Thursday, October 28, 2004

Lesson Learned...

So, today I wish to share a little story about my own Adwords marketing.

It all started when I learned about Wordtracker and few other ways to find out what people are searching for online. Wordtracker has a "Top Searches" ticker on their site that let's you see the Top 50 most searched for (non-adult) terms of the day. Their actual product is the best search-term research tool available. It's designed to help you target the best words for your site or ads or whatever. It is very common to see referrences to Wordtracker scattered throughout the ecommerce community. They've become something of an internet marketer institution.

Anyway, from Wordtracker I picked up the fact that in October, people are looking for Halloween stuff. Lots of people. I decided to see if I could cash in on that seasonal traffic.

Before I go any further, let me give you those "other ways" to find popular searches that I mentioned. The first is the Lycos Top 50. The second is Yahoo's Buzz Index (be sure to check the Overall category). The third is Google Zeitgeist, which has quite a creative name. I'm sure that there's more out there since this is a pretty popular topic.

Okay, so Halloween. I thought, "I should find a great online costume store and promote that with Adwords." That's just what I did. I found a program that was managed through Commission Junction, allowed keyword bidding (not all CJ programs do, which is stupid), and had a really great store with tons of costumes.

So I joined the program and set everything up. I wrote my ad about costumes and got my keywords together. I focused on 'halloween' and 'costumes', but I did have to do some research to narrow things down. For example, I didn't want my ads shown to people looking for 'halloween party ideas', or 'free costume ideas' or anything like that. Google has its own keyword tool within the Adwords program which is very useful and can help you find things you'll want to exclude.

Sometime I'll get into the details of keyword research but that's not the point of this story. The point of this story is that I got almost 600 click-throughs in about 3 days. That cost me about $86. From all that traffic I made 13 sales totalling about $480 dollars. The only problem was that my commision was only 6%. I earned less than $30, putting me $56 in the hole for that campaign.

The moral of the story is that marketing with Adwords has its limitations. For instance, it costs money. If you're going to market something that has very popular terms, you need to be sure that the sales you make are going to exceed your advertising costs. I was only paying, on average, $.16 per click and never more than $.20. If I had been earning at least $6-7 per sale I would have broken even, but I was earning an average of $2.21 per sale and lost money.

As far as my ratio of clicks-to-sales, I got about 2.2%. That's not great, but most affiliate marketers would find that to be acceptable. 5-7% would be great, especially if you were making more like $15-20 per sale. If I had been earning $15 per sale I would have made $195 which would have covered my costs and a good amount of groceries. Also, I wouldn't have stopped my campaign after 3 days and the store would have gotten more sales.

I don't want to scare you away from all programs that offer lower percentage commissions. This campaign would have been very profitable if I had used a website to market it. When you don't pay for your visitors, you can leave the ad up longer and, well, you have less to risk and less to lose. I learned that with Adwords, you need to be pretty careful about that.


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