Making Money through Pay - Per - Click Advertising (PPC)

Over the last five years, Pay-Per-Click (PPC) advertising has become a very popular way to effectively market products online. PPC is also one of the most cost-effective strategies for internet advertising at all levels. According to Forbes magazine, PPC and other similar forms of search engine advertising currently generate around 5 billion dollars of business revenue a year and is expected to increase to around 8 billion dollars by the year 2008.

Before search engines began to allow “sponsored listings”, the only real way to market online was to optimize your website’s content, and drive traffic to your website in whatever method you could, so that eventually, your site would be “ranked” well. If you wanted your ad to be displayed on the first page of a targeted keyword search, you’d better have a well-rounded and reasonably sophisticated strategy to improve your ranking. Furthermore, once you got ranked, you had to keep optimizing your site in order to stay there.

PPC has opened up a tremendous opportunity for smaller businesses to market their products online, and successfully compete with the “heavy hitters” in their industry without having to spend an enormous amount of capital! Let's take a quick look at how PPC Search Engines work. These engines allow advertisers to place a small ad on their engine, which will be displayed as a “sponsored listing”. The ads will include a link to your websites url. Advertisers will place a bid for what they will be willing to pay each time a targeted prospect clicks on their ad. For example:

Let's say a company who markets pet grooming supplies wants to drive traffic to their new website. They set up an account with a search engine that offers PPC, such as “Google Adwords”, or “Yahoo Search Marketing”. Once they write their ad, they will enter a list of targeted keywords that they expect their prospects to type when searching for their products. They will place their bid for each click, according to their own budget, and desired position. Lastly, they will place a daily budget, which will tell the search engine to stop displaying their ad once their account has reached a certain amount.

The highest bidder for a certain keyword or phrase will then have the site ranked as number 1 in the PPC Search Engines followed by the second and third highest bidder, up to the last number that have placed a bid on the same keyword or phrase. Your ads then will appear prominently on the results pages based on the dollar amount bid you will agree to “pay per click.” How do you make money by using PPC into your affiliate marketing business? Most affiliate programs only pay when a sale is made or a lead delivered after a visitor has clicked through your site and made a purchase on your affiliate’s site. Your earnings will not always be the same as they will be dependent on the web site’s content, traffic volume and conversion rate (generally speaking, anything over 2% is usually considered a good conversion rate). Be sure you are carefully monitoring your campaign’s performance so that you can make adjustments when necessary. If you have successfully driven 100 customers to your affiliate’s site, and have not made any commission yet, you may want to consider promoting someone else’s product!

Also be careful not to “over bid” for clicks just to get a higher ranking. I made that costly mistake when I first began. I had a good affiliate product that had established a proven track record already. They had a conversion rate of around 5% with very few refunds being paid back. I thought that in order to make the best of my campaign meant that I had to always be within the top 2 ads. I set my bid at over 2 dollars per click, with a $10 daily budget. This only brought me 5 clicks per day. A 5% conversion meant that I would get paid once for every 20 visitors that clicked through which would cost roughly $40. (4 days X $10 daily budget). My commission per sale was only 35.98, which meant that my net profit was around $4.00! It didn’t take long for me to get the picture.

What I did was lower my click bids to around 30-50 cents. This would give me much more “bang for the buck”, even though my ad would not be placed # 1 every time. It may take a little longer, but with this strategy, I was able to generate 30-50 clicks per day for the same $10 budget. That meant an average of 1-2 sales per day, which brought me $60-70 in profit. That may not sound like much, but keep in mind that I was just beginning, and had a limited budget. After you grow your business, you may be able to set your daily budget to $50, or even $500 per day, which would amount to 1500 clicks, which could literally bring you thousands of dollars in profit per day!

Aaron R. Wallace is a budding entreprenuer and expert author who has written numerous articles and eBooks pertaining to online marketing, goal setting, real estate, and many other general business topics. He founded A.R. Wallace & Associates, LLC in 2005, which quickly became a highly competitive real estate business engaged in buying and selling homes in Houston Texas. He is also a well-educated stock trader and online marketeer. For a free copy of his latest eBook entitled "The Bigginer's Guide to Home Based Business", go to: http://www.HTownBiz.com

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