Affiliate Marketing: Top 7 Strategies for Selling Affiliate Products through PPC Advertising
By Ron Coleman
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Several companies offering affiliate programs have suggested to webmasters that they may be able to increase sales by using pay-per-click advertising to promote their links. Although this technique can result in more sales, it can also result in loss of money if it isn't done right. Here are seven factors which must be taken into consideration.
- Rule Of Thumb - A good rule of thumb for advertising is to expect one percent of the universe. In other words, if 1000
prospects see your ad, an average response rate would be about one percent or 10 respondents. You may exceed this rate slightly, or you may find you fall short. But for planning purposes, this is a good number to use.
- Look At The Math - Now, suppose you place an ad with a PPC search engine and link that ad to your website. At your website you have another ad which links to your affiliate, let's call him ABC Products. In order for you to make a sale the person who sees your ad on the search engine must clickthrough to your website. In addition, he must clickthrough on the ad he sees on your site linking to ABC Products. Finally, he has to actually BUY something from ABC Products.
Using the one percent rule, if one million people see your ad on the PPC search engine, about 10,000 will clickthrough to your website. At a penny per clickthrough, you'd spend $100 for this result. Then, of those 10,000 about 100 would click through to ABC Products. And, if the one percent principle still applies, one person would actually BUY a product. So you see the difficulty here...out of one million impressions, only one person bought a product. Nobody can make any money with this type of results.
- Eliminate Middle Steps - If you can eliminate just one of these steps on the way to the point of purchase, you've increased your chances of a sale by 100 times. For example, suppose the PPC ad you placed were not linked to your website, but were instead linked to ABC Products, including your tracking code.
Now, 10,000 people would clickthrough to ABC Products, and if one percent bought something, you'd have 100 sales. This is much more favorable results. I use a similar technique on my website. I'm a cartoonist and my website features Flash animated cartoons. These cartoons automatically transport the visitor to my affiliate site when they end, which dramatically increases my clickthrough rate. Of course the cartoons and the advertising have to have some relationship to the product I am selling or my conversions would be way down. Advertising I sell on my website takes this into account.
- Know What You're Likely To Earn - Through experience you can determine what the average conversion rates are for various types of affiliate products you advertise. One advertising broker, Commission Junction, actually posts average statistics for each of their advertisers. These statistics track how much the average website earns in commissions for every 100 clickthroughs to the advertiser website. This type of information is invaluable in planning your ad campaign. If, for example, you found a particular product statistically returned about $5.00 in commissions per 100 clickthroughs, you'd know you could not afford to spend more than 5 cents for each clickthrough to their website. In fact, that would be too much, since it doesn't leave you any room for profit. This tells you if you must pay 5 cents per clickthrough, you have to seek out products which statistically pay more than $5.00 per 100 impressions. Ten or twenty dollars per 100 would more suitable.
- Pay-per-click search engines try to promote the idea that the more you pay for each clickthrough, the higher you will rank on their search pages, and thus your traffic will increase. While this is very true, you must keep in mind the figure you need to meet in order to make a profit. It doesn't make sense to pay 10 cents per clickthrough if you are only making $5.00 per 100 clickthroughs. The bottom line is this: you are not as concerned with how much traffic you receive as you are with the COST of that traffic. If the traffic is insufficient, but the cost is right, you can always advertise with multiple search engines.
- Try Different Products - Although the statistics the advertisers provide may be a good guideline as to which affiliate programs to choose, you must keep in mind your website may have differing results from the average. You should try different programs and stick with those which work best for you.
- Use Different Advertising Sources - An ad with one search engine may bring better results than an ad with another. You should experiment until you find out which advertising sources bring you the best results. In addition to the PPC search engines, you may want to consider other advertising sources as well...for example, purchase some advertising which is sold on a "per impression" basis. Or, run free classifieds, or purchase advertising from non-internet sources such as newspapers. The important thing is to experiment, track your results, and then stick with what works best.
(Ron has worked for several years in advertising in the motion picture and television business. He is currently retired and pursuing a business as a freelance cartoonist. His work can be seen at his website: http://www.coleman-cartoons.com
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Article Submitted On: November 19, 2004