Archive for the ‘How to succeed on the Internet’ Tag

Plan Your Internet Success – Part 23: Lead Generations, Sales Referral and the Search for Higher Payout


23. Lead Generations, Sales Referral and the Search for Higher Payout

Once you have optimized your Web site and other Web pages you will be able to create “action pages.”

These action pages are critical because they are the most difficult pages to get visitors to go to and probably the pages with the most drop-out. Typical examples of this page include:

a) A page where a banner or text invites visitors to click, and be taken to an online store where they will be able to buy something. In exchange for this you, the affiliate, will get a commission.

b) A product link and shopping cart allowing the affiliate (or advertiser) to sell his or her product. This is done in order to better manage visitors’ requests and offer exactly what they are looking for as opposed to a simple company banner. This can come as a “product feed” and is delivered to your site in many ways and allows you to “keep” your visitors within your site until they click on “check out.”

c) A “registration page” that you host on your Web site (it is pulled from another Web site, in some instances) and where visitors provide information in exchange for getting something such as a newsletter, updates, offers, software, gifts, incentives, etc.

Those are three examples of action pages and we are going to explore in greater detail below each of the options.

Option a) – In this instance, the goal is to complement the content of a Web site with ads (text, banner, etc.) or simple text links that are relevant (in context) with the topic covered and that will generate clicks. The hope here is that some of these clicks will generate sales or actions at an advertiser’s Web site that will convert into a commission or a payment to you upon completion by the visitor of a required action (lead, email submit, etc.). This is probably the easiest way to set up revenue streams for a Web entrepreneur, since banners and text ads are available in great numbers and from many affiliate marketing network or company programs. Lists of networks are available from http://www.affiliate-marketing-solution.com.

However, these types of links are by far the least interesting options, and the reasons for this are simple. As soon as one of your visitors clicks on a banner on one of your pages, you have no idea what happens to this person. He or she may land on an outdated or old page of an advertiser, or worse, get an error from the network indicating that the advertiser has been de-activated.

But even if this person lands on the advertiser or merchant’s Web site, you have no control over how well this store is designed, how fast it will display the merchandise advertised or how well it performs. It may be a very slow Web site that takes forever to load pages, or that has a horribly complicated shopping cart. If so, your visitors will drop out and you will lose any hope of getting a commission.

Additionally, some online merchants have been known to be somewhat reluctant at paying commissions and unless you work with a reputable merchant or affiliate network like CJ or Linkshare, you may be in for a surprise.

Advertisers or merchants may only pay commissions for the first time buyer, so if someone comes back through your Web site and orders something again, you will not get any commission.

Finally, while your visitors may actually go through your site to an online store, make a purchase and the commission is credited, you may end up getting nothing because some smart affiliate has placed an affiliate cookie on your visitor’s computer that override yours when the visitor reach the “Thank You” page. Cookie hijacking is supposed to have been eradicated, but I saw an example of this not so long ago, so beware.


Option b) – In this approach, while the concept is similar to option a), the affiliate features the product that this advertiser or merchant sells on his Web site.

This is accomplished in a number of ways and the easiest include a short code snippet that you put on your page which “pulls” the product that is offered from this merchant onto your Web page.

The advantage over banners and text ads is that you show merchandise and you control how the merchandise is found by a visitor and to a lesser degree how it is displayed. I say “to a lesser degree” because the customization provided by the advertiser may be limited to specific colors and size as well as displays. Regardless, this is a great advantage when compared to banner and text ads, since it shows specific products.

As a result, the risk of losing a visitor is somewhat minimized. Alternatively, problems may still arise when visitors click on products and are taken to the shopping cart of an advertiser that may have a totally different look and feel (to say nothing of domain name).

Option c) – In this instance, you are (to some degree) master of your destiny and can manage how and what your visitors will see throughout their experience on your Web site.

The goal here is to have a registration page where the visitor gives you permission to pass on his or her information to a third party. The benefits are tremendous since you not only will pass on this information but, more importantly, you will retain this information as well for your own usage.

A few notes of warning:

If you pass on your visitor (client) information to a company that will turn around and sell it to anyone ready to pay a few pennies, this e-mail address soon will be burnt and unusable for any future offers that you may want to send. Some companies don’t care for this approach, since they estimate that they can squeeze the maximum amount of money on someone’s information within the first few days of acquiring this information. However, the trend today is in acquiring quality leads (and I personally believe that this is the right approach) in order to monetize a customer over much longer periods of time.

As a result, I would highly recommend that you provide leads knowing how this lead will be used and if it will be re-sold or shared with others and to check to ensure that your trust is not being abused.

