Why Your Best Keywords May Not Be

Pay-Per-Click advertising is one of the very best ways toquickly and (often) cheaply get the word out about yourbusiness. A new campaign can be "live" in just a couple hoursand can bring in thousands of visitors and sales in its firstweek.

It can also drain your bank account like a bandit.

The key to making your PPC campaign is simple: Only bid onkeywords that will make you money. Here's how you can do that:

Step One: Know the Value of a Customer

While some people use a longer time line, I use a 12 monthaverage to figure the value of a customer. I calculate how manydifferent customers I have received over the last 12 months anddivide that by the total net profit I received from thosecustomers' purchases.

That gives me the average 12 month value of a customer.

If you are new and just starting out, the 12 month value of acustomer will have to be an educated guess-take the net profitper sale and use that figure.

For newsletter publishers who only sell affiliate products, usea figure of $5 to $10 per year per "opened" email. If you don'tknow what an "open rate" is or how to track it, I have placed atutorial here:

All-In-One-Business.com Openrate

For this article, let's pretend we are selling a monthlymembership at $17 per month where the "average" sale results in$17 and the average person keeps the subscription for 8 months.

$ 17 x 8 months is $136 gross income per customer.

If out of that $17 our net profit is $10, then our one yearprofit per customer would be $80:

$10 x 8 months is $10 net profit per customer.

Once you know the net profit per customer for a year, then youare ready for step two.

Step Two: Know How Much You Are Willing to Pay Customer

We typically base our advertising on the 1 year value of a *newsubscriber* rather than a customer, since we often use atwo-step method of advertising our products-we first get peopleto a free report then advertise our products to them.

I am willing to pay up to 50% of my 1 year value per subscriberin order to get them on my list.

In most cases, 50% of net 1 year value of a customer is a goodfigure to use.

So, based on our "subscription" example above, I would bewilling to spend 50% of $80 to get the customer: $40.

In my next article I will show you exactly how to use thesefigures to bid on the exact words that will give you thegreatest return.

Step Three: Know How Much You Are Willing to Pay Per Click

If I am willing to pay $40 in advertising to get a newcustomer, then I need to determine how many visitors I will need to getthat customer.

If you already have that figure, use your actual results. If not, here are some rules of thumb you can use:

If you have a single product sales site with a price-point below $50, use a figure of 1 sale per 100 visits.

In the case of a single product sales site with a price-point over $50, use a figure of 1 sale per 200 visits.

If you have a free trial site, use a figure of 1 sale in 30 visits.

If you have a free report lead generator, use 1 sale in 20 visits.

For our subscription site example, I will be offering a 10 dayfree trial, so I will go with 1 sale in 30 visits. So, I am willing topay $40.00 divided by 30 clicks or $1.33 per click.

Step Four: Get Your Keyword List and Prices

Generating a list of keywords is crucial to getting affordable traffic to your offer.

Most people get the top 25 or 30 keywords according to traffic and end up paying top-dollar for all their traffic.

For example: My main market niche is people who are interestedin working at home. In order for me to get a top 10 listing withOverture.com for "work at home" I would have to pay over $1.50 perclick. Number 1 would cost me $2.67.

At 300,000 plus searches per month, that could run into some money pretty fast unless I can offset that with high volume sales.

But we want to take a different approach. We want to get a highvolume of traffic from a much higher number of much less costly searchterms.

"at home work" at Overture.com only costs 77 cents to break the top 10, though the search volume is 1/100th.

My "trick" to finding those keywords is to "pretend" to set up an account with Google Adwords here:

All-In-One-Business.com Adwords

(You will likely want to "really" set one up, but just goingthrough this exercise will allow you to use the keyword suggestiontool...)

Using their keyword suggestion tool you can identify hundreds of related keywords and put them to work for you.

By choosing hundreds of lower priced but still targetedkeywords rather than a few high-priced keywords, you can still getsolid traffic but at a much lower cost.

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