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What is the best Affiliate program for Webmasters?

Commission Junction
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Votes 17
CPA: Your Marketing Should Depend on It

By Mark Daoust

Traditional Internet marketing wisdom states that website owners should take advantage of pay-per-click search engines. With their highly targeted, keyword-driven traffic, pay-per-click search engines are undoubtedly quality candidates for bringing in new business. But this wisdom is often taken for granted, without considering whether pay-per-click search engines are worth their total cost for an individual marketing campaign.

Pay-per-click search engines certainly have their place in the arena of Internet marketing. But what place they take in developing your marketing campaign needs to be considered. Many website owners, inspired by the wave articles from Internet marketing experts praising the unfaltering results of pay-per-click search engines, throw their money indiscriminately at pay-per-click search engines, surrendering per click costs of enormous magnitudes. These website owners are wasting money that can be applied to other, more effective venues.

Recently, on one very well known pay-per-click search engine, the bid price for the keyword "web hosting" was in excess of $12. The keyterm of "casino" exceeded $15.

If you read those last two sentences quickly, go back and read them again. Advertisers are spending as much as $15 for every click they receive. Is this too much?

Obviously $15 is an extreme in the realm of normal pay-per-click prices. But what is reasonable? Is $3 reasonable? What about $1.50? The question of how much you should be spending on advertising is a rather ambiguous one. In fact, no article or expert will be able to pontificate the ideal per click price. If one were to try, it would sound something like this: one should aim to lower the amount of money being spent on marketing, not at the expense of acquiring new clients, but rather to find an equilibrium between the money spent to acquire a new client and the number of clients being acquired for that particular business.

Simple, huh?

The actual point being made is to look at CPA, or cost per acquisition. How much are you spending to acquire a new client? When determining this cost, do not factor in expenses such as merchant account fees, phone fees, or general office fees. The goal is to look carefully at your advertising costs and how much you are currently spending in advertising to get one client in your virtual door. Once you know your current CPA, it is then possible to lower your CPA without affecting your sales revenue.

To lower your CPA, one of two things can be done:

  1. Eliminate advertising that does not convert prospects to sales, or

  2. Add new advertising that promises to have a very low CPA. Most companies use a combination of these two approaches.

====Determining Your Actual CPA====
To determine how to eliminate high CPA ads that you are running, it is necessary that you begin tracking the effectiveness of your advertising campaigns. There is a wide variety of tracking software available, including affiliate software that can be used to effectively track an ad's performance. If you are not tracking your ads currently, you should begin to do so immediately.

Determine how much you want to spend to acquire a single client. Notice that this is different than determining how much you are WILLING to spend to acquire a new client. If you ask yourself the second question, it is pretty much a given that you will spend more than you were originally wanting to spend. Any advertising that carries a CPA higher than you want to spend should be let go, even if it is producing some results. You are not just after any results; you are after low-cost results.

To replace high CPA advertisements that recently received your pink slip, it is important to look for new, lower CPA advertisements. Surprisingly, there are many sources for quality advertising that carry very low CPAs. In fact, many of them are free.

====CPA Reducing Strategies====
Web directories offer all sorts of free listings to businesses. Don't limit yourself to just looking for general web directories; look for industry specific directories that deal with your industry, or may be related to your industry in some way. Chances are there are free listings available with them. Don't turn your back on free search engines either. While trying to optimize your website for the traditional keyword relevancy based search engines may not be the best use of your time, search engines such as ExactSeek offer the opportunity to control your position by means other than bidding on keywords. If you believe that you have already listed your website will all the directories available, then search for some more. New directories are being setup daily and it's likely that the top businesses within your industry are already listed in them.

Jump on any opportunity to get a free listing for your website, a free link to your website, and especially free content on other people's websites. PRWeb.com is a great place to advertise your website for free. Submit press releases to news agencies that deal with your industry, your area, or even an industry that is related to your website. Many companies submit press releases on a daily basis. Not all of them will be published, but a well-placed press release can bring in more sales than an overpriced pay-per-click campaign.

Once you have exhausted your free marketing options, take advantage of the many low-cost options available to you. List your website on low-cost directories that ask for a nominal listing fee. Add your website to pay per click alternatives such as TowerSearch that offer low fees for guaranteed top placements. In addition to pay-per-click alternatives, use pay-per-click search engines that are effective, but carry lower costs per click, such as PageSeeker and Kanoodle. When developing keyword lists for pay-per-click search engines, replace high priced keywords with a high number of less searched, lower cost keywords.

After you have developed a quality base of free and low-cost marketing options, experiment with advertisements on websites that promise to deliver quality traffic to your site. Measure their effectiveness. If they deliver results, try and negotiate lower costs by agreeing to long-term advertising contracts. Many websites will be glad to offer a discount for guaranteed ad placement over several months.

Overall, when choosing your advertising, think about how you are spending your money. Be aware of your current CPA and your desired CPA. Realize that many free opportunities exist for your website, and many more low-cost opportunities exist as well. But most of all, know your CPA !

About The Author
Mark Daoust is the owner of TowerSearch. Get a guaranteed #1 position for the keywords you choose on TowerSearch and its network. Plans start from just $29.95/month.

Posted on Thursday, October 30 @ 09:36:10 CET by webmaster
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