By the way, if you do what is called a co-registration, you will need some programming skills or assistance to capture users’ information and pass it on to the company with whom you share this visitor’s registration. Co-registration is the typical form that you see on, for example, an educational Web site or job board and which offers to provide you with information on various online universities. Users fill out the information and click the submit button, but stay on the same Web site.
In the background, code has been created to capture this information and send it to the online university you selected either in real time or via timed batches. This is a lead, and in this example, the job board receives a payment.

Again the beauty of option c) is to allow you to 1) control the environment at all times, 2) capture your visitor’s information and 3) keep your visitor within your Web site.

Finally, be careful of incentives, such as freebies for your visitor if he/she clicks on an offer of fill out a form, since many advertisers do not allow incentivized offers.

In conclusion, while the lead is the best option, as far as I am concerned, all three options should be used depending on how your Web site is laid out and what you are trying to do within each page. As a matter of fact, you should consider these options even if you are an advertiser and only offer products or services on your Web site. However, when and where these are used is critical.

When Web pages are content-oriented and include information about specific products, you should include links to that product within your Web site or, if need be, to another advertiser’s page (always try to keep your visitors on your Web site, though). You may want to include banners for offers that are relevant or complement your own offers. That approach is also fine, but keep in mind that it costs you to bring visitors to your Web site and you do not want to send them away for a few pennies.

No matter what, you should always have a form for your visitors to fill out. This form may be associated with an offer of an online degree or simply to receive your newsletter, email, etc. Regardless of what it is, provide this option on as many pages as you can (and, if possible, on all pages).

To read the complete manuscript and download a free version go to www.planyourinternetsuccess.com

Advertisements

Plan your Internet Success – Part 21: Create Affiliate Accounts


21. Create Affiliate Accounts

At this juncture, you have learned how to spend money on Web design, ISP, advertising, directory listings, etc., so it is time to start learning how you can make money. Affiliate marketing is the easiest way to start understanding how you can create affiliations that will drive traffic from your Web site to an advertiser’s Web site and use someone’s else’s platform to track and account for each impressions, clicks and conversion and take care of paying you.

A short history lesson first: affiliate marketing started with Amazon in the mid ‘90s, when Amazon realized that many people could tell others about Web site purchasing books for cheap at the site. The great idea that Amazon had was to create a simple interface where people could come and grab a banner and code, put it on their Web page, tell others, and get a commission on the sales that were made by the people who were referred by these “affiliates’” Web sites. Barnes & Noble hired a company to do the same shortly after and the race was on.

In the late 90s, I was an executive with Commission Junction (CJ) and we launched the first ASP-based affiliate platform that offered both advertisers and publishers a place where they could exchange banners and get paid for traffic. I believe that one of the reasons for the success of CJ was that we were the first ASP affiliate marketing network, and, as a result, were able to offer much faster integration to merchants at very reasonable prices. The other critical factor to the success of CJ (and I believe it was even more important) was the perception by affiliates that CJ cared about them and that they would get paid for their work. Indeed this was, and to some degree continues to be, one of the most dismal aspects of this industry. Advertisers and merchants will try to avoid paying for leads or sales when they can or try to get away from their obligations by being dishonest with small (and not so small) affiliates.

Unfortunately, while advances in tracking have made things much better today, abuses by some advertisers and so-called brokers or merchants continues to be a real problem. At the same token, abuses by publishers also is flagrant and is estimated to be as high as 20-25 percent of all traffic generated by affiliates and search engines for their clients. I believe that anyone who is running a campaign on the search engines will attest to that fact.

With this in mind, it is critical for an affiliate to work with reputable companies. The good thing is that there are many these days with some of the biggest ones including the following networks:

Linkshare
Commission Junction (CJ)
Google Affiliate Network
Azoogle
Shareasale
Clickbank

There are a great number of affiliate networks, and I try to keep an up-to-date list at one of my Web sites, http://www.affiliate-marketing-solution.com. I invite you to check it out.

For the purpose of this example, I went to Azoogle to look at some of its most recent offers and came up with the following:

Several “Video Professor” offers ranging from $66-$72– Action requires a user to give personal information and provide a credit card.

A $72.00 offer from “Discover Card” – Action requires that a user complete required fields on an application page and successfully create a new credit card profile (in other word submit credit card information).

A “Snoring Solution” offered at $32 – Action requires user to enter valid credit card.

You probably see a pattern in these examples, and it shows that some kind of purchase must be made, or at the very minimum credit card information is to be added. However, Azoogle also offers “leads” deals paying from $1.25 to $10 per lead depending on the complexity of the lead that is required. For example, I selected the following:

An insurance company paying $4.25 per lead when a visitor provides information in five required fields on page one.

I also found a $1.25 or $1.64 for a “makeup survey” as well as a milk survey on page one or page two – submit, respectively.

