Affiliate marketing using Adwords bid for profits
July 12, 2012 4 Comments
Google Adwords bid to profit may not be as experts said so obvious. In five minutes of the videos, they will show you some quick tips to figure out what keywords to bid how much.
It is trivial for the process what you think and walk away. Then something strange will happen: you are absolutely unable to implement their recommendations. No matter what you try, you will struggle to reach breakeven for your campaign.
Why is this? Experts’ suggestions are entirely within your expectation, why can’t you experience the success? The likely reason is that the improper bidding settings. Many Adwords beginners do not know how to calculate profitable bid amount. In fact, this is very simple, but you have to be very careful to complete the process. The following is the complete steps:
1. Affiliate marketing sales conversion rate
Based on past affiliate marketing experience in sales, you sold the products to determine a rough conversion rate. For example, if 100 people to your sales page, there are 2 transactions, then you have a 2% conversion rate. Even if you can not estimate it perfectly, make a rough estimation and then go to the next step.
2. Affiliate marketing product sales profits
If you sell affiliate marketing products 50% commission, you may be tempted to simply multiply by the price of 0.5. In fact, if you use Clickbank or Paypal, they will charge a fixed fee, so your sales profit is less than 50%; you need to calculate the fee, too.
3. AdWords keyword bid
The sales profit is multiplied by the conversion rate. For example, if your conversion rate is 2% and the sale profit is $ 50, then you get $ 1 from 0.02 multiplied by $ 50. This means that you can afford to spend the maximum amount (if your conversion rate is 2%) bid $ 1 – your break-even point. Bid higher than $ 1, you are actually losing money.
The most important thing is to observe the relationship between all the variables. For example, thinking about how to improve your conversion rate. If your current conversion rate is not profitable, you may want to improve your sales page. This means that you can raise your bid but do not exceed your break-even point.
In addition, you can increase the price of your product (not significantly reduce the conversion rate), then you can afford to bid more without exceeding your breakeven point. In general, it is not feasible to increase the price of your product for affiliate marketing programs.
In addition to simply set the bid below your break-even point, eventually you will want to improve your bid to produce the maximum amount of profit. For example, your affiliate marketing sales profit is $ 50, the product has a 2% conversion rate. The available keywords you can bid per click $ 0.5, and get 600 visitors per day or per-click pay 20 cents, and access to 200 daily visitors. Which should you choose?
Case I, you will sell 12 units, sold a total profit of $ 300 ((12 * 50) – (600 * $ 0.5)).
Case II, you will sell 4 units, sold a total profit of $ 160 ((4 * 50) – (200 * 0.2)). Even in Case I, you are spending more per click on advertising; it is more profitable for total sales, which means you should choose this option.
At first, the use of the whole mathematics seems to be unnecessary, but it is not. Do not track in terms of these variables and the basis for making decisions, you will not know how to bid; you will suffer the consequences that affiliate marketing can not be profitable.