How Much Profit is a Sufficient Amount? Read This.
Posted on July 4, 2009
Filed Under Business Models | Leave a Comment
Optimization is one of the most typical issues amateurs have when using Pay Per Click (PPC) advertising, like Google Adwords.
Simply picking some good keywords and paying a high Cost Per Click ( CPC ) rate isn’t going to keep you in business long. There’s actually some simple arithmetic behind it that will noticeably help you in finding your way to profitable PPC campaigns.
Before you start a PPC advert campaign to sell your products, you must know the following 2 things:
1.How much profit you make from each sale
2.How many unique visitors you’re able to your website (on average) before a sale is made( Note: you should be able to get statistical data from your website host that list the quantity of unique visitors to your website on a given day.
Let’s say you sell a dog coaching course for $47.00 and you figure out your profit to be $40.00 per sale. You find that your site gets 100 unique visitors before you generate one sale.
So, taking the info above…. for each unique visitor, you can pay $40.00 / one hundred = 0.40 cents to break even point, make no cash and lose no money. However, since your goal is to make money, you obviously need to pay less for each unique visitor.
Now when you research the keywords and keyphrases to use in your PPC campaign, you now know that you can’t spend more than .40 cents on any click to stay out of the negative. A good plan might be to find the keywords and keyprases that will get you a decent Adrank which is the position of your ad with a price of .25 cents or less.
Let’s say you target to pay .25 cents ( approximately ) for each click to your internet site. That should leave you with .15 cents profit for each buyer. Granted, not all consumers make a purchase, but at last if your conversion rates stay the same you must average .15 cents profit on each click.
If you make .15 cents on each unique visitor, and you drive 1000 unique visitors to your website each day through your PPC ads, then you will make (on average) 1000 x .15 = $150.00 per day.
There’s the simple math behind PPC advertising…
If you’re serious about making money with Google Adwords, then you really need to take Chad Trents Profits Blueprint Course. Working From Home Is Hard, If You Have The Wrong Information.
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