How to profit buying Pay-Per-Click advertising

Posted on October 7, 2007
Filed Under Internet Marketing

About 6 months ago I decided I wanted to run an ad on Google Adsense promoting an offer I thought had serious potential. I had no idea what I was doing. I rushed over to Google Adwords and signed up for an account. I created a campaign, added in a couple hundred key words, wrote my ad and sat back waiting for the money to roll in. After a week went by and I had spent a couple hundred dollars on traffic and had made only 1 sale, I had to stop the campaign. I was losing 90 dollars per hundred spent. What was I doing wrong? As it turns out, just about everything.

In order to profit using pay-per-click, it’s important to do your homework first. Here are some steps you can take BEFORE you pay for your first click.

Step 1, research the product

Visit the landing page

Is the offer compelling?
Is the signup form easily accessible?
Are there a bunch of distractions on the page that may cause your visitor to leave the site without completing the offer?

Step 2, Find out how the offer converts

If you found the offer through an affiliate network (like cj.com), contact your account service rep to find out what the average click-to-lead percentage is.

Step 3, See how many ad views you can expect

Use a program like wordtracker.com to see approximately how many searches per day are done for your keywords. Assuming your ad is on page 1 of the search results, this is the approximate number of ad viwes your ad will receive.

Step 4, figure out where your ads are likely to display

In the Tools section of Google Adwords you’ll find a keyword tool that can help estimate the position your ad will be displayed for given keyword searches. Use this tool to figure out how much you are going to need to bid per click in order to get your ad on the first page of the results.

Once you have the above information, you can now do some simple math to decide if this is a product you are willing to advertise.
A = Cost Per Click
B = # of clicks to make a sale
C = Affiliate Payout
D = Cost Per Lead

A * B = D
C - D = Your profit

When first starting out, I suggest you error on the cautious side when it comes to figuring out how many clicks it will take to make a sale.

Now that you’ve done your homework, it’s time to put it in to action. If you haven’t done so already, Sign up for a Google Adsense account.

When creating your campaigns, there are several factors to keep in mind. Here’s a list:

For tracking purposes, create 1 campaign for Google search results, 1 campaign for Google + Network search results and 1 campaign for content results. Change the campaign settings to target where you want the ads displayed.
Create targeted ad groups. By that I mean, keep each ad group to only a handful of keywords that are all very similar. If you find your keywords are too varied, create a separate ad group for the uncommon keywords.
Create 2 text ads for each campaign. You need to be A/B testing in order to see what is or isn’t working. Your two ads should be similar so you can learn what does or doesn’t work with your ads.
And most importantly, use the conversion tracking tool. This will allow you to figure out which keywords and text ads are working for you and which are not. If you aren’t using this tool, you will be guessing at results.

Some additional tips to keep in mind:

Google doesn’t like it when you have a ton of keywords in your ad group for search results. You want to limit the number of keywords so that you give the impression of being targeted to a specific field, rather than shotgun blasting your ads. The more targeted the better when it comes to Google.
Don’t pause/resume/pause/resume your campaigns. Google likes to see that you have some stability. Campaigns that stay active for an extended period of time will get more impressions thrown their way.
If you have an text ad that is getting a horrible click through rate (CTR), create a new one and kill the old one. A better CTR means more impressions for your ad.

You may notice that all my information relates to how to run PPC ads on Google, but not on Yahoo or MSN. Since Google supplies it’s search results to many other online search sites, by advertising in Google, you are also advertising across many other networks. When you are just starting out I suggest you stick to Google. If, over time you have come up with a successful ad campaign that has had time to age gracefully, you may want to consider creating the same ad in the Yahoo or MSN networks. This is an if, and only an if, you are already seeing a steady profit from the same ad over an extended amount of time.

Best of luck to you.

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