What does this all mean? It means that all is not as cut and dry as some people would like you to think. It’s not because you have a site with some smart content and that you’ve managed to get some traffic that you will convert this traffic into buyers, leads or clicks, especially if your traffic is what I call transient traffic. In other words, traffic (or eyeballs as it used to be called) is made up of people who are reading something or looking at some pictures on your Web site and then move on. To really take advantage of traffic, you must find a way to have these visitors want to take an action. As a result, the question that you must ask yourself is: “Is my site geared to make visitors take action?” If you answer “Yes” then great. If you answer “No,” then you must ask yourself “What can I do to make visitors to my Web site want to take an action?”

Here is an example of someone who used his thinking cap, along with some basic math, and came up with a simple solution and made some money online.

This was a few years back when I was at CJ, and we were watching an entrepreneur in Asia whom I called “Hong Kong T”. Honk Kong T offered a free T-shirt to anyone coming to his site and registering with basic information including e-mail and physical address.

His traffic and conversions built up to something quite substantial within a very short time, and we decided to keep an eye on him, fearing that it was some kind of scam.

However, people who came to the Hong Kong T Web site and registered received their T-shirt (he may have charged a couple of dollars for shipping), but nothing fraudulent was going on and he kept his account in the black.

What we realized within a short amount of time is that Hong Kong T collected information from the people who came to his site to get a T-shirt (in order to qualify, one had to leave a first and last name, their e-mail and physical address, as well as a telephone number and other basic info). Equipped with this information Hong Kong T would promote advertisers’ offers to these people. The advertisers were from within the CJ pool and “Hong Kong T” would send offers to his T-shirt customers on a regular basis and generated revenues this way. I suspect that he also sent promotions via snail mail as well, since he had their address and provided these people’s telephone numbers to telemarketers. The numbers were not huge at the beginning, but slowly they grew into a sizable chunk of money and a very nice profit for Hong Kong T.

Furthermore, we figured that he must have done the same thing using offers from our competitors using Linkshare, Be-Free (defunct now as it was absorbed by CJ) as well as promoting other advertisers or merchants.

In short Hong Kong T found a way to acquire customers who gave him their information for the price of a T-shirt and a small commission to an affiliate along with the CJ’s fees (all combined these amounted to no more than $3-$4 per submission). In exchange Hong Kong T turned around and sold this information as leads or used them for his own mailings and e-mailing system and generated a minimum of $15-$20 per user, or a cool $12-$16 per customer. Not bad!

However, I also hope that, aside from the anecdote, you do see that this is very much the same principle as the example I gave you in the preceding chapter. If you recall, I was describing how I got users for $3.50-$4 per submission and finding offers to push to these people in order to generate revenues and cover the acquisition cost along with my overhead. Does that mean that giving away T-shirts for free is the solution? Maybe if you have the model to support it. What this example is set to illustrate is that using your imagination, you can find ways to create traction and action on your site and get people to do something and, as a result, general immediate or potential revenues for you.

Interestingly enough, the “game” has not changed much since what we did eight or nine years ago. What has changed, however, is the way we manage this information, the ease with which we can now program Web sites, optimize database, serve images. As a result, we must be smarter and much more sophisticated. A few Web pages with just text or lists won’t do anymore. You need to have something engaging that has the ability to optimize by user, IP, location, time or all the above.

Your can also download the complete “Plan Your Internet Success” manuscript at my personal Web-site http://www.jtouboul.com or at http://www.planyourinternetsuccess.com

Plan Your Internet Success – Part 20: Arbitrage and Commission Based Marketing


20. Arbitrage and Commission Based Marketing

Arbitrage Based Marketing

You may have heard of the term “arbitrage” from the financial market and it applies in the same manner to the Internet. However, a short explanation is in order, in case you are not familiar with this word. “Arbitrage” can be summed up in a very short sentence: “it is the “art” of buying low and selling high.”

You probably can think of many ways to arbitrage. For example click arbitrage is one of the best examples and entails buying clicks for “x” dollar, and re-selling those clicks at “x+y” dollars, hence making a profit for each click sold.

Sounds simple enough, doesn’t it? Pseudo Internet marketing gurus have made a killing (and I mean it) convincing people that this was is easy as one, two, three. In reality, arbitrage is an “art” that very few people have been able to master, let alone become rich at it. This does not mean that you cannot be successful at doing this, but to be successful you must be focused on this game 24/7 and constantly hunt for the best deals and know how to negotiate your way into profitability.

The reasons for this are very simple. Click traffic has become very expensive and, as mentioned in preceding sections, unless you have a great margin, it has become very difficult to make a profit (hence, the advantage of niche markets).

