How Much Should You Pay for a Click Internet Articles | April 5 Cheap Manuel Neuer Jersey , 2002
Title: "How Much Should You Pay for a Click?"Copyright ? 2002Author: Andy QuickContact Author: mailto:andy@findmyhostingWebsite: http: http:www.findmyhostingweb-resourcesArticleshowmuch...

Title: "How Much Should You Pay for a Click?"
Copyright ? 2002
Author: Andy Quick
Contact Author: mailto:andy@findmyhosting
Website: http: http:www.findmyhostingweb-
resourcesArticleshowmuch.htm
Publishing Guidelines: You have permission to publish this article
electronically or in print, free of charge, as long as the resource box
at bottom is included. No notification required.

How Much Should You Pay for a Click?
Andy Quick

You have a web site ready for action. Your product catalog, order
tracking, credit card payment system Cheap Leo Weinkauf Jersey , and fulfillment process are all
in place. Now all you need is traffic! Many web entrepreneurs have
learned that the magic nut to crack is attraction: get a steady flow of
customers who explore your site and eventually purchase goods. The
overhead costs of most web businesses are minimal relative to brick and
mortar stores. However, the variable marketing costs can over shadow
sales revenues by orders of magnitudes. Unfortunately, unlike the
saying in the movie Field of Dreams, "If you build it, they will not
come!" Luckily Cheap Kingsley Coman Jersey , the industry has learned this lesson; some the hard
way, and others in spite of the losers. Dot-coms are clearly not the
darlings of the capital markets any longer; however, there is still
money to be made! If you plan to start a web business or already have
one but are not sure how to increase traffic and make money at the same
time, you should consider a science-driven approach. What does that
mean? Read on?

How to Lose $500 in 12 Hours

One weekend, my business partner and I created an affiliate commerce
site. The site comprised a list of links to other online retailers.
People go to our site Cheap Juan Bernat Jersey , pick a link to a jewelry store for example, buy
something, and in turn we receive a commission from the sale. The
process of creating the site, signing up the affiliate agreements, and
turning it on was a cinch. The cost was virtually nothing. We Cheap Joshua Kimmich Jersey , being
new to this whole web business concept, thought we had an incredibly
smart marketing idea: pay to have our site come up in an ad box on a
major search engine (Google) every time someone searched on the word
"gifts". The word gifts is searched for 49,000 times per day! We
figured we would have a good flow of visitors and the money would start
rolling in. For certain, we would at least break even. We sunk $500 in
one day and let it rip. Here's what happened:

Our investment in Google - $ 500
Number of times our ad was displayed (impressions) - 36,964
Number of times people actually clicked on our ad when they saw it
(click-throughs) - 429
Number of times a person visiting our site made a purchase - 10
Our total sales revenue- $ 77
Our total gross profit - $ (428)

The whole process took less than 12 hours. At least we learned a lesson
quickly at a relatively low cost. Let's look at this event from a
slightly different perspective Cheap Jerome Boateng Jersey , putting the costs in terms of number of
visitors:

Our investment in Google - $ 500
Number of times our ad was displayed (impressions) - 36,964
Number of times people actually clicked on our ad when they saw it
(click-throughs) - 429
Ad cost per visitor - $ 1.17
Number of times a person visiting our site made a purchase - 10
Average sale per purchase - $ 7.70
Average revenue per visitor - $ 0.18
Average gross profit per visitor - $ (0.99)

We were basically giving $1 away for each visitor that came to the
site. Not a winning business model. However, taking this information,
we can assess which marketing techniques can work best for the
business. Let's add 2 additional critical data points to our table:

Our investment in Google - $ 500
Number of times our ad was displayed (impressions)- 36,964
Number of times people actually clicked on our ad when they saw it
(click-throughs) - 429
Percentage people who clicked on our ad (click-through rate)- % 1.16
Ad cost per visitor - $ 1.17
Number of times a person visiting our site made a purchase - 10
Percentage of visitors who purchased something (conversion rate)-% 2.3
Average sale per purchase- $ 7.70
Average revenue per visitor- $ 0.18
Average gross profit per visitor- $ (0.99)

Running the Numbers

Putting this all together Cheap Javi Martinez Jersey , you can create a formula for estimating the
gross margin per visitor for a specific marketing campaign:

Average Gross Margin per Visitor = Average revenue per visitor -
Advertising Cost per Visitor
Advertising Cost per Visitor = Campaign Costs (Impressions x Click-
through rate)

Average revenue per visitor = Conversion rate x Average sale per
purchase

Putting it together:

Average Gross Margin per Visitor = (Conversion rate x Average sale per
purchase) ? (Campaign Costs Impressions x Click-through rate)

Using our Google example, the average gross margin per visitor would be
calculated as:

Average Gross Margin per Visitor = (0.023 x $ 7.7) - $500 (36,964 x
.016) = (0.99)

Remember, this formula can only be used for a single type of campaign.
Depending upon your target audience and the type of campaign, all of
the above variables can change. When we launched our Google campaign Cheap James Rodriguez Jersey ,
we used impression-based advertising, that is, we paid Google a certain
amount of money for every 1,000 impressions of our ad (about $15 per
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