Treat Your Business Like a Business Especially When Advertising Online

You’ll often see people talking about ads for pennies. The first question that should hit your mind is “Is that even possible?” The answer is maybe. You need to have it well targeted and optimized.  However, if it’s a competitive keyword, you will pay more due to the nature of the beast.

The penny ads are more targeted for the most part. That means usually audiences of less than 2000. The good news is that there’s a better chance those people will want what you’re selling, and you can test ads until you find one that’s responsive.

Remember, you need the right ad to the right people at the right time.

So what if your niche is very competitive and you need to spend dollars rather than pennies? That’s not a problem either depending upon your profit. It’s important to really understand your whole sales funnel to know how much money you could spend on client acquisition.

Let’s say that you have a $7 item, a $47 item and a $99 item.  You drive 1000 people and get 100 people to buy the $7. Then 10 people buying the $47 item, and 1 person buying the $99 item.  That’s a grand total of  $1269. If you spent $500 on advertising, you’d get a net profit of $769. Plus, these people are now (hopefully) on your email autoresponder list and earning you even more money with your recommendations of affiliate products.

That sounds pretty good, doesn’t it?

So why wouldn’t you spend $5000 and get $3845 profit?  Well, maybe you could.  Maybe it wouldn’t scale that way. That’s why I’m always telling you to monitor your profits compared to your expenses. Find your “sweet spot.”  It’s not a simple formula where you plug in a certain amount and you get out a set amount.

It could be that you spend $5000 and get $5000 profit, or $2000 profit.

Additionally you always need to be changing up your ads. People get ad fatigue if they see the ad too many times. That doesn’t mean you can’t bring that ad back every few months.

And that is why this blog post is titled treating your advertising like a business.

You may just need to drive people to a school fundraiser. You still should evaluate the amount you spend with the amount you are able to bring in. That will help you more then the actual cost per click.

I’m not saying don’t optimize to reduce your ad expense. I’m just counseling that you should know how much that ad will be bringing in to your bottom line so you know when it’s fully optimized.