More often than not, companies and people in the arbitrage space are buying traffic on a CPM or CPC basis and re-selling it on a CPA basis, a game that can be as lucrative as it can be risky. Imagine paying Google AdWords, for example, $1 per click and re-selling this traffic at a $10 CPA… One must have a minimum of 10 percent conversion just to pay for Google, let alone for any overheads, employees, etc.

The same is true (with just a little more flexibility as far as pricing) when you buy CPM or CPC from e-mailers, survey sites, list management companies, etc.

So what to do?

The tendency for many Web entrepreneurs is to look for cheap traffic, and if you were to conduct a search for “cheap traffic,” you would probably come across many offers. You’d see something like a $10 offer for 10,000 visitors guaranteed, or digging a little deeper, you may find a sale offer for 1,000,000 email addresses for anywhere from $25 to $300 (probably both prices for the same list too).

These offers are very often what I term “garbage offers.”. For example, e-mail lists that are offered for sale were harvested through “not so legal” means, and sold thousands of times. By the time they come to you, most e-mail addresses are probably dead, since these e-mails were bombarded with so many scam offers. And even assuming that you had your hand on a legitimate list, what could you do? The infrastructure to send 1,000,000 emails is complex and requires servers, specialized software, all of it running in the hundreds, if not thousands of dollars.

The other option that you will see is to buy 10,000 visitors “guaranteed.” At best, this is completely untargeted traffic that comes from dead domains that have been re-directed to you. In the best case scenario, you may buy the worst possible remnant traffic that no one else wants to buy.

This is all grim, and, as I mentioned, the kind of stuff that gurus do not want you to know about when they try to convince you to buy their e-books or services. However, you MUST be prepared and in order to do that, you MUST know what you are dealing with and be realistic about offers that sound too good to be true.

Like so many others, I’ve made all the mistakes that I probably could make trying to find cheap traffic and you should learn from this experience. But most of all, apply this simple logic: if it sounds too good to be true, it probably is! And please, do not make the mistake of thinking that you know better or that Guru John Doe knows the secret of Internet traffic… 99.99 percent of the time this is simply not true.

With this in mind, there are ways to make some money in arbitrage, but it requires work/research, common sense, and focus.

As demonstrated in the example of a $1 click that could be re-sold on a CPA basis for $10 that is not realistic, could this work if you could resell these clicks for a $20 or $30 dollar CPA? Probably, but getting a $20-$30 dollar CPA is not easy. And even assuming that we could find one of those, the conversions would probably be low, since in all likeliness it involves a credit card conversion.

Okay then, would it be plausible to assume that we could buy clicks at $0.45 and resell this traffic on a CPA basis for $15? Sounds more plausible? It is. Just check out the math.

I’m going to use as an example an actual test for a free survey that I am running on various search engines with Google as my reference. After a short test, my average cost for clicks is averaging $0.50 per click (CPC). So far, this has been a typical Google campaign with a conversion of around 10.3 percent on the average (the best conversions I have so far are 20 percent, while the worst stand at .05 percent – I even have one that run at a dismal 0.0% on one of the top 50 ad networks… so much for that!)

So far, the cost for this test is $193.40 for 386 clicks and 304 conversions according to Google. In reality, these 386 clicks resulted in only 41 actions, which consisted of a submission of information containing at minimum the following:

Name (first and last)
Age
E-mail address
State of Residence (US and Canada only)
Level of Education
Type of Housing
Type of Vehicle
Place of Employment

In other words, the information described here has cost me $4.11 for each person who submitted it. This is obviously much higher than the $0.45 premise that I set up.

So far, this is quite straightforward and simple math and someone reading this could say “So what?” and walk away… But wait… Did you ask the real question and are you putting your creative hat on? This is when work and research will pay off and when common sense and straight thinking comes into play in order to figure out how to monetize these actions.

In this “live” example, to cover my cost of $4.11, as well as make some money to pay for my overhead and (I hope) make a profit, I need to make substantially more than the $4.11. By the way, my test went on to cover other networks and channels of marketing with various results and costs that went down to $3.50 per submission and probably could go down substantially lower, but I will keep $4.11 for this example.

Furthermore, I will have to account for a portion of this information not being valid (I assume 10 percent) and, more importantly, come to terms with the fact that, no matter what, a number of these people will never generate money or will opt out (I typically assume half). In other words, my cost is suddenly rising from a steep $4.11 per submission to an atrocious $9 per submission.

Based on this, to break even and make a profit, I will have to make at least $20 from each submission.

How can I do that? Well, let’s take it one step at the time and look at one of the most obvious options: affiliate networks and what is known as “commission-based marketing.”

