Profit Improving Online Strategies

Use Powerful Profit Improving Internet Marketing Strategies To Grow Your Online Business!

PPC Calculations (Pay-Per-Click)

Calculate Your Conversion Rate

t may seem to be difficult to estimate your conversion rate that you might be able to achieve form a Pay-Per-Click advertising campaign. A safe and rather practical way is the following recommended by Ken Evoy:

First estimate the percentage of visitors expected to subscribe to your newsletter, then estimate the percentage of those subscribers expected to convert into customers.

Why select subscribers for this calculation? Newsletter subscribers have shown their interest in your service by signing up so they can be considered as leads of the highest quality. Unless your service requires very little commitment (financial, time or otherwise) on the part of the visitor, it is unlikely you will convert a significant percentage of "first-time-visitors" into clients.

The process to determine the percentage of visitors that sign up for your newsletter is simple. Take the number of newsletter subscriptions generated in any given time period (per day, per week, etc.) and divide that number by your sites's unique visitor stats for the same period.

Even if it takes 60 - 90 days to turn a subscriber into a customer, it makes sense since your subscribers are highly qualified. If you deliver quality content with your newsletter, and your offer on your site is of good value, you can expect a decent conversion rate.

According to Dr. Ralph F. Wilson, 4% to 5% conversion rates are considered good, but the average conversion rate is substantially under 2%, probably at or below 0.5%. To pay these prices, you need a pretty big-ticket item.

Calculate Your Cost Per Sale

So how do you know what you can afford to pay for your ads? The only way to find this out is to test carefully in order to determine your cost per sale which is calculated by the formula:

For a PPC cost of $5.50, with a conversion rate of 1%, the ad cost per sale is $550. => 100 / 1.0 * $5.50 = $550.

Calculate The Value Of A Visitor

To calculate the value of one visitor to your web site, you need two figures:

- Your net profit per sale (e.g. $50)
- The number of visitors you need to your site to convert one sale (e.g. 100 visitors)