For example: let's say you get 80.00 per sale. Figuring 200 clicks for one sale, you cannot afford to bid more than 40 cents per click, since 40 cents a click times 200 clicks = 80.00. When starting out, I'd set the bidding at, say, 35 cents a click to try to make some kind of profit.
Another philosophy is to bid really high at first to make sure that your ad gets seen and you get the appropriate CTR, even if you don't make a profit. In this case, I would set the budget at your bid times 200 clicks MAX, because if you don't have a sale by 200 clicks, it's seriously time to rethink your campaign, your copy, and whether or not what you're selling is going to work for you at all.
Some affiliate programs tell you approximately what the average conversion is. For example, Amazon has (or used to have) a thing that told you in general how many clicks equaled a sale. (For several Amazon products, it's often around 100 clicks per sale.) If you know the average conversion, then you can bid accordingly.
At the very beginning, though, you're not really going to know anything. I recommend looking at it like a slot machine: take an amount of money that you can afford to throw away, and work with that. Once that's gone, you're done, and you need to either change your campaign, your product, and/or your copy, or you need to start something else. Don't just throw more money in, thinking, "Oh, I got 200 clicks, I'm sure I just need a few more to make that sale." That's what happens to compulsive gamblers looking for the jackpot. :-)
Anyway, this has worked for me when I used to do affiliate marketing. I hope this helps.
JK
In the get links screen, you'll see 3 Month EPC and 7 Day EPC. This is approximately, on the average, how much has been earned per 100 clicks for that program. The "Network earnings" column shows you which tend to be the best performers.
So, if you have a program where the 3-month EPC is 90.00, and the program gives you 90.00 per sale, you know that, on the average over the last 3 months, this program has sold one item for every 100 clicks. Assume that you will not do as well, and that it will take you 200 clicks to make a sale. In that case, to break even, you cannot bid more than 45 cents per click. To make a profit, you must bid a little less.
(This is really, really simplifying and there are a lot of different strategies, tips, and tricks, and so forth, but this isn't really the place for that. You can search Google for Adwords strategies and find a ton of information.)
These are the sorts of analyses you must do for *each* program. Again: decide how much money you're willing to lose, and throw it at what you think will be the best performing programs.
If I have not made a sale in 200 clicks, I drop that program and do not bother with it anymore, mostly. :-)
JK
So, if you have a program where the 3-month EPC is 90.00, and the program gives you 90.00 per sale, you know that, on the average over the last 3 months, this program has sold one item for every 100 clicks. Assume that you will not do as well, and that it will take you 200 clicks to make a sale. In that case, to break even, you cannot bid more than 45 cents per click. To make a profit, you must bid a little less.
This isn't quite correct. The EPC number in CJ represents, on average, what other people have earned per 100 clicks on the CJ affiliate text link or banner.
It does not follow that just because you have had 100 clicks on your adwords ad, those will translate into the clicks on your affiliate link that the EPC figure represents. Why?
For most of the well-paying affiate keywords, you will need to create landing pages, since Adwords will not allow more than one ad per URL per keyword.
So in the example above, you would need to also know the approximate click through rate of your landing page.
Say for simplicity's sake your click thru rate is 50%. Then, you would not want to spend more than 22 cents per click in order to break even.
My strategy is based on being able to use a direct link rather than a landing page. I generally dig for keywords where the ads I see have other URL's, or where there are no other ads so that it can go directly to the affiliate link. (Yup, there are still some of those out there.)
If you're in a too-high-competition area, it gets harder to do that.
Some people have had good luck with landing pages, and while I've had that work for me, it never worked as well as the direct link.
But that's certainly another wrench in the works. I keep forgetting about it, actually. Subconsciously I'm still living in the days where you could just put "aff" on the thing and have 400 example.com urls in the same keyword field. :-)
JK