Commission Based Marketing

Commission-based marketing is not comparable to arbitraging since it involves a payout (typically on a CPA basis) that an advertiser makes to what is called an affiliate. For example, if an advertiser is selling shoes at $50 and an affiliate sends a buyer who will spend this money the affiliate would then get a percentage of the sale. Simple as that…

In theory for an advertiser, affiliate marketing is one of the best way to market product since the advertiser pays only when an action (sale, lead, etc) is taken by a consumer. Hence the CPA (cost per action) model is by far the most cost efficient way to sell products and services, and acquire customers. However affiliate marketing is often poorly understood by advertisers and poorly represented by CPA networks. As a result, many companies that have affiliate marketing programs are bitterly disappointed by the results. The reason for this is that affiliate marketing is based on establishing relationships with affiliates, and that in order to do this successfully, companies must dedicate the “men–power” to succeed but often don’t.

Simply joining a CPA network, no matter how reputable it may be, does not insure the success of an affiliate marketing program unless this CPA network offers to actively recruit affiliates on behalf of the advertiser. And when this is offered it is often done at a price.
Notwithstanding the above, affiliate marketing is by far one of the most cost effective ways to acquire customers., However an advertiser must invest in its program by investing in its affiliates and the people who manage the program.
From a publisher/affiliate perspective, the beauty of affiliate-based marketing is that an affiliate does not have merchandise, inventory, shopping carts, or pretty much anything. The affiliate makes his money from the percentage (or fee) that is paid to him in the form of commission or finder’s fee.

In some instances, the pay is based on other form of actions, such as a lead, the submission of an email address or, in some cases, as little as the submission of a zip code (known as “zip submits”). Of course, each one has a different price tag, but curiously enough if you look around you will find zip submits that pay as much as $0.75, which may sound a bit crazy, but if you can monetize what comes with it, why not (remember it’s a numbers’ game.)?

Now, imagine for a moment that you were able to locate great offers that pay $20 per lead. I can tell that you’re already smiling because you know that profit is at hand.

And on this note, let’s move on to our next section and become an affiliate and try to locate these “juicy” offers that may yield the kind of results that we must have to be successful.

Just as a reminder that the complete manuscript is also available at www.planyourinternetsuccess.com

Plan Your Internet Success – Part 19: Put It Together


19. Put It Together

By now (and if you followed the steps that I explained in parts one through four), one of two things may be happening for you:

1) You understand the overall concept and are ready to dive in and explore the infinite possibilities that marketing on the Internet offer.

or

2) You are somewhat overwhelmed or intimidated by the information and the options that are available and are unsure about how to proceed.

If you fall in category 1) read on as we now enter a new level of marketing on the Internet, and explore how to turn an idea into a really successful business by utilizing all the levers available to you.

If, on the other hand, you fall into category 2) do not despair, the Internet can be overwhelming to most anyone, including people who, like myself, have done it for years. I suggest that you re-read the high points in the previous pages and limit yourself to a couple of resources to simplify managing the information that you need to absorb.

The objective of this first volume on Internet success is to give a Net entrepreneur enough information to get started and put you in a place that will ensure that you avoid obvious mistakes and, hope, prepare you to succeed.

If you are afraid of screwing up something, don’t worry… you will, as I have done and most Internet entrepreneurs do, no matter how good or experienced they they are.

There are too many channels, too many verticals, too many variables and too many options for anyone to be able to keep on top of it all. The objective with this manuscript is to provide you with enough information and know-how to minimize the damages when you will screw up (and you will).

However, for those of you who fall into category 1 (and 2 for that matter), by now you should have:

1) A good domain name and a Web site that has good content and that is optimized.

2) These elements should reside on a server at one of the ISPs that provides reliable service at a decent price.

3) You should have created a press release and articles and all of them should be posted at various specialized Web sites and broadcasted via your accounts on social networks, where you have connected with friends and relatives (and anyone else for that matter).

4) You should be familiar with Google AdWords and have experimented with some keyword bids. You should understand bids for search vs. content and managed content vs. automated content. Your curiosity has probably made you explore the concept of broad, exact and phrase matches for keywords. If you’ve gone ahead and bid quite a bit, you may have seen the option to do some CPA. Be very careful…

When you have done all the above, you should be ready for the next chapter, and equipped to continue your voyage in the depth of success.

Our first venture in being truly successful will start with affiliate marketing and how to explore and make the most of it.

To read the complete manuscript go to my website www.planyourinternetsuccess.com and follow the links to downloading “Plan Your Internet Success”

Plan Your Internet Success – Part 14: CPC Web Advertising and Adwords


CPC Web Advertising and AdWords

I was planning to make a short stop here and combine advertising and banner exchange, but these are two very different topics that need to be treated in very different ways. Furthermore, I believe that the topic of Web advertising on the Net is very often brushed aside as too expensive or at the other end of the spectrum, “over-sold” by gurus as an easy way to make money doing what is called “arbitrage.”

