Evaluating an AdWords Campaign for Affiliate Marketing

Evaluating an AdWords Campaign for Affiliate Marketing

Recently, HostGator — my Web hosting provider — sent a card in the mail giving me a $100 credit to try Google AdWords. This encouraged me to do a bit of experimentation, which I’ll post about in the future. Today, though, I’d like to write a bit about the process of evaluating the feasibility of a potential AdWords campaign.

Although AdWords is a great idea for businesses with a product or service to sell, it may not always be the best idea for affiliate marketers. After all, with most affiliate programs, you’re looking at just a few dollars for each successful conversion, and the conversion rate may be quite low. Is your affiliate website a good fit for AdWords? Let’s take a look. We’ll start with a few hypothetical figures, which you can modify for your website.

Let’s suppose that:

  • You are willing to spend a maximum of $.20 per click
  • Your affiliate partner pays $8.00 for each successful conversion
  • Your website converts 2% of its visitors into buyers

Using these figures, you will pay $20 for every 100 visitors that your website receives through AdWords. However, your average conversion rate will net you just $16 for every $20 that you spend. Using AdWords is probably not the best way to market your website. However, what if you lowered your bid to $.10? In this case, every $10 spent would net you $16. That sounds like a much better deal.

Of course, when evaluating your potential AdWords campaign, you will need to know whether the amount of money that you want to bid will actually result in your ad being displayed. The Google AdWords Keyword Tool can tell you this.

  1. Open the keyword tool and click “Traffic Estimator” on the left side.
  2. Type the keyword phrase that you want to advertise for using the “Word or phrase” field.
  3. Type the amount of money that you are willing to bid in the “Max CPC” field.
  4. Type the maximum amount of money that you are willing to spend each day in the “Daily Budget” field.
  5. Click “Estimate” after typing the letters shown in the CAPTCHA image.

Evaluate AdWords Campaign Affiliate MarketingAs you can see, if my keyword phrase is “proofreading service,” and my maximum bid per click is $.10, I’m out of luck. In fact, I would have to bid upwards of $1.00 per click just to crack the sixth ad position for this keyword. The AdWords Keyword Tool can help you determine whether your potential AdWords campaign is feasible given the amount of money that you are willing to spend and what you can potentially earn from affiliate conversions.

Lastly, before starting an AdWords campaign, ask yourself these questions:

  • Is your goal to convert a visitor into a sale, or do you simply hope to attract more attention and repeat visitors for your website?
  • If your goal is to convert, is the landing page attractive, and have you tested it though organic search or a less expensive advertising network to confirm that it converts as many visitors as possible?
  • If your goal is to attract more visitors, does your website have enough content that visitors will be encouraged to browse and read for a while during their first visit, and hopefully bookmark the page and visit again in the future?

You should make sure that you have clear answers for all of these questions before starting an AdWords campaign.



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