Conversion Calculation.

Keep working with http://marketplace.clickbank.net/ we can determine which goods is in popular demand on the market, which commission of sales we can get and a lot of other things which are available Online.
Let’s start from the determination of what ‘conversion’ is.

Conversion is an equation which determines the number of users, which became the subscribers, buyers or members of an affiliate program which you advertise.

Saying in simple words, CONVERSION is a proportion of quantity of people which have visited your e-shop, to quantity of people which made required action, viz, buy of goods, registration on the web-site, click and advertising review.

Conversion is very important parameter of determination of the budget of your business. You have to know the volume of expenses for advertisement, how these expenses are paid for your business.

For example, formula of calculation of users’ conversion, which had subscribed or had bought the product, could be as follows:

Number of users + number of buyers = rate exchange

In other words, if your web-site and your advertisement has 10 000 users and 500 subscriptions for news (or result clicks, that is clicks, which resulted in purchases), then the conversion will comprise 1 to 20.

If the owner of the affiliate program offers you conversion 1:20, it means that one of twenty users is going to buy (registration, or any other action, which you’ll be paid for).
You have placed an advertising on Google, your advertising budget comprises 50$ per day, and you pay 0,10$ per click. It means that you are to have 500 users, in order your expenses have to be repaid. Profit = expenses.

Let’s do approximate calculation of your profit of ONE affiliate program. This is not a hard task:
Let’s guess:
- We choose goods on http://marketplace.clickbank.net/
- Offered conversion is 1:30
- Profit of one sale is going to comprise, for example, 30$.
- 1 click on you advertising will cost you 0,20$ (it depends of key-word cost).
Let’s define how much we have to pay to Google in order to complete ONE sell:
Pay per click * quantity of clicks = expenses for advertising

0.20$ * 30 = 6$ - is our payment for advertising by Google at ONE sale.
Let’s estimate our profit!

Profit of a sale – expenses for advertisement = profit
30$ - 6$ = 24$ - thus, profit of one sale with our affiliate program will comprise USD 24.
Let’s imagine that we pay advertisement at the arte of 60$, it’s 300 users.
If the conversion is correct, we will make 10 sales and get:
300$ - 60$ = 240$ Profit of ONE goods per day with budget of 60$!
The most important thing for us is correct calculation of expenses for advertising. Which maximum cost should we set per one click on your advertisement, in order to get profit at existed conversion?

You are just to start in order to succeed!
Let’s regard the process of advertising agency working in order to make further calculations, which help you to define the importance of each user of your web-site.

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Working within Pay per Click system.Register in PPC system

You register in PPC system (come or call to the editor’s or advertising department), fill in the form, where you determine language, in which your advertisement we be shown; and register that URL No. 1 – which you have received at affiliate registration (Your own affiliate registration – in the form.)

Like advertisement applying to the newspaper, advertisement of your goods is not free of charge in PPC systems. The more you invest the more you get. There are two types of payment within these systems, they are CPC and CPM.
CPC is pay per one click. What does that mean? For example, you have registered in PPC system, filled in all forms and comprised advertising text. You have started your business. Somewhere at this moment on the web-pages with similar topic thousands of people can see your advertisement about selling ‘SOMETHING’ in search system. People click on it, follow URL No. 1, hidden in the text of advertisement, to the seller’s web-site, and buy ‘SOMETHING’. In this case your partner pays you agreed in advance percentage of sale of ‘SOMETHING’. After all, sale has been performed through your affiliate. And you pay to PPC for clicks which were made for advertisement placed within this system. CPC is the payment for one such click.
CPM is the second variant. So, in this case you will pay not for clicks, but for thousand showings of your advertising. CPM is the cost of 1000 showings of your banner. CPM USD 50 means that in order banner or advertisement is shown 1000 times you pay 50 US dollars
Probably, you have a question: “But what if a man who goes to the seller’s web-site following my advertisement will buy there nothing? I will lose my money, pay for nothing. I won’t bring me money, will it?” or “What if after 1000 showings no one click on my banner?” If you have such questions, I’m very glad for you. You will not become a loser in the world of e-commerce. Yes. Of course, e-commerce like any other commerce is risk and luck. But only a weak by nature man is afraid of risk. Strong foresees and uses risk to his good. Be not afraid. Below we will tell you how to minimize your charges for your company, how to increase efficacy of advertisements and avoid empty clicks on them.
We are going to tell you about campaign leading in the next parts.
Let’s have the floor to system makers https://adwords.google.com/ .
Google has developed AdWords program specially for advertisers, which want to turn to the broadest audience and get the most possible effect. As an advertiser, you can choose your own key-words pay just for clicks of clients made on the advertisement. It is extremely simple to create advertisements and manage accounts of e-marketing; and it doesn’t require great initial investments. All this requires only 5 minutes and credit card. We show advertisings in increasing partners’ network by Google, including thousands web-sites from America Online up to Washington Post and we direct them to relevant search system and informational web-pages.
Experienced staff of Google which is engaged in sales and clients’ support optimizes campaign for great advertisers. Staff of experts of AdWords helps advertises to choose corresponding key words and create appropriate advertisement, then track the campaign carefully in order to increase its profitability by means of sifting out the key-words. An advertiser can choose any quantity of key-words. Among recently joined advertisers are Amazon, Cisco Systems и Staples.
Google presents full range of services regarding reports creation to all advertisers, in order to supply precise tuning of campaign and supply real-time data as for which components are most effective. Advertisers can increase profitability by means of directing of their campaigns towards definite territories and languages.
That is the way of Google operating.
As soon as someone types in key-words for search of required information, Google analyses millions of web-pages, which contains key-words for search and it gives up the result:
On the left you can see found web-pages containing information which you were looking for.
On the right there are advertisements by Google AdWords.
Men all round the world place their advertisements for selling their goods, services or they have additional profit by affiliate programs, even not leaving home.
The next step which we are going to make is registration within Google AdWords system.
That is the way of Google operating.
As soon as someone types in key-words for search of required information, Google analyses millions of web-pages, which contains key-words for search and it gives up the result:
On the left you can see found web-pages containing information which you were looking for.
On the right there are advertisements by Google AdWords.
Men all round the world place their advertisements for selling their goods, services or they have additional profit by affiliate programs, even not leaving home.
The next step which we are going to make is registration within Google AdWords system.

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