And so it’s time to post the first of our Clinic Q&A’s.  The first one comes from someone that would like to know a bit more about pay-per-click advertising (PPC).

“Having never ventured into PPC, but having heard the horror and success stories I was wondering:

How much cash do you need to put into PPC before you start to (hopefully) see a return?”

Here’s what Kieron, Kirsty and Shane had to say: 

As much as you can afford is the quick answer, allocate some budget that you can afford to lose and nothing more. My general rule of thumb is if I don’t get any conversions in the first 500 clicks then I give up and move on. 

This is one of those “how long is a bit of string” type questions, because you simply can’t give a single answer that’ll adequately quantify conditions in every single PPC sector.  When I’m testing a new area using PPC I usually know whether something will work within 200 to 300 clicks.  I tend to keep the spend on these as close as possible to 10p in new campaigns, but I’m able to do this because I know how to find good value traffic and its there to be found in the sectors I operate in.  So for me, I will generally know if something is worth working on within £20 to £30.  Note I didn’t say I’ll be making a profit because that might not happen straight away.  Sometimes I will make a loss on things but will be able to see that certain areas or products are working well and are worth investing more time and money into.

As with most things in Affiliate Marketing your approach will be key to how quickly you can make money.  If you piss your cash up against the wall on stupidly broad search terms in an idiotic niche or decide you need to compete with the big boys and bid high then the answer is “no amount of PPC spend will make you a return”.

Good luck  

That’s the proverbial how long is a piece of string question, but it’s at the forefront of most new PPC affiliates minds. We’ve entered channels where we’ve spent £10 per day as that was all the traffic we could buy and lost money, yet others at hundreds per day where we made decent profit and vice versa, so anything from one pound to hundreds depending on the sector.

Before commencing PPC it’s wise to reverse engineer what you are looking to promote to work out how much a product yields in commission at average conversion ratio.

For example:

If it’s a £20 soft toy at 10% commission we know we’ll earn £2 per sale.

At an average conversion ratio of say 4% then that’s four sales per hundred clicks, generating £80.00 in sales, with an earnings per click of 8p each click in commission (£80.00 sales x 10% commission = £8.00 commission, divided by 100 clicks = 0.08p per click earnings).

So we must get clicks for less than 8p to make a profit (at a 4% conversion ratio) on these keywords, so bidding more means losing money at least in the short term to get the keywords established, but don’t lose sight of the target cost per click.

I’d say if you are on a limited budget then it’d be best to identify cheaper sectors and products to focus on where clicks are generally lower cost.  Select a merchant that has a good track record of paying on time (nothing worse than waiting months to be paid £x thousand where only a few hundred is profit) and the products are cheap and diverse.

Cheap means higher volume and diverse means more variations and thus more work to cover it properly. The more work you have to put into building a successful campaign, the fewer people will actually sit down and do it all … many people will bid on “soft toys” and lump 20 toy variations into one generic adgroup.

However, not that many will really dig in and create a “buzz lightyear” adgroup, bid on “buzz lightyear plush doll” with phrase/exact match and specifically targeted adcopy linking directly to the buzz light year plush doll page, compared to how many will do on the generic “soft toys” terms.

Editor’s Note:

For anyone involved in an active Adwords PPC campaign, Shane is currently offering a Free Adwords Healthcheck service looking at everything from account structure to keyword selection, use of broad, phrase, exact match and negative terms, adcopy relevancy, ad positioning, landing page selection and a whole host of other features.  For further information, Shane has set up a dedicated website at www.freeadwordshealthcheck.co.uk.