Getting paid traffic to your website is one of the five traffic strategies that we discussed in episode 014.   In this episode of the Late Night Internet Marketing Minute, we dive in a bit, and discuss the common way you pay for traffic, and some of the math you need to do to make sure you are making a profit.

Transcript:

In the last episode we talked about five different kinds of traffic sources that you might choose to take advantage of for your affiliate website.

The first type of traffic that we talked about was paid traffic. There are a lot of places that you can pay money to get visitors to your website. Of course, the most famous of those is probably Google Adwords.

Adwords is the other half of another program that you might have heard of from Google called Adsense. Adsense is the program that website owners sign up for to get paid to show ads. Adwords is the side of the Google program where you would pay to actually show your ads on those publisher websites.

The way it works is you login to your Google dashboard, you give them your credit card number so they can charge you for these ads, you specify the ad you want to show and when you want to show it, and if those two conditions apply you also specify how much you’re willing to pay for a click under those conditions.

Let me give you an example.

Let’s say you want to show ads whenever someone types in “dog training tools” because you sell clickers and other cool dog training items like gentle leader leashes and stuff like that on your website. Whenever someone types in dog training tools you want your ad to appear, so you specify that specific keyword inside of Google and you write your ad. It might say something like, “For awesome deals on dog training tools visit DogTrainingTools.com.” Then you say that you are willing to spend a certain dollar amount per click on that ad – say for example $0.50 or $0.60.

If someone comes to Google and types that in, what happens is that your ad will either appear at the very top of the listing and it will show as a sponsored ad or on the right hand side of the listing and it will show as a sponsored ad. If someone sees your ad when that happens and they end up clicking on it, Google will charge you whatever your maximum bid amount was, depending on what other people are bidding. It’s kind of like eBay in that way, you sort of end up paying whatever it is that you have to pay to win the “ad auction” in that case.

The challenge with that is if your competition was only paying $0.45 and you were paying $0.50 you’ll rank above your competition until they realize that they can pay $0.55 in order to rank above you and have their ad shown higher than yours. And of course the higher on the page the ad is the more clicks it will get in general. When you see your competition paying another nickel, you’ll pay another nickel, or maybe a dime, and now all of a sudden you’re paying $0.75 a click. That arms race will go on until everybody has maximized the price that they are willing to pay for ads.

Of course all of this goes back to what your profit is. If you’re paying $0.75 to get a click, that click better be worth at least $0.80 to you or you’re losing money. If you make a nickel on every click, that’s fine, you can go get 10,000 clicks and make a lot of money. But if you’re losing a nickel on every click, that’s a different problem. As I have proven many times, it’s really easy to lose a nickel on every click or maybe even a quarter on every click.

You have to be really diligent when you’re working with something like Google Adsense to optimize your conversion rates, which is something we’ll talk about later in this program, and make sure that your process of acquiring the lead with the right search terms that have commercial intent, getting the ad placed in the right place so you can get that click to the right page on your website that will result in a conversion and a sale so that you can actually make a profit after paying for that click.

Those are the key kind of conversion points that you have to optimize when you’re doing paid advertising. It can be pretty tricky. It certainly can be done, people do it every day, Google makes billions of dollars selling ads on the internet. This stuff works, people wouldn’t be paying for ads on the internet if they couldn’t make money doing it, but it can be a little tricky.

You can go through a very similar process on Facebook where you can place Facebook ads, and Twitter is now accepting ads, and so on.

In addition to those sort of search and social media ads, you can also still pay to place banner ads on websites and you can also pay to place ads in people’s email newsletters. There are a lot of marketers out there with huge email lists and they’re more than happy to charge you an amount for you to put your ad copy into their email list as a sponsored ad.

You can even pay to place ads in podcasts just like this one. I know you’ve heard them if you listen to podcasts, you’ve heard ads for Audible, SquareSpace, and other products all over the podcasting space. That’s the same kind of idea, those people are essentially paying for their link to be exposed to listeners, viewers, or readers.

There are two kinds of payment models. One is cost per click, which we’ve already talked about with the Google model where you pay only if someone clicks. Then there’s also another model we call CPM, which is cost per thousand, M being kind of the Latin letter in roman numerals meaning 1,000. In the case of cost per thousand impressions you’re paying for people seeing your ad, for your ad being displayed 1,000 times whether people click on it or not.

Again, all of this is a math problem. If a sale gets you $5.00 of profit and you pay $4.50 in total ad costs in order to get that sale, that may be a winner for you. If you have to pay $6.00 to make $5.00 on a sale, that’s probably not a good deal. All of these paid traffic models boil down to this sort of mathematics and the key is to test, test, test, and optimize those ads, the placement of the ads, and the copy on the page as much as possible so that you can get absolutely the most for your money when you buy those ads.

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