Open Source Affiliate

Article: Making money with Adwords and PPC: a beginner’s nightmare

Making money with Adwords and PPC: a beginner’s nightmare

Many new affiliate marketers are directed to pay-per-click (PPC) advertising such as Google Adwords. This is a huge mistake. Adwords PPC is a graveyard littered with the souls of many wide-eyed novice marketers. Here I will give you an idea of how people actually make money from Adwords, and why beginners should avoid PPC.

Why use Adwords?

The basic idea of a PPC campaigns is that you advertise a product, pay for each person who clicks to visit your site, and then hope a certain percentage of visitors purchase a product you sell. If your sales outweigh your advertising costs, you have made a profit. The attractive feature of PPC is instant scalability. If you spend $100 on Adwords to earn $200 in sales for a return-on-investment (ROI) of 100%, you can probably expect to spend $1000 and earn $2000. You can immediately drive as much traffic as you want, without having to resort to writing articles, linking campaigns, or other slow, tedious methods. Thus, if you find a magic formula that works, you can earn as much money as you put in. It’s very mathematical. Just calculate your cost per click (CPC) visitor conversion rates, and earnings per sale.

Challenge of PPC for affiliate marketers

Turning a profit with Adwords for affiliate marketers poses several challenges related to those three mathematical values we need. One obvious challenge is market saturation. You compete on Adwords with other affiliate marketers, driving up the CPC for your keywords. This increases total costs. Another problem is that PPC can have very low conversion rates. If you owned a website and had a recurring user base that trusted you, you might be able to make sales more easily. However, PPC is a one-time sales pitch, and these tend to be ineffective. The visitor even purchase the product later - but you might not get the referral credit as the affiliate for the sale. Finally, even if you do make a sale. as an affiliate, you get a smaller portion of the sale than the product creator. Thus, it is harder for you to profit than him. If you directly compete with the product owner on Adwords, guess who is going to win - not you.

How pros make money with Adwords

Although there are challenges to using Adwords, many experienced affiliate marketers do make quite a bit of money through PPC. However, they take two approaches that are not immediately accessible to beginners.

The first approach is just straightforward optimization of PPC campaigns. This is more difficult than it sounds, and also costs money. As I said, a profitable PPC campaign is purely a mathematical numbers game. By running campaigns and recording data, you can test and tweak your keyowrds, ads, landing pages, or even product choice to find the best combination of CPC, conversion rates, and earnings. Beginners often make a mistake here by not doing enough research. If you have 1000 ad impressions, 10 clicks, and 1 sale after 3 days, you do NOT have enough data for your research. You need at least 10 sales to be sure that the results are not a statistical fluke, and preferably at least 100 to be confident with your numbers. This would require 30 days with your tiny PPC budget. Experienced affiliate marketers with large starting capital can afford to run many PPC tests quickly, confidently identify the profitable ones, and earn back many-fold profits. Furthermore, experienced marketers are more likely to find successful campaigns. Beginners will have trouble throwing money on many failed campaigns during their research phase.

The second approach to making money with Adwords is to not sell a product. This sounds strange, but many companies and marketers are not actually trying to make sales. They are trying to collect email addresses or “leads”. Once they have this information, they can advertise to the potential customer over and over again for no cost. They can sell multiple products. The potential profit is not limited by the commission for a single affiliate sale. This is why people are bidding $5 dollars for a keyword marketing a $40 commission. No, they are not converting 13% of their visitors. What they are doing is capturing leads and running an email campaign that more than covers the $5 price. High or recurring commission programs work well with this type of strategy. For beginners, though, running an email campaign can be difficult. You need to write content material and identify good marketing strategies. Of course, testing new email campaigns with $5 lead captures is expensive and not really recommended. You will also need experience setting up an email autoresponder. You can subscribe for a service, but again, that is paying money before you know how to make it back.

Final advice on Adwords PPC

I will be offering some tips on Adwords PPC in the future, but for now, I would recommend that new affiliate marketers avoid it. Unless you can afford to burn through several hundred dollars or more as part of your Adwords education you are probably better off learning about the basics of affiliate marketing and testing strategies with free methods.