I guess I would be called an Internet pioneer, having been doing business on the Internet for over 12 years. What I've seen and experienced are some major changes in affiliate marketing. It really wasn't that long ago that only a handful of large online sites literally ran the affiliate business world. Those few sites still have more affiliate members than most, however what has changed is that just about anyone can have an affiliate program by using sites such as Clickbank and Paydotcom to name only two. Whereas the big sites offer 5-8% commissions these new sites have customers that pay out up to 70% commissions!
This high rate of commission is just for placing a link on your site to a landing page. If the individual you sent, to that site, buys the product you earn the commission. Pay Per Click has pretty much changed the affiliate landscape because today you don't even need a website to advertise your affiliate link. You can place a pay per click ad on one of the large ppc networks such as Google or Yahoo. If a person clicks on your ad and goes to the affiliates landing page and buys the product you earn the commission. If you have put 2 and 2 together you figured out that PPC ads are driven by keywords. When you set up an ad you select and bid on a range of keywords. When someone searches for something using one of those selected keywords, your PPC ad will come up.
Pay Per Click ads at both Google and Yahoo are driven by keywords. You think of keywords that people would click on in a search and submit them to your PPC ad set up. The PPC ad account now asks you how much are you willing to bid on each of those keywords and you place a maximum bid. Using Google Adwords, for example, Google will tell you approximately how many clicks you should expect to receive on each of your keywords so that you can estimate how much per day you are willing to spend. Let's say that you decide that you can afford 10 cents per click with a maximum charge of $25.00 per day, that would equal about 250 clicks on your PPC ad. That doesn't mean that 250 people will actually buy the product it only means that 250 have clicked on the ad and gone to the landing/sales page. The amount that clicks and then actually buys could be 10% of the clicks, 1% or even .1%, no one really knows until they start a campaign, what this conversion to sales rate is.
Up to this point I have been theoretical lets look at some potential real world scenarios, because this is where the pay per click madness begins. You decided to be an affiliate for Trek mountain bikes and one of your most important keyword phrases was "mountain bikes." Remember your budget is twenty five dollars per day. Google tells you that in order for you use the keyword phrase "mountain bikes" it will cost at least $5.00 per click, and you still won't know what your ad ranking will be because Google will not divulge that information. At 5 bucks a click you'll hit your max of $25.00 with only five clicks. You can't run a PPC program on 5 clicks per day. Should you quit the PPC market? Perhaps a look at some alternatives, might be in order, to answer that question.
You've astutely figured out at this point that getting 5 or 10 clicks per day just won't do it for your PPC ad. You should have at least 100 or more to make it work. Unless your affiliate ad copy or sales page is so dynamic that you can get a 50% conversion rate off just a few clicks, I would suggest a keyword generation tool. You don't need to buy anything right away because there are a number of free services on the Internet which you can find at our blog below. I think you can see the point I am trying to make, that is pay per click advertising can wipe out your bank account quickly unless you place the proper controls on your ads.
Testing your theories on a smaller PPC network is one way of validating your business hunches before committing to big bucks. There are quite a few of these, what I like to call, "second tier" PPC networks that are ideal for trying out ideas in multiple ads before using the big PPC networks like Google and Yahoo.
At the end of the day, you'll be a lot happier that you tested your hunch on a smaller network to find that it wasn't the right program to run after all, and you saved yourself a lot a money, time and aggravation.
This high rate of commission is just for placing a link on your site to a landing page. If the individual you sent, to that site, buys the product you earn the commission. Pay Per Click has pretty much changed the affiliate landscape because today you don't even need a website to advertise your affiliate link. You can place a pay per click ad on one of the large ppc networks such as Google or Yahoo. If a person clicks on your ad and goes to the affiliates landing page and buys the product you earn the commission. If you have put 2 and 2 together you figured out that PPC ads are driven by keywords. When you set up an ad you select and bid on a range of keywords. When someone searches for something using one of those selected keywords, your PPC ad will come up.
Pay Per Click ads at both Google and Yahoo are driven by keywords. You think of keywords that people would click on in a search and submit them to your PPC ad set up. The PPC ad account now asks you how much are you willing to bid on each of those keywords and you place a maximum bid. Using Google Adwords, for example, Google will tell you approximately how many clicks you should expect to receive on each of your keywords so that you can estimate how much per day you are willing to spend. Let's say that you decide that you can afford 10 cents per click with a maximum charge of $25.00 per day, that would equal about 250 clicks on your PPC ad. That doesn't mean that 250 people will actually buy the product it only means that 250 have clicked on the ad and gone to the landing/sales page. The amount that clicks and then actually buys could be 10% of the clicks, 1% or even .1%, no one really knows until they start a campaign, what this conversion to sales rate is.
Up to this point I have been theoretical lets look at some potential real world scenarios, because this is where the pay per click madness begins. You decided to be an affiliate for Trek mountain bikes and one of your most important keyword phrases was "mountain bikes." Remember your budget is twenty five dollars per day. Google tells you that in order for you use the keyword phrase "mountain bikes" it will cost at least $5.00 per click, and you still won't know what your ad ranking will be because Google will not divulge that information. At 5 bucks a click you'll hit your max of $25.00 with only five clicks. You can't run a PPC program on 5 clicks per day. Should you quit the PPC market? Perhaps a look at some alternatives, might be in order, to answer that question.
You've astutely figured out at this point that getting 5 or 10 clicks per day just won't do it for your PPC ad. You should have at least 100 or more to make it work. Unless your affiliate ad copy or sales page is so dynamic that you can get a 50% conversion rate off just a few clicks, I would suggest a keyword generation tool. You don't need to buy anything right away because there are a number of free services on the Internet which you can find at our blog below. I think you can see the point I am trying to make, that is pay per click advertising can wipe out your bank account quickly unless you place the proper controls on your ads.
Testing your theories on a smaller PPC network is one way of validating your business hunches before committing to big bucks. There are quite a few of these, what I like to call, "second tier" PPC networks that are ideal for trying out ideas in multiple ads before using the big PPC networks like Google and Yahoo.
At the end of the day, you'll be a lot happier that you tested your hunch on a smaller network to find that it wasn't the right program to run after all, and you saved yourself a lot a money, time and aggravation.
About the Author:
We have dozens of articles on pay per click advertising so check out our home business blog or you can go to our Pay Per Click blog pages to find other advanced strategies for Pay Per Click advertising.. This article, Thinking About Pay Per Click Advertising: Read This First is available for free reprint.
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