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I was checking out overture and noticed a .39 per click cost. Now, if I am correct, if I charge say 39.99 for my service, then if only 1% of the clicks were to convert I would make my money back. Correct?
Not sure If I read overture correctly, also anyone know of any other PPC sites that work as good or better? I know of google adwords which I'm also investigating.
Thanks!
Depends on where you are targeting your customer base. If only in the US, then you've got the (2) major players covered, though you might investigate some of the 2nd tier PPC players:
FindWhat, Kanoodle, Ah-ha, ePilot, SearchFeed, 7Search.
If in Europe/UK, then eSpotting and Mirago might be worth checking out...
Well, at a one percent conversion rate you would pay $39.00 to get a $39.90 sale. Let's assume your product/service cost $20 to provide - you would actually be losing $20 on every sale (your $39.90 sale price minus your $39 ad cost minus $20 product cost.
So no, you would not be making your money back...
Make sure you have some type of ROI tracking in place, and that your "Target URL's" are formatted so that you know which PPC engine, your traffic originated from...
Many advertisers only use the big (2), other's have found decent ROI with some of the 2nd tier engines... You'll hear both success stories and horror stories, so tread lightly, until you know what works.
Also, I have $500 for investing in PPC, any suggestions on how much I should devote per keyword? Or does it not work that way?
We track ROI/ROAS for many advertisers. Some do better in GAW, others better in Overture. Every vertical market, target keyword phrases, etc., present different conditions.
Don't take one members experience as the "Golden Goose"..
Calculate your monthly ad budget, and begin by dividing between Google and Overture. Ogletree is correct in the balance in available inventory between Google and Overture. We do see more clicks available at Google across vertical markets.
So your product/service costs nothing to provide?
read - eBook :)
Every vertical market is different. They didn't coin the phrase "Loss Leader" for no reason.. :)
One vertical I can give as an example is the contact lens vertical. We have a major client in this vertical that will break even on:
(Cost of Product) + (Cost of Shipping) + (Cost of Advertising), knowing that their average life cycle of a customer is 2.8 orders..
To say that if you can't make a profit on the first order, you should adjust your marketing strategy is absurd!
Convenience stores many times will price gasoline to about break even, knowing if they capture a larger share of business, they will realize a better "overall" profit margin because sales of other products increases. (Products that have higher profit margins).. (though this is a brick and mortar example, it works in some web models also)...
Then there is the benefit from referals.. Word of mouth is sometimes our best marketing exposure.
There are many different components that go into strategizing advertising costs..
I would be willing to take a 90cent loss for 100 views of my page as well as one sale
My point has nothing to do with whether or not selling an item at a loss is a sound strategy. My point is that if the item or service in this particular case has any cost, then lty83 is not taking the first sale at a 90 cent loss - he/she is taking it a 90 cent loss PLUS the cost of the product or service (plus any transactional charges that may apply).
There could be a huge difference between that and the 90 cent figure that lty83 is calculating. My question was, and remains, "Does the service in question have a cost?" Without knowing that, it is impossible to know whether lty83 is looking at a 90 cent per sale loss (only possible if the service in question has zero cost) or if the actual loss per sale is greater - perhaps far greater - than 90 cents.
>To say that if you can't make a profit on the first order, you should adjust your marketing strategy is absurd!
I never said this, and I am not sure what comment you are referring to here.
>There are many different components that go into strategizing advertising costs..
Yes, and the cost of goods is one of them :)
I would be willing to take a 90cent loss for 100 views of my page as well as one sale and the possiblity of those users returning on their own.
The value of a lifetime customer is often undervalued in calculating PPC ROI. Assuming you sell more than one item, or have some affiliate links, selling a high traffic item as a break even point can be a good business model for selling the rest of a site.
No one is arguing the contrary.:) The question is whether lty83 is really breaking even (actually losing 90 cents) under the scenario presented. My point is that unless the cost of goods is zero, lty83 is miscalculating the loss per original PPC-generated sale.
I have no idea if selling at a small loss is sound strategy in this case - lty83 asked if his/her math was correct. I don't believe it is, unless the cost of goods and the transactional costs are zero.
If Ity83 is paying for any part of the product, then you're right, it's more than a 0.90$ loss per sale - which could quickly add up to a large negative ROI.
So adwords are the best way to start, i'll take your advice, thank you much.
Hmm, every one to their own, eh?
My honest opinion is to use Overture. You put the cash into the account first rather than getting billed like Google does to you.
I am a Google optimiser so I use PPC on Overture to spread across the other major engines and optimise for Google, it makes sense really.
Terry
