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Advertising Online


beesweet
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It really depends on what site/market your planning to advertise on. I've heard of people paying thousands a week for a banner ad, some pay a few bucks. Find out what your budget is, and advertise on websites that best fit your target market. I think it is safe to say there is no "average".

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Perhaps I should have posed the question differently. I'm just curious what others are willing to pay and opinions, thoughts, ideas. We don't see much on the boards regarding advertising.

What are you willing to pay for weekly/monthly advertising and what do you expect in return as far as hits, sales, etc.?

If a site doesn't generate much traffic, but gives you exposure, how much would that be worth? One site we advertised with in the past for less than $20/month has now increased to $40/month without an increase in hits and no sales that can be directly linked to that site so that made me question exactly how I should be looking at advertising and the benefits.

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If a site doesn't generate much traffic, but gives you exposure, how much would that be worth? One site we advertised with in the past for less than $20/month has now increased to $40/month without an increase in hits and no sales that can be directly linked to that site so that made me question exactly how I should be looking at advertising and the benefits.

You've answered your question partly right there. You have not seen any sales or even hits really coming from this advertising venue. So for this company, you may as well just be throwing $20 in the trash. It sounds like it's doing you about that much good.

As for figuring out how much to spend on a specific line of advertising, it's all about ROI, or Return On Investment. Your ROI must be worth it. To be able to calculate this, you also have to know your profit on your products, your average order size, and your conversion rate.

So let's say your average web order is $30.00, and $15.00 of that is profit. I'm also going to assume your conversion rate is 1% (2% and up is optimal and very good). If you don't know what a conversion rate is, holler, and I'll start SEO 101.

My example is going to use pay-per-click methods, because it's easier to explain. But you should be able to see how that applies to any type of paid advertising on your site. Testing is key. As you mentioned, the company you're currently working with isn't bringing in results. That should tell you right there it's not worth $20 a month.

1 person out of 100 visitors is placing an order on your site. If you're paying 10 cents per click (Pay Per Click = PPC) for customers to come to your website, then 100 visitors is costing you $10.00. So it's costing you $10 to get you one $30 sale. With your profit margin of $15, you end up with $5 profit from the sale. Is this worth it? Only you can decide.

If your conversion rate is 2%, two people out of 100 are buying stuff. You still only have paid $10 for the click throughs, but you've sold $60 instead of $30, and have $30 worth of profit. Now you have $20 profit after the PPC has been paid. Is that worth it? Again, only you can decide, but you can see how tiny changes can make a big difference. Simply by converting one more visitor you've tripled your profit.

Now with conversion rates (I'm going to discuss it a little here, simply because if I go on, and you don't know what it means, you'll be lost), 2% is very good. Even the top selling websites usually don't consistently get more than 3%. They'll have spikes above those percentages, but 2% is very good. Even 1% is good. It could be better, but it's decent, especially if you didn't know what conversion rates were, and haven't been working at them.

Anyway, you've got people visiting your site, browsing, then leaving. That person was not converted. At least not yet! :D If you get 1 person out of every 100 buying stuff from you, your conversion rate is 1%.

So how can you make your paid advertising work better for you?

STEP ONE: Improve your conversion rate. You can have all the traffic in the world coming through your site, but if your site is not converting the visitors into buyers, then your site isn't doing it's job. So before you work on getting MORE traffic, work on converting the traffic you currently have into buyers.

STEP TWO: Increase your order size. If your current average order size is $30, work on increasing that to $40. If you were getting $40 per order, then in the earlier examples, your final profits after your PPCs would have been $15 and $40. That's a good sized difference.

STEP THREE: Test, test, test. As you've already noticed, this current venue isn't working for you. I'm glad you actually KNOW that. A lot of people unfortunately do stuff, think it's helping their website, increasing traffic, increasing sales, but honestly, they don't know because they don't know how to check. If you don't know how to check the stats on your website, find out now. If you don't have a tracking program built in, get one. (speaking of which, I really need to check mine) If changes improve traffic or improve sales, or conversion rates, keep it. If it doesn't, ditch it.

Okay, I've got to go get some work done. I hope this helped (and made sense :confused:). I'll try to keep an eye on the thread as things progress, and answer questions as they come up. Have a great weekend in the mean time!

Edited to add this little tidbit.... If you are spending more on PPCs than you're getting back in profit, it obviously ISN'T worth it, and you're losing money. PPCs can cost all different kinds of amounts. The only way to know what your products can handle is knowing your ROI index. If it's $15 (based on the original example), then you can pay up to 15 cents per click and with your conversion rate at 1%, you'll break even. If you need more help on calculating this, holler, and I'll go see if I can dig up the calculation for it...

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LOL! Thanks Ronnie! Since I spent several years researching B&B stuff (ingredients, recipes, etc), I spend more time nowadays researching things like marketing, advertising, etc. I've learned a lot. And when I get going, I really get going. So it was long, but honestly, I barely even touched the tip of the iceberg...

Scary, isn't it???:shocked2:

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