Google AdWords - How Much Are You Spending To Make 1 Sale Right Now?

So last week i decided to have another go with Adwords traffic after 2 already failed attempts at getting it to work for me LOL

I have to say, so far, this campaign i setup has definately been the best of the 3 attempts, right now, it has cost me $9 to make 1 $35 sale and i was just wondering if that was par for the course of if you thought that was to much to be paying to make $26 profit?

The keywords that i am running seem to be on track in terms of impressions and my single ad has a 5.95% CTR so im wondering how this compares to other peoples experiences with Adwords traffic?

Any thoughts or feedback on this?

Regards,

Lee

in my experience over the last 3 years, $9 per $35 sale is excellent. we used to do that fairly regularly back in the day, but there is a LOT more competition out there. i'd say we're spending $12 per $35 - sometimes a little more.

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Originally Posted by basschick

in my experience over the last 3 years, $9 per $35 sale is excellent. we used to do that fairly regularly back in the day, but there is a LOT more competition out there. i'd say we're spending $12 per $35 - sometimes a little more.

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Really? :eek:

That just seems awfully high to me in terms of actual traffic ($0.10 to $0.15 per click).

Regards,

Lee

How are you able to determine that a sale definitely came from your adwords campaign? (Forgive me if this is a lame question)

--Chubbs

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Originally Posted by chubbs

How are you able to determine that a sale definitely came from your adwords campaign? (Forgive me if this is a lame question)

--Chubbs

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Through the affiliate link :)

Regards,

Lee

I spend .30 on some words. Average is more around .18

I spend about 50k a month to bring in 175k or so.

I feel that anything that is making a profit is worth it if you don't have to do a lot of work for it.

I avoid the content network like the plague.

Lee... its a far larger profit depending on your retention! Say you pay 10 dollars to make a 25 dollar sale. But your average rentention is 3 months? Then you have just made a profit of $110.00 dollars.

Also, just because the surfer doesn't click through the ad, or buy at this point, doesn't mean there won't be a sale based on the ad. Google also provides decent coverage in the form of branding.

And yes, avoid the content network... lots of wasted clicks.

so you don't mind spending $35 or $45 or 100% commission on a sale from an affiliate to get a customer but $12 for a customer that is 100% yours is too high a price to pay?

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Originally Posted by tombarr

so you don't mind spending $35 or $45 or 100% commission on a sale from an affiliate to get a customer but $12 for a customer that is 100% yours is too high a price to pay?

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Huh?

That desnt make any sense, can you repost what you mean.

(Sorry im having a blonde moment it seems)

Regards,

Lee

Yes, of course I can repost...sorry it was not concise before.

Your earlier post concerning $12 for a $35 sale indicated you felt that the cost for that customer acquisition was a bit high priced.....

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Originally Posted by lee

Really?

That just seems awfully high to me in terms of actual traffic ($0.10 to $0.15 per click).

Regards,

Lee

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Yet your program offers "up to $44 per sale" and you have offered other pricey incentives to affiliates on a per sale basis. You obviously calculated that $44 for an affiliate sale is a good price to pay for a customer, but it appears you feel $12 for a customer you acquire through PPC that you don't owe any commission on is a price too high to pay. I don't get the logic.

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Originally Posted by chubbs

How are you able to determine that a sale definitely came from your adwords campaign? (Forgive me if this is a lame question)

--Chubbs

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Google also provides you with a snippet of javascript code you can embed in your transaction success page on your website. With that code intact, they report through the PPC interface the converion ratio and the cost per sale for you.

Affiliate code tracking is good, and this is good too. Or maybe both and compare numbers.

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Originally Posted by tombarr

Yet your program offers "up to $44 per sale" and you have offered other pricey incentives to affiliates on a per sale basis. You obviously calculated that $44 for an affiliate sale is a good price to pay for a customer, but it appears you feel $12 for a customer you acquire through PPC that you don't owe any commission on is a price too high to pay. I don't get the logic.

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Ah gotcha.

Well i dont do PPS for a start, that $44 is for revshare, on a 3 month membership which is 50% of a sale which is more than fair in terms of giving an affiliates 50% of the revenue generated... They did all the work to get the sale in effect so far as 'traffic' goes.

Right now, i saved a whole $3 by using AdWords for this single sale, thats my point. If the member cancels im up $3, if the member rebills ill be up $18 on an a regular affiliate sale, so i can see where Shaun was coming from in her post.

That being said, in terms of value and effort, an affiliate sale is still a better deal right now as i only have to worry about retaining those sales, not generating them at cost also.

May i ask how much you are spending on a per sale basis using AdWords roughly?

Regards,

Lee

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Originally Posted by tombarr

Yes, of course I can repost...sorry it was not concise before.

Your earlier post concerning $12 for a $35 sale indicated you felt that the cost for that customer acquisition was a bit high priced.....



