PPC Mathematics

[Bryson]

I would like to start a thread about PPC mathematics, any experience and knowledge would be awesome

First topic: Links In, Links Out vs. Cost

Is it smart to promote your site on sites that have a low PPC, and then turn around and have a higher cost on yours?

For example, you promote your site on site "A" for 1 cent per click. The visitor on site "A" then goes to your sites home page. He browses a bit, clicks on another link on your site. That click to you is worth 5 cents. So in theory, it would only cost 1 cent to earn 5.

Here is the hidden value: The page that the visitor goes to also has an impression banner. For math purposes, a per impression from that company earns you 1 cent. Youll always break even, but your site awareness has gone up.

Im I off base? Or is this just some basic ROI math?
ROI- return on investment

[Psan]

Won't work that way unless you have a great CTR. You have to remember not everyone who goes to your site will click the ads. In fact the avg CTR is somewhere around 2-3.

Good idea on paper but won't work in "real life"

[Wojtek]

1 cent per impression equals to a 10$ CPM

But in the real world an average CPM of 0.50$ gives you 0.05 cents (0.0005$) per 1 (unique) visitor

Say you got a 2% CTR,
for 1000 visitors you paid 100$ (1 cent / visitor)
out of those 1000, 20 clicked on a link making you say 5cents.
20 * 0.05 = 1.00$
1$ + 0.50$ (CPM advert) = 1.50$ profit for 1000 visitors

Expenses:
100$

Profits:
1.50$

[Psan]

I donno where you'd get 1 *unique* hit for $0.01.

Adwords starts at $0.05+ and I wouldn't trust many of those "Get 5 billion unique hits overnight for $9.99!!!!"

[Decker]

Never been a big fan of the 'if it's clicked you pay' type of ads.

[Bryson]

ADbrite (http://adbrite.com) has a system where you can find websites on thier network with thier ad rates (PPC). This is what I was saying about the 1 cent per click, because it is actually a realistic figure. I know about the 1 in 5 thing as well, of course not everyone will click on the ads because now a days people know you get paid like that.

Now that we know 1 cent per click rate is realistic in some cases, how would (or do now) leverage your for pay advertising methods versus ones that bring in free traffic? One thing I have learned is those groups rooms, (not yahoo's though) on Google brings a little traffic for free. Does anyone advertise more in free places than for a fee ones?

[Bryson]

I donno where you'd get 1 *unique* hit for $0.01.

Adwords starts at $0.05+ and I wouldn't trust many of those "Get 5 billion unique hits overnight for $9.99!!!!"

I wouldnt trust them either, because they are more than likely an FFA site. Bad neighborhoods can kill the website before it is even mainstreamed.

What if there was a site, a hybrid between FFA, divided into pageranks and category with real content? Of course, it would need content other than links.

Am I wrong by saying this- if you link to a bad FFA site, your pagerank will hurt. If your link is on that same FFA site, and you DONT link to the site, (like that will happen) your rating will not hurt.

[Decker]

The amount of time and money spent on unrealistic ad campaigns should be made criminal :)

We've always went on the 1 ad 1 month 1 fee - as the exposure increases then obviously you can increase your prices - but that's more a get what you pay for scenario. In that it's exposure to 'X' amount of visitors.

If your ad and offer is good you'll get visited plus the alt text can help your search engine ratings so the higher they rank the higher rank it's possible to get from those ads which may show up in searches so you get indirect hits that way too :D

One of the major points is that anyone serious about advertising will have a budget - it's far more appetising to know 'how long' than 'how many' as the 'how many you work out yourself from your referers stats.

Get say 2 weeks of exposure on a high profile site as compaired to a day and a half for the same money, I'd choose the 2 weeks. Not all prospective clients click first time and may get distracted during a browse, but you just lost your click.

Will someone please get rid of this soapbox someone keeps slipping under me when I'm not looking ;D

[Bryson]

Id rather pay the $299 inclusion fee to be on the Yahoo Directory every year. Of course, the road I am trying to go down has been travelled so many times by so many people. Therefore, to even be categorized on there would be an absolute mission accomplished. Pay a larger fee to a larger site, just as you would buy a house. The bigger, better houses have a higher value, as well as more to pay, essentially you get what you invest in most of the time. I have a fund going (currently almost 300 dollars in change, literally) that I am saving for when I am done the entire project and will use as my "for a fee" advertising. I think people get overwhelmed with building a site, with advertising, and all the terms and technical words. I have this to say, build your foundation, build it good and take the time to reinforce it, because the internet is not going to go away anytime soon.

[Decker]

I feel like doing the thing from the body snatchers - seriously post the reward on that.

It's sod all and overpriced.

You get a price and no gurantees

[Bryson]

Yeah I guess your right, not really targeted either. Yahoo is the biggest Generalist on the net. They provide anything and everything. However, I dont think you can beat the page rank of 10/10. And at $299, less than a dollar a day, for a static listing. I guess it all evens out in the end.

[Decker]

The 10/10 gets what - we have a 4 and pay nothing, why pay them and what do you really get?

[Bryson]

Exposure I guess. You can get that anywhere if you are crafty and have the desire. If you are building a website, I dont see why you wouldnt have the desire. However, although directories are generally not targeted traffic getters, Yahoo, business.com etc, I dont see how you can go wrong trying to get in them if the price is good. Exposure is relevant, and Yahoo would get you a lot of exposure. Think of it, what is brand awareness? If people start seeing your site advertised on legit places, they will take you more seriously. Studies say that people wont subscribe to what you are selling or promoting until 7 exposures. Atleast this adds one to that number. The fee I think it isnt necessarily an investment in hopes of making money on the specific advertised on. For example, the 299 fee brings 20,000 visitors, of those, 10 people buy something, you break even lets say. What about the other 19,990? They are aware your site is out there now. You do more advertising on other sites, of those that saw your site listed on Yahoo, 2,000 see your site now on lets say DMOZ. BAM! Brand Reinforcement. Exposure. Visitors are now customers. Of course, the one on DMOZ is free (I think) But because of your listing in Yahoo, you are suddenly more relevant.

I still think its good to be listed by them, but more power to you for a PR 4 with no fees. Imagine what could happen if you opened your doors a little more.