check out, go to overture.com and in the search box on their main page just type in your first keyword.
When the results come up you'll want to look at the top right and click on “View Advertisers' Max Bids” so you can get a peek at how much everyone is paying for the keyword you're thinking about buying.
As an example you can use the keyword:
Type that into the search box and you'll see the first nine results are from paid advertisers.
Please don't click the links in the search results. Copy the URL from the results and paste that into a new browser if you want to see the site.
When we click the link to see the maximum bids Yahoo! Search Marketing shows us the top three people are paying anywhere from $1 per click to $0.21. Of course these bids change all the time. That's just what I am seeing today as I write this.
With some other keywords like “hosting”, the cost can be around $7 a click! It all depends on how much the advertisers are willing to pay. I'm sure they're watching their conversions closely and probably wouldn't continue to pay that unless they were profitable though.
If you're interested in promoting your favorite associate programs in the pay per click search engines it's easy to get started.
Just go to Yahoo! Search Marketing and access the advertisers center.
Yahoo! has created some pretty good demos to show you how their service works so you can watch those. Or, you can just type in a search term to see who's bidding on it and what they are paying “per click”.
Anyway, a lot of my friends bid a nickel to a dime on keywords. In the old days, you could bid a penny or two but the minimum now is $0.10 “per click”.
(Per click means that any time someone types in the same keywords you are bidding on and actually clicks your link, you pay the amount you've bid. Unless they click and visit your site you don't have to pay anything.)
I'm told by those who specialize in this form of paid advertising that the most important thing is to be on the first page of search results. What I learned is that it takes patience and experimentation to get profitable although you can get listed in the #1, #2 or #3 spot very easily if you're willing to pay to be there.
What you do is bid on all the logical words. Then, you watch your clicks like a hawk and see what converts and what doesn't.
Next you cut out the bad words. You probably won't be profitable until you cut out the words that generate a lot of clicks but no sales. Those are the dead wood that cost you money but don't make you money.
To make sure you know which keywords are converting you'll want to use some sort of ad tracking service. If you don't you'll never know which keywords are making you money and which are draining your balance.
Yahoo! Search Marketing isn't the only “pay per click search engine”.
You can hunt down the other pay per click search engines by typing “pay per click” in Google.com
I know I tried advertising on FindWhat, Kanoodle and some others. I got clicks but my clicks didn't convert.
I told my friend John Keel about this. He's a “pay-per-click” guru. John told me I just didn't know what I was doing! He says you have to refine the results. The bottom line is, you have to learn what you're doing and become an expert.
That's what you'll find with many of these methods. Whatever you do, you need to become an expert at it. That expertise is your competitive advantage. I don't know of any way to make money where you just click a button and forget about it.
I've seen methods like that before. But if they're that easy, in a heartbeat everyone else finds out about them, starts clicking the same button and the market is saturated overnight.
The path to profit is gaining specialized knowledge and information. What does that mean? That means becoming an expert. Buying “how to” products. Learning what you're doing. Becoming better at it than the next guy.
What Jon taught me is that the words you bid on have vastly different conversion ratios. What often happens is that you bid on a word that gives you high clicks and almost no sales. That will screw up your numbers really fast.
So you track everything and kick out the words that don't produce. You have to tweak and prune. You do that and you'll soon be profitable!
The price of profit is study and experimentation. Everybody I know who makes money in this business makes it by working at it.
For example, I ran across this helpful statistic:
43% of all clicks go to the number 1
16% to the number 2 spot
9% to third result.
If that is true, then it gives you important information for your bidding!
You'll find out about all the little tricks. For example, Yahoo! Search Marketing has a spreadsheet where you can bid on your words in mass. Submit a whole bunch of words all at once. That's pretty cool.
You can also use their “Keyword Suggestion Tool”. Just type in your word and Yahoo! will suggest other words for you that are similar.
Once you know how much you're making from an associate program on a dollars-per-click basis, you theoretically should be able to buy lots of traffic and make money.
The only hang up with that theory is your conversions. First of all, your sponsor's conversions will fluctuate within a range due to random variation. Some days and weeks you will convert more due to pure random chance and influences.
