How would
you like some traffic? How about some cheap targeted traffic?
No problem. The pay-per-click search engines are exactly what
you need to inject your web site with a fresh stream of
targeted potential customers -- people who are actively
searching for what you're offering -- without the typical
expenses and risks associated with many other forms of online
advertising.
A Quick
Overview:
Pay-per-click
search engines are much like auctions -- they allow you to
bid for top-ranking positions under keywords of your choice.
For each visitor who searches the keyword(s) you rank under
and then clicks through to your web site, you pay whatever
you bid. Prices typically range from 1 cent to numerous dollars
per click-through for popular keywords.
And this
means that there are three key advantages to bidding
on keywords in the pay-per-click search engines:
- You
only ever pay for advertising that works because you
only pay when someone actually clicks through to your web
site. This means that pay-per-click search engines can be
a cheap way to draw targeted traffic to your web site.
- Pay-per-click
search engines will list your site within as little as
a couple of hours -- a couple of days at most. So rather
than waiting weeks, even months, for your web site to be
listed like you will with many of the other search engines,
you can start profiting from the increased traffic and sales
almost immediately!
- All
you need to do to be ranked in a #1 spot is outbid
the other sites. It's a pretty straightforward process compared
to achieving and maintaining a top ranking position in the
"regular" search engines.
Obviously,
the pay-per-click search engines are a powerful opportunity
to increase your web site traffic for little cost.
The trick, though, is making certain that you choose your
maximum bids based on the monetary value of one visitor to
your web site.
And this
is where a lot of people get confused or make costly mistakes...
They either abandon bidding in the pay-per-click engines because
it seems too confusing, or they bid more than a visitor is
actually worth to their site, losing money on their advertising!
Strategies
For Maximum Pay-Per-Click Success:
In the
following article, I'm going to lead you through a simple
step-by-step process that will show you how to collect the
numbers you need to calculate the value of a visitor to your
web site -- using a special three part formula -- and how
to use this information to purchase targeted advertising in
the pay-per-click search engines.
| Step
#1: |
Compile
A List Of Statistics That Includes Your Unique Visitors,
Total Sales, Gross Revenue, and Total Expenses for A Set
Period of Time. |
Before
you'll be able to start calculating the worth of your visitors
and what you can afford to pay for advertising, you'll need
some key figures; chiefly total number of sales, gross revenue,
total expenses, and unique visitors for a set period of time.
A)
Total Number of Sales:
This figure
is easy to calculate -- you probably keep a close eye on your
sales totals anyway. Just add up the number of sales you have
made over a set period of time. For example, this month you
may have sold 73 widgets. So your total number of sales equals
73.
B)
Gross Revenue:
Here's
another figure that you probably already have at your fingertips.
After all, what business owner doesn't keep track of their
gross revenue? If you sold 73 widgets for $10 each this month,
your gross revenue would be $730.
C)
Total Expenses:
This is
an important figure that many new business owners neglect
because, honestly, it's just more fun to calculate gross revenue.
However, until you know your total expenses, you won't be
able to accurately calculate your net revenue -- your "in
the pocket" profits!
To guarantee
that your business always generates a profit, your gross
revenue should always be greater than your total expenses.
So sit down and start adding up all of the expenses that you
deal with to produce, package, and deliver your product or
service. This figure should also include all of your operating
costs for a set period of time.
D)
Unique Visitors:
Frequently
confused with "hits" (which refers to the number
of times each file that makes up a particular web page has
been requested from your web host's server), "unique
visitors" refers to the number of different people who
visited your site. And it's the most important measure of
web site traffic hands down!
To calculate
the number of unique visitors to your web site, you'll need
to contact your web host to get your server logs. (For those
of you who don't know what a "server log" is, it's
simply a file that records each time someone requests one
of your web pages and the files associated with it -- and
it's literally a gold mine of data!)
Your web
host should be able to provide you with your server logs.
In fact, they may already have log analysis software that
will convert your server logs into easy-to-read reports, graphs,
and charts. If not, though, you can download your own log
analysis software by searching "log analyzers" at
Download.com.
WARNING!
If you decide to research and test log analysis software,
be careful to look for those that offer "unique visitors"
as part of their reports, not just "user sessions."
One visitor may return to your site numerous times (user
sessions), so to be certain your calculations are accurate,
you must know "unique visitors."
| Step
#2: |
Calculate
The Value Of A Visitor To Your Web Site. |
Once,
you've collected the statistics and figures you need, doing
the actual calculations is the easy part. Simply plug the
numbers into the following 3 simple formulas:
A) Conversion Rate: Figure out how many unique visitors you
need to close one sale.
Unique Visitors / Total Number of Sales = Conversion
Rate
Example:
If over the month of November, you calculate that your web
site received 4,298 unique visitors, and you sold 35 widgets,
your equation would look like this:
4,298 Unique Visitors / 35 Sales = 122.8 Unique Visitors
Per Sale
So
in this case, your conversion rate would equal 122.8, which
means that you typically close 1 sale for every 122.8 visitors
to your site.
B) Net
Profit Per Sale: Figure out how much profit you earn on a
single sale.
Gross Revenue - Total Expenses / Total Number of Sales
= Net Profit Per Sale
Example:
If over the month of November, you sold 35 widgets for
$97 each, your gross revenue would be $3,395 (35 X $97).
