If you look at our WebDiggin Cash Flow report for Feburary, you’ll see the largest source of income for us comes from Commission Junction ($867.26 to date.) However, you’ll also notice that our largest expense goes towards Pay Per Click advertising costs (Google AdWords: -$358.92 , Yahoo Search Marketing: -$822.92). They go hand-in-hand.
The basic idea of PPC search marketing is you pay money every time a websurfer clicks on your ad during a Google or Yahoo search. They get sent to an advertiser with your affiliate code. You get a commission if that surfer actually buys whatever the advertiser is selling. You make money if you can keep your advertising costs (Cost Per Click) lower than your commissions (Earnings Per Click).
Our biggest mistake in 2007 was seeing that our advertising clicks weren’t turning into commissions, but hoping (praying, really) that somewhere down the line, the commissions would start to roll in. (After all, you have a 60-90 day window after the initial click for them to make a purchase). But in this age of browser cleaning, the cookies don’t last. Our number one lesson from 2007 was if the campaign doesn’t work right away, change something.
We have managed to create one search marketing campaign where the commissions are higher than the advertising costs. Back in January, we asked the question, Are We Making Money Yet? If we look at how much we spent compared to how much we made in commissions, based on the click date (table 1), we made $2.65, and based on the event date (table 2), we lost $30.11. But we knew that because we moved over $2000 of merchandise, we would move up to the next tier for commissions at 6% (vs 5%), so we were expecting a little bonus.
The Performance Incentive for December came in on Feb 16 and was for $32.32. So, December showed a profit of $34.98 for this Search Engine Affiliate Marketing campaign. The campaign runs with a positive Return Per Click. Here is the cost and commissions for our affiliate marketing campaign with a large online retailer.
Table 1. Monthly Returns of Affiliate Marketing Campaign with Online Retailer
(as of Mar 16, 2008) |
Cost |
Earning |
Return |
| Dec 2007* | -$190.41 | $225.39** |
$34.98 |
| Jan 2008* | -$128.60 |
$171.84** |
$43.24 |
| Feb | -$97.52 | $93.38 |
-$4.14 |
| Mar (Mar1-16) | -$48.77 | $48.34 |
-$0.43 |
*sold over $2000 of merchandise so the commission moved to 6% from 5%.
** includes the performance incentive from being in the second commission tier.
So, the campaign worked in December and January because we were able to clear $2000 of merchandise to make the next tier. In Feb, we made less than $100, so we won’t get a bonus. We may not be able to get into the next commission tier in March, either. Especially, if recent changes in Yahoo’s keyword bidding policy negatively impacts us.
Next Steps:
- See if we can get more traffic out of Yahoo. Perhaps raise the minimum keyword bid on our Yahoo campaign. Sure it’ll narrow the profit margins on the Return per Click, but, we only come out on top if we move $2000 of merchandise.
- Experiment with another product and build another affiliate marketing campaign.
- Work on finding other sources of revenue. Pay Per Post and Google AdSense both rely on increased traffic to our site, WebDiggin, so I guess the interim step is to build traffic.
Question: Has anyone had any success promoting an affiliate link through the Search Engines?
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March 20th, 2008 at 7:20 pm
This is the first time I have even thought about such a strategy. I have thought about using Adsense to push ages advertising affiliates but I guess this probably won’t work out to well if you have trouble with sending them straight to the link.
Forest Parks’s last blog post..Still in Vermont, thinking about my future…
March 22nd, 2008 at 3:26 am
I’m really of two minds. I’ve had limited success creating PPC adwords campaign sending traffic directly to the affiliate. Ryan Cote was advocating creating excellent pre-selling landing pages that then pushed them forwards to the affiliate lnks after you had built a relationship. When I asked him about his experiences, he said that a well designed landing page increases your conversion rate, so, it’s something we’re trying.
We’re experimenting with both methods on the back end here, but we’re also trying to create a $5 mini site following Josh Spaulding’s ebook. (Well do a post about his method, but basically he targets expensive keywords because not all adsense clicks are created equally.)
How are you monetizing your blog?
March 26th, 2008 at 6:54 am
I am not yet prepared to go into pay per click to boost traffic to one of my sites. For now I am comfortable with Google’s kindness in which 80-90 percent of the site traffic is provided by search results. It’s a hit-and-miss adventure to go into pay per click. We can’t predict if a site surfer would really buy the merchandise we are promoting. There are many factors that will come into play why people buy and why they don’t.
Cheap Web Hosts’s last blog post..What is Google Adsense? Make Money with Google
March 26th, 2008 at 9:10 pm
I agree. I’m finding PPC advertising a bugger. What appeals to me is the logic. If you write a good targeted ad, you weed out people who are surfing for general information. So for example, if I know that the minimum order of a site to get free shipping is $50, then I’ll include that in the ad. That way, they’ve got $50 in their mind when they go to the advertiser’s site.
I’ve only really experimented buying traffic and sending it directly to the advertiser’s landing page. I’m pretty sure I wouldn’t buy traffic for this site. What would be the point? There are affiliate links, but people who wanted to sign up for a webhost probably wouldn’t do it directly because of this blog.
So if your primary method of generating traffic is google’s kindness - do you research specific niche keywords to include in your posts, or you just blog as it is comes?
March 27th, 2008 at 9:09 am
Hi WebDiggin,
I have several other blogs. To answer your question, I blog for several reasons: 1. To polish my writing skill 2. To clarify what I’ve learned in life 3. To unload the burden of not writing (it’s like pregnancy), and 4. To attack or appreciate a belief, institution, or program without fear of retribution. For instance, I just learned that the Wikipedia founder, according to a New York Times report, was spending lavishly on a dinner in a U.S. restaurant courtesy of the hard-earned money of the site’s donors. I feel uncomfortable about it, so I criticize such action in one of my blogs.
If money starts to fly to my PayPal account due to blogging, that’s only an icing of the cake. If I won’t earn money from blogging, I won’t be bothered. What I care is that I learn and I share with others what I think is worth-sharing.
After all, the biggest bank account resides in our brain: they call it “knowledge.”
March 27th, 2008 at 11:54 am
I’m pretty skill-focused myself. I’d say that if you’re in for the quick buck… well, good luck to you. But, if you’re in for the long-haul, then chances are you’ll pick up some valuable skills along the way. (I think I saw in another comment of yours that you’re heading into consulting? Bravo.)
I’m sure that old adage, do what you love and the money will follow, probably applies to people like us.
Still, I wouldn’t say no to more cashflow from the blogs.