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Search
Engine Pay Per Click
Increase Your Site Traffic With The
Pay-Per-Click
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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."
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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.
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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!
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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:
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FindWhat |
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7Search |
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Kanoodle |
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Bay9 |
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GoClick |
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ePilot |
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SearchGalore |
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!
=============================================
ABOUT THE AUTHOR: The late
Corey Rudl was the founder of The
Internet Marketing Center, now run by
his business partner, Derek Gehl.
Derek Gehl specializes in teaching real people how to start profitable
Internet businesses that make $100,000 to $2.5 Million (or more) per year. To
get instant access to all his most profitable marketing campaigns,
strategies, tools, and resources that he's used to grow $25 into over $40
Million in online sales, visit: The Internet Marketing Center
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