Learning PPC

For almost a month I’ve been focused on learning how to do pay per click advertising properly and profitably. It’s a business model based around a simple concept. Buy traffic with advertising and send them to a site which will convert a percentage of those visitors into buyers. The trick is to find the right match of keywords, ads, and product so that it costs less to advertise then you make in commissions.

There are a few tricky parts to the process however.

Paying the least amount possible for a click on your ad takes some strategy.  The price you pay can dramatically improve the profitability of a campaign so it’s important to be very methodical.  Also the destination can play a big part.  How the landing page is designed can have a big impact on the conversion rate.  There are a number of different approaches to take such as direct linking, a review page, a pre-sale page, or a name squeeze.  The approach you choose not only affects conversion but also impacts the click price with Adwords.

It’s also perhaps one of the most straight forward businesses with the least amount of risk that I’ve come across yet.  Anyone can simply open an adwords account, find some keywords, write and ad, connect it to a product and start testing in about 30 minutes.  Once you find one that is profitable just expand the campaign to get as much out of it as possible.

This business model really suits me.  It’s conceptually simple, and requires less time investment than blogging or information product creation.  Which was the real killer of everything I’ve tried so far.  What I need now is a small win;  just one campaign that is profitable to give me the confidence to start ramping things up.

The biggest problem is that this requires some serious cash flow to operate.  If you’re making a 50% ROI from the advertisement then making $100/day in net profit will take $200/day in expenses.  Since the paychecks could be coming as infrequently as once per month it may require enough credit to burn through $200*30=$6000 before getting the money to pay off the expenses.  So while it may not require that much of a time investment it does present some cash flow problems.

I’m excited to get home tonight to get some real work done.