One of the daunting tasks of affiliate marketing is finding a profitable product/offer to market/sell.
You have yourself an AdWords account and you are signed up with CPA Networks. However, from the
sea of offers you are not sure which are profitable. Going through each offer in depth is time consuming
so you need a quick indicator to see if an offer is even worth delving deep into.
Though there is no sure way of knowing if a product will be profitable, there are some things you can do
to filter out the offers that will lose you money as a traffic broker.
One method you can use to find out if an offer is profitable or not is to do some quick calculation of how
much an offer will cost to you on average versus what is the expected commission or income it will bring
in.
Below I will show you the steps to go through in order to calculate profitability using AdWords to
estimate your advertising costs
1. Determine the commission you will make per sale. This information can be obtained from your
affiliate network.
2. Determine the conversion rate. This means out of all the potential buyers that arrive at your pre-sell
or landing page, how many do you think will buy the product you are promoting. If 1 out of 100 will buy
your product, then you have 1% conversation rate.
3. Determine your maximum daily budget for spending on AdWords. On daily basis how much are you
willing to pay for AdWords clicks? Do not try to figure out how much you are willing to spend per click,
that will come later as part of the calculation
4. Find out the main keyword you would like build your AdWords campaign on
5. Go to the Google's new Traffic Estimator Tool
6. Type your keyword, your maximum daily budget to spend on AdWords, and click Estimate button
7. You will see the keyword result containing the keyword phrase that you provided along with
Estimated Average CPC (Cost per click), Estimated Clicks and Estimated Daily Cost
8. Do Estimated Daily Cost x 30 = Estimated Monthly Cost
9. Do Estimated Clicks x 30 = Estimated Monthly Clicks
10. Do Estimated Monthly Clicks x Conversion Rate% = Estimate # of sales
11. Do Commission per sale x Estimated # of Sales = Monthly Commissions
12. Do Monthly Commissions - Estimated Monthly Cost = Estimated Monthly Profit
Fortunately, you do not have to do this by hand, there is a free online tool that will help you do this
calculation.You can follow steps up to #7 then use the AdWords Return of Investment Calculation Tool.
If your Estimated Monthly Profit is a positive number than you have a chance to make money from this
offer. If it's negative, forget it and find another offer. Repeat this process for as many offers as you can
to find ones that make some financial sense before you dig deeper into evaluating them.
Remember this is only a quick check to see a "bad apple", it's not intended to be comprehensive and
without giving the offers a try and you don't know for sure. Instead of having to try out every offer, this
method will cut down on the work and you'll be able to find a profitability product quicker.
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