Internet Marketing Fire

There seems to be an ever present mantra in the online marketing community telling people how easy it is to get involved with Google AdWords as well as Yahoo and MSN pay per click (PPC) advertising. While it can be relatively easy to launch a campaign if you expect to turn a profit you had better understand the math behind your campaign ROI and have a strategy to not only manage campaign spend but also improve landing page conversion.

Consider this:

If you sell a product for $500 and realize a 10% profit margin with a 2% conversion rate. For every 1000 visitors (click-throughs) to your landing page you will achieve 20 sales for a total of $10,000 gross income with a net profit of $1000.

If we take the $1000 divided be the 1000 visits we can now see that our maximum or break-even bid per click is $1.00. So the maximum cost-per-click (CPC) we can spend on any Ad without losing money must be $1.00 or less.

In other words:

(I/M)/V = MCPC

Income/Margin = Profit
Profit/Visits = Max CPC

This formula is of key importance to the potential profitability of your online business. CPC will rise over time and you had better know where your Max CPC limit stands before you get into a bidding war over a top position Ad placement.

Under the above conditions at the 2% conversion rate if the CPC required to place an Ad for certain prime keywords rises above the $1.00 mark you are effectively priced out of the market for those keywords.

So what would happen if you now were able to improve your conversion rate to 4% or 10%? At 4% conversion with the same 1000 visits you now have 40 sales for $20,000 gross with $2,000 net profit. Your Max CPC now also rises to $2.00 and you can once again compete for the higher priced keywords. At 10% conversion your PPC program becomes extremely profitable with 1000 visits bringing 100 sales with $5000 net profit.

So beyond the control formula to protect against runaway CPC spending the most important activity you can undertake as a PPC advertiser is… drum roll please… Landing page optimization. Let me say that again, “Landing Page Optimization is the key to increased profit through PPC advertising”.

Every Ad group should have a unique landing page and every landing page should be involved in a continuous A/B testing strategy.

You can test:

1. Page Layout 
2. Fonts and Color
3. Graphic Treatments
4. Content Copy
5. Incentives

You need to test each page thoroughly to achieve optimum returns and then keep testing trying to beat your top performing pages. If you do this level of continuous testing you will make more profit. There is simply no excuse not to.

Here is another CPC strategy for your consideration. Take your current CPC and reduce it by $.05 every 4th day. Do this until you see a point of diminishing returns. What you will find is that as price is reduced your daily budget goes farther and clicks will actually increase as a result. You need to track your clicks and conversions religiously during this process but what you learn about click to spend ratios will be invaluable to your bottom line.

If you employ the cost control strategy, landing page testing, and the minimum cost exposure strategy you will be well on your way to protecting your Ad spend investment and increasing your profits.

Executives take note. We know you are busy people and the technical aspects of the Internet and Internet Marketing  tactics are best left to technical managers. But the proactive executive still needs a clear concise framework of understanding from which to judge the merits and performance of the Internet Marketing directive.

We have prepared a quick executive overview of Internet Marketing strategy and tactics you can use to formulate a sound decision regarding your Internet Marketing requirements.

Download The Executive Guide to Internet Marketing

By Jon Janes, www.janesjournal.comThe Internet Marketing world has changed dramatically in the last six months. Evolving search engine algorithms and new social services are reforming the search landscape right before our eyes. With blog entries, article directories, and social networking sites making up over 30% of all top 10 search results on the Internet it begs the question. What does it take to launch an effective Internet marketing campaign in the age of Web 2.0 and beyond.

As more and more of the web becomes a network of individuals at the expense of corporate destinations the tipping point of social media assault on the web will make traditional Internet marketing i.e. SEO and SEM obsolete. The shear onslaught of blogs, articles, audio, video, influence marketing, and link back tactics combined with search engine evolution to weed out the bad and highlight the good will inevitably rake havoc on many once venerated web search bonanzas.

In order to create buzz and drive demand on the web in the current climate you need a full tilt Internet marketing onslaught. Nothing short of a huge network of blogs, articles, websites, social media pages, and email campaigns all strategically working in tandem will be required to penetrate the increasing bloat of super optimized content that currently exists.

One company Internet-Marketing-Fire understands this and has mastered the art of penetrating bloated markets on the web. After proving concept with some of the largest companies in the world the Internet Marketing Fire - Internet Marketing Assault Package is our top rated Internet Marketing play for 2008.