To Make Money, Sometimes You Have to Spend Money
Friends, hello again.
One of my top affiliate income producers has been taking hits over this past several months. It's a program where I was very excited last summer when I start producing checks of $150 per month. Those became $300, then $500, then $900, then topped out at $1450!
Initially I had no competition for this product, but as competition has found my little market sales/commissions began to slide while bid prices have gone up. I used to spend .10 per click and I'm now spending up to .50 on some keyword phrases.
I confess my mistake!
I made a mistake in trying to keep my bid prices low. After all, this is a campaign that has consistently brought me 10-15 times my monthly spend on pay per click advertising. Poor me. That fell to an all-time worst of only about 7 times my investment last month.
While I still have little competition and maintain the top bids on Overture, my competition on Google AdWords has grown increasingly.
Desperate, I HAD to Take Action!
I confess to a sense of desperation. As a result of that discomfort, I decided I was going to bid what I needed to bid to regain the top spot. My ad, afterall, was producing a 5.8% CTR and it's tough to top that (though possible as I've discovered).
With a sense of determination and mild trepidation I doubled my maximum CPC. It was like the first time I decided to pull out my credit card and put $50 into an Overture account. It felt like a big, scary step.
Drum Roll Please . . .
Here's what's happened with a little background:
1. I hit a peak of 47 sales in a single month for this $160 product last Spring.
2. July 2004 was my "worst" month since last October - 25 sales.
3. My average bid price for all campaigns on this product last month, July 2004, was .15. This produced 679 clicks with a CTR of 5.8%. Combined with my clicks from Overture, I had an overall conversion rate of about 2.5% - ie, 2.5 out of every 100 clicks bought.
4. This month my average bid price has climbed to .26 - a cost increase of nearly 73% per click. With a CTR of 7.9% the campaign has produced 225 clicks putting me on pace for 675 clicks for the month. Actually, a slight decrease from last month. BUT! And this is a big but, I already have 22 sales for the month through yesterday. This puts me on pace to reach 66 sales for the month - a personal best.
So, I can forecast that I will probably spend about $175.50 on advertising this month and generate commissions of close to $2000. This compares to last month when I spent $101.85 and I made $750. Is that an effective ROI? I'll take it.
Lesson learned:
I am a firm believer in the holding the top spot. Others claim that bidding for a lower spot means you'll get customers who are "more serious". In certain markets, for certain keyword terms this may be true. And, it may be a matter of budget. You may not have the budget - or the ROI to bid the maximum. But for an affiliate product with competition, at least in this case, it has clearly paid for me to have that top spot.
My strategy is, and has always been, to get the most targeted words possible. 675 clicks per month doesn't sound like a lot. But, the keywords are so targeted for this product, that I stand to convert somewhere between 2.5-5% of them. And on a product that pays a decent commission, that's a pretty nice ROI.
And, BTW, this is something that I spend maybe 8 hours per month on. And the majority of that time is simply checking stats and ensuring I'm right where I want to be. This product is the gem in my portfolio of products. But it's also proof that if you find the right product, you can do extremely well.
So. I hope you've found this example both useful and inspiring.
Wishing you Adwords riches,
John
PS - I joined Chris Carpenter's and Jeremy Wilson's new membership site this week, AdWord Mentor. I thought I'd take a look around and see what kind of value is there. So far most of my time has been spent on the chat boards, where I've learned quite a lot. They have people making as much money every week using AdWords as I'm making every month! So, I think it's always good to hang with people having better success than I am.
Anyway, they're offering a trial membership for $2.95 - good for a week. I'm not a membership site aficionado, but I think this one offers good value. I recommend taking a closer look if you have a sincere interest in mastering AdWords and making real money at it.
One of my top affiliate income producers has been taking hits over this past several months. It's a program where I was very excited last summer when I start producing checks of $150 per month. Those became $300, then $500, then $900, then topped out at $1450!
Initially I had no competition for this product, but as competition has found my little market sales/commissions began to slide while bid prices have gone up. I used to spend .10 per click and I'm now spending up to .50 on some keyword phrases.
I confess my mistake!
I made a mistake in trying to keep my bid prices low. After all, this is a campaign that has consistently brought me 10-15 times my monthly spend on pay per click advertising. Poor me. That fell to an all-time worst of only about 7 times my investment last month.
While I still have little competition and maintain the top bids on Overture, my competition on Google AdWords has grown increasingly.
Desperate, I HAD to Take Action!
I confess to a sense of desperation. As a result of that discomfort, I decided I was going to bid what I needed to bid to regain the top spot. My ad, afterall, was producing a 5.8% CTR and it's tough to top that (though possible as I've discovered).
With a sense of determination and mild trepidation I doubled my maximum CPC. It was like the first time I decided to pull out my credit card and put $50 into an Overture account. It felt like a big, scary step.
Drum Roll Please . . .
Here's what's happened with a little background:
1. I hit a peak of 47 sales in a single month for this $160 product last Spring.
2. July 2004 was my "worst" month since last October - 25 sales.
3. My average bid price for all campaigns on this product last month, July 2004, was .15. This produced 679 clicks with a CTR of 5.8%. Combined with my clicks from Overture, I had an overall conversion rate of about 2.5% - ie, 2.5 out of every 100 clicks bought.
4. This month my average bid price has climbed to .26 - a cost increase of nearly 73% per click. With a CTR of 7.9% the campaign has produced 225 clicks putting me on pace for 675 clicks for the month. Actually, a slight decrease from last month. BUT! And this is a big but, I already have 22 sales for the month through yesterday. This puts me on pace to reach 66 sales for the month - a personal best.
So, I can forecast that I will probably spend about $175.50 on advertising this month and generate commissions of close to $2000. This compares to last month when I spent $101.85 and I made $750. Is that an effective ROI? I'll take it.
Lesson learned:
I am a firm believer in the holding the top spot. Others claim that bidding for a lower spot means you'll get customers who are "more serious". In certain markets, for certain keyword terms this may be true. And, it may be a matter of budget. You may not have the budget - or the ROI to bid the maximum. But for an affiliate product with competition, at least in this case, it has clearly paid for me to have that top spot.
My strategy is, and has always been, to get the most targeted words possible. 675 clicks per month doesn't sound like a lot. But, the keywords are so targeted for this product, that I stand to convert somewhere between 2.5-5% of them. And on a product that pays a decent commission, that's a pretty nice ROI.
And, BTW, this is something that I spend maybe 8 hours per month on. And the majority of that time is simply checking stats and ensuring I'm right where I want to be. This product is the gem in my portfolio of products. But it's also proof that if you find the right product, you can do extremely well.
So. I hope you've found this example both useful and inspiring.
Wishing you Adwords riches,
John
PS - I joined Chris Carpenter's and Jeremy Wilson's new membership site this week, AdWord Mentor. I thought I'd take a look around and see what kind of value is there. So far most of my time has been spent on the chat boards, where I've learned quite a lot. They have people making as much money every week using AdWords as I'm making every month! So, I think it's always good to hang with people having better success than I am.
Anyway, they're offering a trial membership for $2.95 - good for a week. I'm not a membership site aficionado, but I think this one offers good value. I recommend taking a closer look if you have a sincere interest in mastering AdWords and making real money at it.
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