What's more, all traffic is not created equal. You can convert a high percentage of visitors to sales from one source of traffic and a low percentage from another source.
Traffic quality is everything.
Every now and then we get an email from an associate who says he/she sent us lots of “hits” or “clicks” and didn't make a sale. They want to know why.
The answer is that “hits” or “click” mean nothing. Where did the traffic come from? What is the quality of the traffic? How does the traffic match or fit the program being promoted?
Those are the questions you have to answer.
In our associate program we see the traffic that comes through our site. We can see every visitor and how long they spend on our site.
We will see traffic come through from a source that is obviously some form of very poor paid advertising. The visitors will stay on the page only a few seconds and NEVER click to a page two.
It makes me wonder if the advertising the person purchased is really a computer program that generates false click throughs. Why? Because if real people were involved, by default someone would click to page two sooner or later.
So the old saying “buyer beware” holds true. Don't buy a large amount of advertising from any source until you test a small quantity and make sure the traffic is good quality.
Why There Is No Such Thing As Cost Per Impression or Cost Per Click
Let's say you send 1,000 visitors to a sponsor or affiliate program. You buy those visitors from a pay-per-click search engine for a 10 cents each. In U.S. money, that is $100. Now, let's say you made two sales.
What you really paid is $50 per sale. You spent $100 to make 2 sales. So those two sales cost you $50 each. If you made 10 sales from the same traffic, your sales would have cost you $10 each.
What I'm saying is, ultimately there is no such thing as pay-per-click. All you really have is pay-per-sale. You bought traffic. You made 10 sales.
The 10 sales cost you $10 each. As long as your affiliate program pays you more than $10 per sale, then you made money.
Your goal is to double your money at bare minimum. Triple is better. So here are a few bottom line figures for you.
Assume a conversion ratio of 1/2 of 1%. That is low for some sites. High for others. But it's a good figure to use as an example. That means you make 5 sales for every 1,000 visitors you send your affiliate program or sponsor.
If you pay 10 cents each for those visitors or $100, and you make 5 sales, each sale costs you $20. So your affiliate program needs to be paying you a $40 to $60 commission for those numbers to work for you.
If they're only paying you $20 a pop, then you need double the conversion. You better be converting 1% of your visitors to sales.
Let's say you're on a pay-per-click search engine and that primo top spot costs you 50 cents per click. What are the numbers?
For every 1000 clicks, you're going to pay U.S. $500. Let's say your program turns 10 of those clicks into buyers. You have $50 a pop invested in each sale.
If you want to double your money, you better be getting $100 per sale. To triple your money, you need $150 per sale. Either that, or you need a higher conversion percentage than 1%.
Let's say your program converts 2%. Now what are the numbers? You have 20 sales. 500 divided by 20 equals 25. Each sale costs you 25 smackers.
To double your money, you need a commission of 50 bucks a pop from your affiliate program sponsor.
Why cost per impression doesn't exist
Same story. You go to a banner advertising network and buy 10,000 impressions for the same $500. You get 1000 clicks when your banner runs.
Your cost per click was 50 cents.
But cost-per-click means nothing. You can't bank that. You can't buy food with it. You must have sales. So you get 1,000 clicks and the same 20 sales. You're back to the same numbers as above.
The point is, in actuality, you aren't buying impressions. And you aren't buying clicks. The only thing that matters to you as an affiliate is cost-per-sale.
What if your program isn't giving you conversion rates that are profitable for you? Or they aren't paying you as high a commission as you'd like.
What do you do?
You have to try to increase your conversion ratio. The way you do that is by writing an endorsement for the product and placing it on your web site. By adding testimonials or other proof the product works. By displaying photos of the product.
You have to work on your end BEFORE the click to increase the results AFTER the click.
Perhaps you ask people to contact you if they have questions about the product. Perhaps you use one of the instant messaging systems to allow people to contact you live with their questions.
Another thing you can do is juice up the incentive to subscribe to your mailing list. That way, you can follow up with your prospective customer more than one time.
This puts the odds in your favor.
This article courtesy of Marlon Sanders' Associate Program Marketing Handbook. For 22 other ways to get more traffic and sell more associate program products grab your copy of the Associate Handbook today!