PPC Financial Model - Conversion % / CPC / Profit Feasibility

If you are looking at getting into the Internet advertising space, one of the business models that many people jump right into and fail at is PPC promotion. People fail at it for lack of planning and poor conversion %'s. I have put together a spreadsheet that helps plan out potential max CPC's you can pay and what kind of profits you are looking at with various scales.




Pricing
*After purchase, you will be taken to a download page.

There are two primary types of advertising I go over. One for those promoting their own products/services and one for those promoting other's products or services for a commission.

The first type requires less conversion %'s in order to make a profit and allows for bigger profits, but it also requires that you develop and sell (deal with the logistics) of products or services or drop-ship them. Either way, the hard part here becomes building good products and the PPC is not really your business but it is part of your businesses advertising initiative.

The 2nd type is more of a specific advertising / marketing business where you are simply paid a % of sales that you send to someone else. With Google Adwords and other major ad networks, you will have to sent your traffic to your own website that has to have added value and not just act as a bridge to the merchant. Be creative with this part and you can improve your conversions and get access to unlimited high quality clicks from Google (still at a price, but they are the best place to test anything).

The second business type (affiliate marketing) is less barrier to entry but requires much more planning and careful structuring. Your only goal is to make it so that every click you are paying for gives you the highest % chance possible of that visitor going and purchasing whatever you are selling. Just tiny conversion % increases will make a very big difference in your net profit as you will see in the video.

The Excel Model For PPC Campaigns:

  • Walks the user through developing their projected conversion %
  • Two way functionality to test both PPC models (direct or affiliate)
  • Includes a break-even CPC
  • Set a given CPC that you plan on spending
  • The net profit and profit per day will then populate
  • Charts are included to compare both types of models
  • An annual financial summary includes monthly:
    • Revenue
    • CPC
    • Other Running Costs
    • CapEx
    • Net Cash Flow
  • The drop downs and control use dynamic logic to make it easy to test and show various scenarios of the PPC campaign you plan on starting.

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