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Help & Strategies
1) If you sell a product or service, or monetize your site by any means that results in a specific reaction (i.e., a visitor arriving on your download page after purchasing your e-book through ClickBank, or arriving at your "Thank You" after filling in a "finder-referrer form"), use either Yahoo!'s Conversion Counter, or Google's Conversion Tracker to measure the results of your campaign.
If you convert 2 visitors out of every 100, and make $25/sale,
bidding anything less than $0.50/click is a positive ROI.
At $0.50/click, you're breaking even, and at anything more than $0.50,
you're losing money. Of course, there are always exceptions. For example...
You may be OK with losing a little money to obtain a customer especially
if s/he is likely to purchase from you again and again. This is a
decision only you can make... it's your call.
2) Suppose you're a netrepreneur who monetizes your site with
a combination of affiliate programs and AdSense ads.
Hopefully you're using SBI! tracking links in combination with your
click-in and click-through data to determine what percentage of
visitors click-through to any affiliate program on your site.
That, in combination with your CR and payout per sale, will give you
a pretty solid idea of the value of a visitor.
Of course, if you run AdSense ads you'll need to factor them into
the equation as well. That's pretty simple. Just log into your
AdSense account, and view your critical data (CTR, CPM, and so on).
If you want to track things more accurately, set up a URL channel
for each page you plan to send PPC traffic. Google will report on
the CTRs and CPMs for these pages individually. This gives you more
granular data to determine the true worth of a visitor.
Let's try an example...
Suppose for every 100 visitors to a page, 35 click through to your
affiliate partner's site. Your Conversion Rate is 3%, and your payout
per sale is $17. So for every 100 visitors to this page,
you can expect 1 sale, and $17 in revenue. But we're not finished yet...
For this same page, AdSense reports a CTR of 7.5%, and CPM of $15.55.
That means for every 100 impressions you'll get 7.5 click-throughs
(each worth about $0.20 each) for a grand total of $1.56.
Finally, to determine the true worth of your visitor, add your
AdSense revenue to your affiliate revenue. $17 + 1.56 = $18.56.
This means that for every 100 visitors, you will earn $18.56. So as long as you bid
$0.18 or lower per click, you obtain a profitable ROI on this campaign.
OK, I realize this may be a little more complicated than you'd like.
Relax... there is a simpler solution.
The easiest way to establish a rough estimation of the value of any
visitor to your Web site is to divide the revenue generated by your
site in a month by the number of visitors in that same month.
If your site earned $1,000 in revenue and received 3,000 visitor in the
same time period, each visitor is roughly worth $0.30 (1,000/3,000 = 0.30).
So you should not spend more than $0.30 per click. And, after a month or so,
you'll want to confirm that your PPC visits are earning you income as
they should be. For example...
If you budget for 50 PPC visits per day, you'll increase your monthly
visitor total by 50% (50 X 30 = 1500/month). Your income should also
increase by 50%. In other words, if your site is not generating
$1,500 in revenue for the month that you are advertising,
your visitors are no longer worth $0.30/click.
Although the key here is to you know exactly what a visitor is
worth to you, taking it the extra step allows you greater flexibility
when you create your campaigns.
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