#### v8rx7guy

• Handlebar Stache
• Posts: 1075
• Location: Bellingham, WA
« on: May 01, 2018, 10:34:03 PM »
It's hard to figure out someone can actually make money advertising on Google or Facebook.  It seems like the going rate for \$/click is something like \$0.50 per click through to your website at best.  With a conversion rate of 5% of those that click through to your website (which would be damn good) that's \$10 in advertising to make one sale.  More often than not it's going to be \$0.75 per click and a 2% conversion rate.  That's \$38 in advertising to make a sale.  What am I missing here?  How can this possibly pencil out for anyone?!

#### Smokystache

• Bristles
• Posts: 310
« Reply #1 on: May 02, 2018, 09:08:53 AM »
Couple things:
- There are different click rates and conversion rates for different products/services
- The biggest variable missing from your equation is the net revenue per sale. For example, if someone is selling an online course and makes a net revenue of \$200 (lets' assume the price of the course is \$279, minus \$79 in costs to the seller (advertising (\$38 or more), hosting, website, payment processing, etc.), then it's a great deal. Spend \$38, make \$200. Spend \$38,  make \$200.

But you're right, you can't spend \$38 to sell (for example) a \$19 product/service. That math don't work.

#### v8rx7guy

• Handlebar Stache
• Posts: 1075
• Location: Bellingham, WA
« Reply #2 on: May 02, 2018, 02:01:43 PM »
Couple things:
- There are different click rates and conversion rates for different products/services
- The biggest variable missing from your equation is the net revenue per sale. For example, if someone is selling an online course and makes a net revenue of \$200 (lets' assume the price of the course is \$279, minus \$79 in costs to the seller (advertising (\$38 or more), hosting, website, payment processing, etc.), then it's a great deal. Spend \$38, make \$200. Spend \$38,  make \$200.

But you're right, you can't spend \$38 to sell (for example) a \$19 product/service. That math don't work.

Oh yeah, I totally agree with you, it makes a whole lot more sense when you're selling something that has decent profit margins built into it!  I am working with making \$20 per sale, so yeah, I am starting to think this is the wrong method for me to reach my audience.  Fortunately, I am just burning though a "spend \$25, get \$100" bonus from Google, but I'm not sure if I am going to continue down the adwords path after that.

#### OkieM

• Posts: 48
« Reply #3 on: May 03, 2018, 05:54:38 PM »
Are you using keyword planner and all that? It is harder with a \$20 product but there could still be niche keywords that are less expensive. Generally you have to find the lower competition keywords then build a landing page for the specific ad and sells your product exactly to what that searcher is looking for.

But at the end of the day Google is a behemoth because they use auctions that sell ads and extract most of the value your product generates. Other channels may be better options.

#### damyst

• Stubble
• Posts: 145
• Age: 42
« Reply #4 on: May 05, 2018, 05:59:08 PM »
This might be interesting for you:

I've been devouring Rob Walling's blog posts lately, and learning a ton.

#### v8rx7guy

• Handlebar Stache
• Posts: 1075
• Location: Bellingham, WA
« Reply #5 on: May 06, 2018, 08:23:38 AM »
This might be interesting for you:

I've been devouring Rob Walling's blog posts lately, and learning a ton.

Fantastic article,  thanks for posting it