Here's my question:
I am an associate of a site that sells a health product. I get 20% comission on any sales driven from my site. 5% of my users are clicking on the text banner link - around 2% are buying. I only get about 300-500 visitors a day, however my site is very targeted and visitors are VERY pleased with what my site offers in information.
Now heres the question.. The associate is paying 85c per click on google to get a visitor to the same page I'm sending them too. Most of my visitors are coming in with the specific desire to be treated.. How can this be? If my visitors are just as targeted as somone typing directly into google, then how can he be making money when he says that 1% is good? That would mean if 1% of people were following through on purchasing after clicking his google link that hed pay google close to 80 bucks for every one of his $25 dollar sales?
What am I missing here? Thanks!
a couple of things come to mind:
1, He has NO ROI tracking in place.
2, He is trying to buy brand perception aswell as qualified traffic.
3, But my bet is, He can afford to as he is probably on a massive mark up, health products quite easily have 300% + mark ups.
Shak
How do you know they are paying 85 cents?
Which keywords are they bidding on?
In your numbers is it 5% of the 500 visitors and then 2% of the 5% (i.e. 0.5 sign-ups)?
Chances are there is a lifetime value inherent in the sales process. As an associate you get 20% of the first sales, chances are the owner gets the other 80% and 100% of future deals.
There is also an important thing in what you said :
visitors are VERY pleased with what my site offers in information
The difference is the other site is selling something, your site seems to provide information first and sales second.
But, there is every possibility that no tracking is going on and sales at that level are not sustainable.
He is absolutely right..
There has been a fundamental change in Google marketing. Now people have a distinct choice between finding info and buying, the motivated buyers are clicking on the Adword or Sponsored link, and the students, learners, researchers, and "browsers" are clicking on the info (main index) links.
BEcuase the former are more motivated and "ready to buy" they result in a much higher "click to sale" percentage. We are finding this a lot where we have top 3 rankings in Google proper, and also adwords.
Add to that the "buyers" are probably getting directed straight to a 100% buying page, and not getting distracted by "information".
I do see that the value of an affiliate (in general) will continue decreasing now that those who run affiliate programs are increasingly finding that PPC can give them better ROI than their affiliate program side.
In the last 12 months, Google (and the web as a whole) is moving to a model where there is a distinct difference between buying on the web and looking for info on the web. PPC now offers a credible alternative to SEO'ing pages in the main indexes for this reason and many others.
