PPC search engines might be very profitable for your online business. With PPC’s you can make even more money than using any other internet marketing technique. However, as an affiliate, you have to choose different strategy, than small, medium or large company CEO’s, marketing managers or internet marketing experts.
Affiliates that are doing pay per click search engine marketing have to plan their campaigns more carefully. As an affiliate, you have to determine your own ROI, try not to get in bidding wars with your competitors and pay attention to different search engine policies.
Determining Affiliate ROI
Ok. So you’ve decided to join some kind of affiliate program and promote a product or service. Now you have to find out how much you are willing (and able) to spend on PPC advertising.
Let’s say a product costs $100. Your commissions are 30%. That means you get $30 for every sale you make. Now you can see how much your competitors are bidding for those keywords that describe your product. But not all PPC search engines will allow you to see top bid prices for a selected keyword or key-phrase. However, some will (like Yahoo). You might see that the top bidders are – the company, whose products you are promoting and its competitors. Top bids can vary – from $0.40 to $0.50 a click. Assuming that these companies make 1% CR, they spend $50 to get 100 visitors. With 1% CR they make 1 sale out of 100 clicks and that is $100. So they spend $50 and make $100.
However, as an affiliate your situation is different. Imagine, you sell the same product to the same market, but you make less money per sale – $30 instead of $100 (your commissions are 30%). Calculations are the same. So with 1% CR, you spend $50 and make only $30. You lose $20. So you have to be careful and try not to bid as high as your company or its competitors, because your profits are less than the company’s.
Of course, these calculations are just a theory. If you promote products via your own website, then you’ll definitely have different conversions compared to affiliate site. You’ll be able to control your conversions much better owning your own website.
PPC Search Engine Policies that Affect Affiliate Sites
If you promote affiliate products, you should try to get your won website and domain name. It’s not just because you have full control over your site and can change a web copy and track your sales better. It’s because of the policies of different PPC search engines.
Google, for example, has adopted a policy that allows only two the same domains in their sponsored listings. You know that majority affiliate programs have the same domains, but different URL’s (like www.website.com/?affiliate1, 2, 3…). So Google doesn’t want their listing to get messed up with the same domains. They allow only one affiliate website. That’s why you should always try to promote affiliate products via your own domain name and website.
Another policy recently affected the internet community by major PPC search engines (Google and Yahoo) was connected with pharmacy related sites.
In order to promote prescription drugs, the company has to get a Squaretrade ID. It costs $200 just to apply and $50 a month for maintenance. If a company has a Squaretrade ID, it’s respectable and offers quality services. This way search engines can be confident about the quality of an online pharmacy. But keep in mind that ST ID is required only in the US and Canada. If a company promotes prescription drugs outside US, like Europe, it doesn’t have to have a Squaretrade ID.
But don’t think that only registered companies have to have ID’s in order to promote various drugs in the US. Affiliates are no different. They have to pay the same fees as the company. So as a pharmacy website’s affiliate, you also have additional expenses in this case. However, it’s only if you promote drugs that require prescription. For other products, this policy isn’t valid.
In Conclusion
Affiliates can make a great income selling different products or services online. However, they have much less earning potential than the companies, which affiliates they are. If you want to promote a product as an affiliate using PPC search engines, then you have to think carefully and plan before you do anything. Determine your ROI first, see how much you can spend to make a profit. Don’t try to overbid your company or its competitors at the beginning. Be careful and read each PPC’s policies.
In the end, you have to test and track everything you do, cause that’s the only way to succeed in online marketing arena. If you learn how to run PPC campaigns effectively, you’ll be able to get even higher positions and better conversions than the company, which affiliate you are.