As a result, instead of doing a short overview, I’ve decided to spend some time reviewing advertising on the Net. The focus is on Search Engine Marketing (SEM) and Cost Per Click (CPC) advertising typical of search engines as is AdWords.  As a matter of fact, I will use AdWords in particular, as well as keyword advertisement (I will address keyword advertisement on Facebook and the other social network in another issue) to review this topic, since it is a popular way to advertise today. This fact is a result of various changes on the Internet including:

– Searches are a fact of life and most (if not all) people search for something using one or several search engines

– Sponsored listings that are presented to users at the result of a search are common practice and quite successful.

– Advertising on the Net, and on search engines in particular, has become a necessity for Web site entrepreneurs, if they want to offer their products or services to potential buyers at the most opportune moment.

– Keyword-based advertising can be a blessing in disguise if you know how to use it and how to manage your spending and advertising methods.

– Google AdWords and the tools that are offered via this application are great for collecting tons of intelligence and using it to better understand your potential customer and what it will take to get their attention.

– Google AdWords and most SEM solutions suck for affiliates who work with networks such as Clickbank, CJ, Linkshare, etc., and make a commission based on sales — unless you know how to cherry pick offers and manage traffic generated by clicks.

– PPC advertising can work if you have the right formula of service or product and play the game smartly.

First, let’s set the scene for search today: You may not like it but Google, Yahoo! and MSN provide most of the searches on the Internet, with Google being the dominant figure (nothing new here).

Here are the official numbers per Nielsen for searches in 2009.

Google: 64.0%
Yahoo!: 16.3%
MSN: 9.9%

If my math is correct, this represents more than over 90 percent of all searches on the Net.

If you are an information junkie and want to know how the other 10 percent is split, here it is.

AOL: 3.7%
Ask: 2.1%
My Web Search: 0.7%
Comcast Search: 0.5%
Yellow Pages: 0.4%
Next Tag: 0.3%
Dogpile: 0.2%

This demonstrates one thing to me (and, I hope, to you as well), Google is the dominant search engine.

This also implies that Google is most representative of most every users and searches, and, as a result, is very accurate as far as what users search for and how they search. As a result, Google can provide you with the best intelligence on your potential customers’ search habits.

Of course, you can now open an AdWords account and start spending your hard earned money on very expensive keywords and key terms and probably not generate enough revenues to pay for it, let alone make a profit.

So, how does one use Google to gather information without spending a fortune?

Based on most online marketing doctrines, a pay per click (PPC – also called Cost per Click – CPC) advertising campaign has two very distinctive goals that include:

1) To ensure that an ad (text typically, but also banner ads in the network) is positioned on the search engines to attract potential customers and trigger an action and/or increase sales

2) Expose a company brand on the Internet and/or use name recognition to appeal to shoppers who have the tendency to trust and shop at name-brand online stores (a network like Google Content Partners or Networks like Commission Junction, Linkshare, etc. are a good examples of those).

For the sake of keeping this plan simple at this level, we will look at what is probably the most impressive ad network of them all: Google AdWords.

The first rule of understanding AdWords is that no matter what you think, you must realize that Google Ad Network (the bid system where people bid for keywords on a CPC or CPA basis or partner contents) is designed to make as much money as possible for one entity: Google.  By playing you against your competitors, AdWords’ bottom line is its own profit margin based on clients’ size, reputation, history, spending, etc. Hence, the basic principal of AdWords, where people believe that the more you pay, the better your position, is not always correct.

And while the AdWords worked relatively well for most everyone at some point in time, it no longer works when keyword bids are as much as $9, $15 or even a whopping $30 per click. FYI, just a few years ago, the average keyword on Google was $0.54.

This reality should tell any marketer to re-evaluate the way he/she uses Google AdWords (and the other SEM solutions for that matter). My advice is, first and foremost, advertising on the Net using SEM should be used to:

1) Initially gather information on what/how information is being searched and the cost of keywords, hence a campaign.

2) To give you the opportunity to analyze this information to find the best way to “monetize” your services or products based on what others in your vertical are spending.

As far as branding, I am of the opinion that when it comes to PPC, branding is nothing more than a “residual” effect, and brand recognition will be minimally enhance if at all. However, you may have an advantage if you already have an established name. If your plan is to brand, then look into networks like CJ or other CPA networks or something like AdWords content sites and make sure that you have banners and creatives that give your product and company justice.

So the question is “How to Use AdWords?” to get maximum bang for your buck?”

At this juncture, your goal should be to use AdWords to gather information with minimal expenditures.

The first thing you need to do is to create a campaign for each product and/or service (and business if you are launching multiple) that you have and then create buckets of key terms using keyword software.