Yet your program offers "up to $44 per sale" and you have offered other pricey incentives to affiliates on a per sale basis. You obviously calculated that $44 for an affiliate sale is a good price to pay for a customer, but it appears you feel $12 for a customer you acquire through PPC that you don't owe any commission on is a price too high to pay. I don't get the logic.

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Sorry, i just re-ready your post and in all fairness you didn't directly address the cost but did say ".. seems awfully high to me in terms of actual traffic.." but it left the impression with me that you were a bit concerned about that price level, and thus my post(s) above.

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Originally Posted by tombarr

Sorry, i just re-ready your post and in all fairness you didn't directly address the cost but did say ".. seems awfully high to me in terms of actual traffic.." but it left the impression with me that you were a bit concerned about that price level, and thus my post(s) above.

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Tom,

To be fair i was concerned with the price of each sale made from the traffic so id say indirectly your assessment would be kind of correct also :)

I mean in all fairness, if an affiliate is making $3 more per sale than id be making on that same sale using AdWords, for more work, it would seem to me that letting affiliates make sales would be a better way to generate income than Google and im certainly not going to bitch about them making $3 more than an AdWords campaign LOL

Regards,

Lee

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Originally Posted by Lee

Ah gotcha.

Well i dont do PPS for a start, that $44 is for revshare, on a 3 month membership which is 50% of a sale which is more than fair in terms of giving an affiliates 50% of the revenue generated... They did all the work to get the sale in effect so far as 'traffic' goes.

Right now, i saved a whole $3 by using AdWords for this single sale, thats my point. If the member cancels im up $3, if the member rebills ill be up $18 on an a regular affiliate sale, so i can see where Shaun was coming from in her post.

That being said, in terms of value and effort, an affiliate sale is still a better deal right now as i only have to worry about retaining those sales, not generating them at cost also.

May i ask how much you are spending on a per sale basis using AdWords roughly?

Regards,

Lee

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I think that view of a cost per sale is a bit understated as far as the customer value on a per sale basis goes. You do not seem to be accounting for the new email address you have acquired that you obviously market to, nor are you accounting for any upsells from that customer during his membership tenure, nor any word of mouth viral advertising effect (hopefully positive) when he tells his friend of your site, etc. So is it really only a profit of $3 per sale or $18 if they recur?

Any customer you acquire with any net profit margin is a net profit margin. Look at some industries like some food businesses, groceries, arbitrage business, that work on razor thin profit margins who are quite eager and would love to have a $3 per customer margin. Heck, push 333,000 sales through adwords at those rates and you've made a cool million! You didn't do any work to generate it other than placing a few ads...writing a bit of text, monitoring / changing the ads to maximize your CTR or CPA costs, but heck you do that much work or more to get the sale from the affiliate... so I don't think you have any more or less labor on your part to get that sale whether its an affiliate sale, or a PPC sale. Your time to manage and maintain your affiliate relationship, generate marketing products for the affiliate, is also part of your cost for a customer acquisition from that affiliate so is it really only 50% of your sale as a cost?

Personally, the PPC sale comes without any demands for free content, or personal attention, or any drama, or record keeping requirements etc.... so I tend to have a more favorable view of PPC sales. ( i do not have a negative view of affiliates as they are an integral and vital part of our marketing program, I just like PPC more)

Tom,

I totally see where you are coming from but, on paper, i cant put down the cost of the sale being worth $120 in the long term i can only put down what it cost me to get the sale, and how much money the sale made me in any given month.

We all know there is a residual effect to be had on any sale but my board of directors would have a shit fit if i started reporting $120 profits in my financial reports on sales that (so far) have only made me $3 or $18 depending on how you look at it in terms of actual value.

Regards,

Lee

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Originally Posted by Lee

Tom,

I totally see where you are coming from but, on paper, i cant put down the cost of the sale being worth $120 in the long term i can only put down what it cost me to get the sale, and how much money the sale made me in any given month.

We all know there is a residual effect to be had on any sale but my board of directors would have a shit fit if i started reporting $120 profits in my financial reports on sales that (so far) have only made me $3 or $18 depending on how you look at it in terms of actual value.

Regards,

Lee

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You have a board of directors?

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Originally Posted by tombarr

You have a board of directors?

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Yep, we even have annual meetings for the corporation shareholders (of which there are 2) LOL

Regards,

Lee

I am actively running only one Adwords campaign right now on a sponsor site that pays $30 PPS. What is now working for me is to offer only the minimum bid of $0.05 per click, and hope that everyone else does the same! The conversion ratio from Adwords was great for the first three months, but dropped down out of the stratosphere after that. For the last three months on Adwords sales, I figure I've been paying $19 for every $30 sale.

My ROI has definitely plummeted over the years but I still find it profitable if you include rebills. However, some of my campaigns have been such huge failures, I would have stopped trying completely if my first campaign hadn't been a success.

In February we were making 9 cents per click off of a 5 cent bid.