And let's say you calculated your total expenses (production,
packaging, web host fees, etc...) for the month of November
to be $2,537.
This means that:
$3,395 Gross Revenue - $2,537 Total Expenses / 35 Sales
= $24.51 Net Profit Per Sale
In
this example, your Net Profit Per Sale would be $24.51.
This is "in your pocket, after expenses, you can bank
it" profits.
C) Visitor
Worth: Figure out how much a single visitor is worth to you.
Net Profit Per Sale / Conversion Rate = Visitor Worth
Example:
This is the easy part. Just take the Net Profit Per Sale
that we calculated in part b ($24.51) and divide it by the
Conversion Rate that we calculated in part a.
$24.51 Net Profit Per Sale / 122.8 Conversion Rate = $0.1995
or $0.20
So
in this example, each visitor to your web site is worth
$0.20. (Not to be confused with the value of a customer,
which is $24.51!) This means that you can afford to pay
as much as $0.20 to attract one new visitor to your web
site without losing money.
| Step
#3: |
Put
Yourself In Front Of Your Best Potential Customers. |
Okay!
You're almost ready to put your newfound knowledge to profitable
use and start buying targeted traffic in the pay-per-click
search engines. I say almost because there is one more
important step you may need to take...
Do you
know who your target market is? Do you have an accurate profile
of the folks who are purchasing from your web site? And do
you know what keywords they're searching to find your web
site?
If you're
not sure, then I'm afraid you'll need to do a bit more homework
before you start purchasing traffic because until you know
who your customers are and what keywords they're using to
find your web site, you risk wasting money on unqualified
traffic.
The best
way to learn who your customers are and why they bought your
product is by speaking with them directly. Get on the phone,
do an e-mail survey, offer a free gift for feedback... whatever
it takes! The more you know about the people who have already
bought from you, the easier it will be to target new customers.
However,
another way you can figure out which keywords your target
market prefers is by using WordTracker,
an online tool that collects the search results from 24 major
search engines and compiles them into a database which is
constantly being updated.
With WordTracker,
you can simply type in your keyword or key phrase, and it
will return a list of related keywords and phrases. This is
a really useful feature because it will often produce keyword
combinations that you may not have thought of!
| Step
#4: |
Use
This Information To Purchase Traffic In The Pay-Per-Click
Search Engines. |
Now that
you know the keywords and phrases that your best potential
customers are typing into the search engines, and you know
the worth of one visitor to your web site, you're ready to
start purchasing traffic. You can start bidding on the targeted
keywords and phrases that you've researched based on what
one visitor to your web site is worth.
In the
earlier example, a single visitor to your site was worth 20
cents. So you could afford to bid as much as 20 cents per
visitor in the pay-per-click search engines without losing
money.
Now of
course, you'd probably want to bid significantly less than
that, because you'll want to still turn a profit. But if you
were to bid 7 cents per visitor, and it took 122.8 visitors
to close a sale, your profits would still be quite substantial:
(20 cents profit per visitor - 7 cents advertising cost per
visitor) X 122.8 visitors to close the sale = $15.96 Total
Net Profit Per Sale
Sure,
your net profits drop a bit when you pay for advertising,
rather than rely on free sources of traffic. However, you
need to remember that your total sales volume is going
to go up -- perhaps considerably -- as long as you purchase
targeted traffic! And that means more cash in your pocket
at the end of the day!
Pay-Per-Click
Search Engines:
The pay-per-click
search engines that you choose to buy traffic from will depend
on your budget. Overture.com (formerly GoTo.com) is still
the granddaddy of the pay-per-click search engines, but its
popularity has driven up the cost of advertising there. Minimum
bids now start at 5 cents per visitor, there's a set-up fee
of $50 (though it's applied to your click-throughs), and there's
a monthly minimum of $20.
Of course,
with that said, if you can afford Overture, it's still the
best choice for driving targeted traffic to your site. You're
likely to get a higher volume of traffic faster than
with any of the others. Plus, if your site is listed among
the top 3 under any particular keyword, you can expect your
site listing to appear in AOL, Lycos, and AltaVista searches,
too.
Other
good choices for purchasing traffic include:
From this
list, I would recommend purchasing traffic from FindWhat first
because this is one of the faster-growing, better-known pay-per-click
engines. But all of the above should prove to be good sources
of cheap, targeted traffic.
In the
less popular pay-per-click engines, you can still purchase
listings for as little as one cent per visitor. And remember
that while you may not receive high volumes of traffic from
any one in particular, because you only ever pay for actual
click-throughs to your site, you never lose money!
Final
Thoughts:
Without
a doubt, purchasing traffic from the pay-per-click search
engines is one of the most profitable, most effective ways
to drive targeted traffic to your web site. As long as you
always base your keyword bids on the value of one visitor
to your web site, you can be confident that your advertising
will always be profitable.
If you're
new to Web statistics, you'll want to base your initial advertising
budget on the costs of acquiring a first time customer. Over
time, however, you'll be able to calculate the value of your
lifetime customers, and use these figures to consider purchasing
higher volumes of advertising.
To ensure
you remain profitable, though, and until you're comfortable
accurately calculating these statistics, you should focus
on purchasing your advertising based on the value of your
first-time customers. Remember: Don't GUESS! Base your
advertising budget on tangible statistics -- not your predictions
of what your site might earn in the future!