I personally recommend using a combination of two or three solutions to search for the best keywords and they include:

First: Wordtracker (http://freekeywords.wordtracker.com/) to find the keywords that works for you

Second: AdWords keyword tool

(https://adwords.google.com/select/KeywordToolExternal)

Third: Use a software or solution that provides you with a KEI ranking for keywords. KEI stands for “Keyword Efficiency Index” and uses a simple formula that attributes a value to a keyword, based on its popularity and competing Web sites that feature this keyword.

As a result, very popular keywords often will have a low KEI rating since the competition for these keywords is fierce, hence not so good, since bidding on these keywords is probably very high. The goal in looking at KEI is to identify keywords and key terms that are searched, but for which the competition is not so fierce and, as a result bid price is low.

I personally use IBP, an all-in-one software that allows me to test HTML, find keywords, calculate KEI, submit sites, evaluate a Web site’s ranking, and much more. If you are interested, check it out at http://www.ibusinesspromoter.com/

To illustrate the three steps that I explain above, I created screen shots that show the steps that I would follow using first Wordtracker, then AdWords keyword tool and finally IBP.

Looking for keywords related to a theme such as “marketing” and marketing as it relates to the Internet in particular, I first use Wordtracker to find keyword in these themes as shown on screen shot 1:

Key Terms and keyword search

The result that I get already is giving me a lot of potentially good keywords and key terms. However, since “marketing” is a high level keyword (after all what kind of marketing are we talking about), the keywords that are listed in the result become what I call a “bucket.”  The idea of a bucket is to group together keywords that address specific area of the business you are targeting.

In my example, these buckets would be “Internet Marketing,” “Search Engine Marketing,” “Network Marketing,” “Web site marketing,” etc.

Now, by clicking on these keywords, I am able to drill down and find keywords that are specifically related to each bucket.

For example, clicking on “Internet Marketing” would result in the following:

keywords and key terms search to optimize Google Adwords

This result is my first bucket of keywords that I titled “Internet Marketing” based on the keyword that I selected to explore one level up (as shown on screen shot 1).

The same approach is taken with the other high level keywords that were obtained at the first level of search (screen shot 1: “Search Engine Marketing,” “Network Marketing,” “Web site marketing,” etc.)

However, what I suggest is to organize keywords in some kind of buckets system.  Buckets are, for all intents and purposes, a way to better define your vertical by specialized keywords and key terms.

The top level one is “Marketing,” but it is a very big topic so I need to better define what I call specialized-verticals like “Internet Marketing,” “Search Engine Marketing,” etc. All of them derive from my main vertical, but allow me to be more specific in the type of marketing I am going to target.

The importance of these buckets is that eventually they will become your ad group on AdWords, and that alone will allow you to be much more efficient in the way you use AdWords.

Using my example, when I’m finished with this exercise I will have a top level vertical called “Advertising” that will translate into my campaign on AdWords and buckets like “Internet Marketing” that will become my ad group on AdWords.   As a result, my AdWords account will look something like this:

Campaign: My Advertising Campaign

Ad Group 1: Internet Marketing

Keyword 1: internet marketing

Keyword 2: internet marketing marketing
Keyword 3: internet marketing services
Etc.

Group 2: Search Engine Marketing

Keyword 1:
Keyword 2:

Keyword 3:
Etc.

Now, you may think that you are ready to roll, but before you spend a dime, there are two things that you must do (as explained in the preceding pages). You must check the AdWords Keywords tool and evaluate the KEI of each keyword.

The AdWords keyword tool is quite simple and allows you to find keywords in the same vertical that you entered as shown in the screen shot below.

Google Adwords Keywords Suggestion Tool

As you can see AdWords gives you a number of options for keywords that you may or may not have already found on WordTracker, and there is nothing wrong in adding new ones to your list of keywords.

However, stay in the spirit of your bucket, and don’t add keywords that are not directly related to that bucket. Since, in this example, I am set to find “Internet marketing” related keywords only, I would stay away from keywords that are not directly related such as “market research” (listed in that same result under “Additional Keywords to Consider”). In this case, assuming that “market research” is a keyword that I could use, I would put it in a different bucket or create a new bucket.

A good example of that are the key terms “search engine optimization” and “SEO.”  These two terms stand for the exact same thing, but if you pay attention, you will note that people search using the term SEO (or SEO associated with another word) as well as search engine optimization. And even though SEO stands for search engine optimization, there are enough searches under these two terms to make space for a bucket dedicated to each one.  As a result, in this instance, I would create an ad group called “SEO”, along with one called “search engine optimization”.

Finally, while you must pay attention to the bar that indicates the competitiveness of these keywords; do not be alarmed since our next and last step will be to review the popularity and KEI of these keywords, something that will define how we bid.

