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Why Every Affiliate Marketing Business Can Benefit From PPC Advertising

Affiliate marketers tend to have strong opinions about PPC. They may have put it in the too hard basket with or without trying it, they might have spent lots for little result or they may have even been banned and are still scratching their heads on exactly where it all went wrong. When we talk about PPC for the most part we are talking about Adwords. Sure there are other choices out there, the most prominent of which is Microsoft’s adCenter which allows you to advertise on Bing and Yahoo. The fact is though, even their combined volume is small compared to what you can get through Adwords, making Adwords the best bang for buck in terms of traffic your ad is exposed to.

Many affiliate marketers think that their business isn’t suited to PPC, their model not being built around direct calls to action that quickly send new visitors off to merchant’s sites. An example of this could be a travel search site that includes affiliate links for people to buy flights after they have picked routes and dates. Usually a site like this isn’t going to see a high conversion rate for each visitor. Many visitors will get confused with all the possible search options, others will just be using it as a guide to plan their trip or are just comparing prices. With travel you also get a lot of “window shoppers”, people that are looking at what is available without looking to make an immediate purchase.

As a rough guide to conversions I will put down some approximate numbers (feel free to disagree with these, they are somewhat based on experience and somewhat based on general feelings I have from affiliate marketing experience). For a single page with a direct call to action, such as links to a few targeted merchants in a niche, you might hope to get a conversion rate (a conversion here being a click through to a merchant) of 50-60%, but little reason for users to ever revisit your site. For a page with a bit more going on, still targeted, but including multiple merchants, multiple product choices, links to other pages and features on the site to visit, you might be looking at 30-40% conversion as being good (Of course this additional build out should benefit you by covering a wider collection of deals and giving you a far biggest list of relevant keywords. Also hopefully in making your site useful enough that people come back to in and not head straight to the merchant next time). This is still giving users a fairly direct path to merchants, just giving more options. Once you are providing users with a blank slate landing page with a large amount of possible search options and multiple levels of interface to get to a merchant you might be looking at 5% or less conversion rate. Of course with this type of model you are looking to acquire return customers that love the service enough to recommend it to friends.

It is pretty easy to run some numbers on a site not suited for PPC by virtue of conversion rate and determine it is a waste of time. Such numbers may be:
25 cents cost per click (relatively long tail term)
5% conversion
$5 cost per conversion
10 average conversions per sale (or any commissionable action)
$50 cost per commissionable action
$10 average commission

With those numbers you are $40 out of pocket on every time you earn commission,  the break even point a 25% conversion rate (assuming the other assumptions remain unchanged). You would also have to factor in how many of those paid visitors end up using your site again, telling friends, signing up to a mailing list or other services you offer. Even with all this though, advertising around general terms (which can cost a lot more than the CPC mentioned above) is probably not going to be a long term winner. Branding could come into play, using advertising as somewhat of a loss leader to get a critical mass of users. Although unless you have a lot of money in the bank your probably looking for direct quantifiable returns on your spend.

Another slightly different business model to consider is an informational site, to borrow from travel again you may have built up a site that has lots of quality articles on what to do when traveling to a certain place. Again your going to have affiliate links on things where available (and probably also running some ads) but users are primarily after your content rather than your offers. Many will come, read articles, then leave the site without clicking on any offers. This isn’t a bad thing, you may rank for a large number of terms and have repeat visitors, it will just mean individual PPC clicks will have a lot conversion and therefore a negative expected return.

So what can you do with PPC if you fit one of these lower conversion models?

More specific landing pages, use a different model for your PPC visitors.
From the simple math above, the low conversion rate isn’t going to make you a direct profit. What you can do though is pick out specific offers and either build a landing page around them or simply deep link people into existing functions of your website that would usually take user actions to get to. So instead of advertising on “travel search” or “travel search australia” you advertise on “melbourne to sydney”, “fly from melbourne to syndey” or  “cheap travel syndey to melbourne” etc. These ads can have destination urls that pre-populate your search engine for the specific Melbourne to Sydney route, you could also pre-pick a date range to give the user an instant idea of price. From this users will only require a small amount of actions to convert. Users searching for the specific route are also more likely to be looking to buy than those browsing around your site.

For a site with many informational articles the strategy would be to pick specific offers and target the article around that. So instead of a topic  ”Where to go in New York”, you would target a single New York attraction on which you are able to earn a decent commission and make the whole page about that. One thing you must be careful of though is being considered a bridge page by Google. This means that they decide the only purpose of your page is to send people to another site. If you have a decent collection of unique content on your site though which internal links between it you should be fine.

Promote special offers.
Merchants are frequently trying to push special offers. While the normal affiliate offers you are using might not work for PPC, building something around a really good special or unique opportunity might. This can be a good opportunity to test PPC against a limited set of keywords/ landing pages without rolling it out to you whole site.

Get a feel for keywords, where further SEO efforts are best placed.
Baring some amazing extra source of traffic, not being a PPC affiliate basically means you are an SEO affiliate (or amazing at social networking). Optimizing for organic traffic can be a very effective strategy, large amounts of free new or returning visitors is always going to be desirable. What is hard though is starting, initially you don’t have a great big list of keywords that work well and you also don’t know which are going to be dead ends. It is really hard to know where to best spend your time producing content and link building. Bidding across some broad match terms can quickly give you an idea on the type of traffic you get, the keywords they use and whether they convert. A broad match is a keyword which will display for that particular search query, as well as an other closely related ones. That way from a few keywords many different, more specific search terms are found that can be targeted.

Test features/ concepts.
Following on from the last point, if you are considering branching out into different areas or even using different content around your current offers you really want to know quickly whether the new ideas will fly. Usually it takes time to build up search rankings for new terms in organic results, this could be wasted time when you find out that traffic from these searches isn’t converting well. Google’s keyword tools can give you a rough idea of expected search query volume but what visitors will do once they reach you site is a big unknown. The fastest way to test this is PPC.

Learn.
Even if right now your affiliate marketing business is unable to make PPC work at all, there is always the experience you will get by giving it a shot. Adwords is both a powerful and extremely complex tool, an important once in any marketers arsenal. AffClicks simplifies the experience, putting it in the reach of even the smallest part time affiliates but there is still a learning curve there that can only be overcome once you get stuck in and run some ad campaigns.

Once a campaign is running, the affiliate marketers next big question is how am I going to track the results? Without a specialized tool this is a difficult task, if you are a merchant doing direct sales you can put conversion code on your sales thank you page and have little problems tracking ROI. For affiliates though you don’t control the sales process so most of the time this isn’t an option. One of the core motivations for AffClicks is to get around this issue, although we have extended a lot further to build a comprehensive solution for PPC affiliates.

Currently this isn’t available as we still need out API implementation approved by Google but the commission aggregation component plus much more is, signup for beta on affclicks.com if you are interested.

I would love to hear others opinions on PPC and affiliate marketing, what have you found successful? What has just cost your money? And any problems you have had that more advanced tools could solve.

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