How does anyone make money from PPC?!

[Mr Pointy]

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I’m currently running a PPC (Pay Per Click) campaign on Yahoo (can’t afford Google!) for my new cheap theatre ticket site, which is themed from/linked to my Cheap Event Tickets site.

September is apparently peak booking time for theatre tickets in the UK, so I decided to go for a big push on some of the most popular & well known London shows.

I’ve set up targeted ad groups for these shows, containing well researched long tail keywords (which all have a decent KEI) and have carefully worded the ads, drawing on existing ads by well established companies in this sector. Most of the ads are displaying ticket prices, so the “clicker” knows what to expect & won’t click just to see what the price is.

Most of the ads are displaying in position 1 on Yahoo (these bids are around £1; on Google you are looking at around £3 for these keywords!!!) & the click through rates are currently between 3 & 8%, which I believe is not bad.

So, following all the rules & strategies I’ve read over the last couple of years for successful PPC advertising & marketing, how are the ads doing?

Well, I’ve had ONE SALE, from 36 clicks! Admittedly it was a decent sale & my commission will be £12 from it, but it has cost me £21 to get it!!!! On Google, I’d have paid triple that, without any guarantee of more sales. The companies that advertise theatre tickets on Google presumably make more money per sale than I do, but I still don’t see how they can make a profit when they’re paying such huge amounts for clicks!

It doesn’t seem possible to make a profit from affiliate marketing, using Google (or even Yahoo) PPC, unless you’re using such obscure terms that you pay only a few pence per click, but then I would've thought you really should be able to obtain natural search engine positions for them if they’re THAT obscure!

So, once again I’ll be grateful just to break even on PPC & would love to know if any other affiliate marketers makes a profit from Google Adwords/Yahoo Search Marketing?!

[Michael_Anthony]

PPC works best when the product/service that you are promoting has a high margin and can support a reasonably high cost per click. Yours does not appear to qualify.

In addition, 1 sale in 36 visits is dire - our best sites do 1 in 6-8, so the site needs to sell more and inform less. A good site says "buy/apply or f off" - as I've mentioned elsewhere, you need to be running a shop, not a library.

Another point here is that you will be competing directly with merchants, who have higher margins and can therefore afford higher bids.

[Mr Pointy]

Cheers.

There's nothing else for the user to do on the site but buy or leave. The site simply sells theatre tickets, my ads say "buy theatre tickets" etc. so I believe this is as clear as possible.

But it seems on this basis, that a margin of 10% commission isn't high enough; it seems like PPC on any affiliate product is pointless, unless you're making 50% commission (digital products etc.)?

The click through rate has risen across the board (up to 14% in the best case) but still only one sale from 44 clicks looks like it's definitely not worth me bothering with this method any more.

I'm considering a max bid on Adwords of £0.50, which would leave my ads languishing some way down, but at least any click will only cost 50p max. Alternatively it's back to blogging, bookmarking & articles for SEO & organic rankings!!

[Michael_Anthony]

I'd consider reducing your bids - you don't need to be the top result, you need to make a profit. I'd also consider adding more keywords. As a rule, generic stuff is more expensive and converts poorly.

This said, it's still a pretty borderline proposition given the low margins, and it is true that many retail products and services just don't have adequate margins to support PPC, whereas lead gen and downloads do.