Tip: The blue bar that you see on AdWords can be a very useful item that can help you find out how much the price of the top bid is for any given keyword at a given moment.  This is something that is explained later on in this document, so keep on reading.

As mentioned previously, the KEI is something that can be obtained using various online solutions or software.  For the sake of this example, I will show you how it works using the IBP software (next page).

Google Adwords and Keyword Optimization

IBP, or similar software, can provide you with the ability to confirm from an independent source (other than Google) the number of searches for a keyword as well as the number of competing offers relatives to this keyword and, finally, a KEI value. The KEI is nothing more than a simple formula that reads as follows:

Adwords and Keywords Optimization Using KEI

With SV = Search Volume and C = Competition

Using this formula, you can calculate the KEI of each keyword yourself as per the example below (using Wordtracker and Google Search – simply enter the keyword on the search box and look at the number of result you get):

keywords Optimization and KEI

Keywords Optimization and KEI

A more advanced formula is also used for calculating the KEI, and that formula uses the relevance of a keyword.  The formula reads as follows

Advance KEI Formula

With SV and C based on the same values and with R = relevance

Relevance is something that is defined by the user and typically has three to four variants, as follows:

1 = Excellent Relevancy

2 = Good Relevancy

3 = Limited Relevancy

4 = Poor Relevancy*

* Note that in this case the KEI = 0 – some formula have only three relevancy values, but I find “poor” to be almost irrelevant keywords

As a result, your own calculation using the same example of keyword (Internet marketing) will look like the following:

KI and keyword optimization

Note that the KEI and KEIr are identical in this case, because the keyword selected (“Internet marketing”) is very relevant.  However, the KEIr will start moving down as relevancy changes as shown in the example below since in this example “Dallas Internet marketing” has limited relevancy and, as a result its value is only 3:

KEI

KEI Results for Keywords

Note, however, that I decided in this example to give a relevancy value of three to “Dallas Internet marketing.” Of course this would not be true if I were targeting the Dallas market.  Should this be the case, my relevancy value for Dallas would be 1 or 2 depending on the importance of this key term in my campaign.

This leads me to point out to the importance of keyword relevancy and the fact that keywords’ relevance is a judgment call based on your campaign’s goals.

Go get it

You are now ready to start with AdWords, and the first thing you will need to do is to create a campaign budget and set the type of campaign you want to run (search or content) and other targeting factors. Here are some recommendations:

– Set a low daily budget with limited time for the campaign to run (you can always extend it) and time during the day when you want it to run.  Again, remember that the goal of this initial campaign is to gather intelligence on keyword popularity and pricing, competition, etc.  This should be viewed as an R&D project.

– Create your first ad group and set a cost per click at $0.35 for search content. Again, nothing to worry about you can always change it.

– Create one or more ads for each group (I suggest two to three per group) using your main keyword in the header (for example “Internet marketing expert” for the ads corresponding to the Internet marketing group). Look at other Web advertisers who offer the same service as you by searching Google. No matter what, do not copy what is done. Create your own ad, something that reflects who you are.

– Some people may recommend that you create ad groups that target search, network content and managed content. I personally like to segregate between search and managed content and create two sets of campaigns. However, this is applicable when I am actively generating clicks and leads.  For the sake of this “exercise,” I suggest that you focus on search and opt for “network content” with a very low PPC for the latter: set it at $0.15, or less, just to get is going and see what you get. As far as managed content, feel free to start if you think you can manage it all.

An example: for an online campaign that I run on AdWords I have for one campaign, 22 ad groups, 63 ads and 480 keywords. It’s a lot of work, but it is worth it if you want to make money on search engine marketing and Google AdWords in particular.

Once you have launched your campaign, you will very quickly see something happening, and that is the infamous “below first page bid” on some of your keywords. Nothing to worry about since the goal here is to find out how much it costs to be on the first page (but not in order to be there).

Tip: Don’t be intimidated by high keyword prices to be on page one. For example, some keywords in the Internet marketing space go for as much as $20 per click for something like “email marketing software” (I guess email marketing software companies have a very high margin or a high lifetime value for their customers).  Regardless, the top position on AdWords is not something you want to target, so no worries.

Tip: To better manage your campaign(s), I suggest that you download a Google campaign management tool called “AdWords Editor.” It comes with great features and allows you to manipulate things much faster than if you were online. (http://www.google.com/intl/en/adwordseditor/index.html)

Now, the game begins. Using your KEI software or own calculation look at your keywords with the highest KEI. Those are the keywords that may not generate great traffic, but that are the most cost effective in getting visitors. I usually increase my bids for those to be in a decent position. Not necessarily page one, but close enough, and as long as it is within my daily budget.

During an actual campaign, one of the most critical aspects of AdWords is its “network placement” and “managed placement.” I continually adjust my “managed placement” and often pay as much as my PPC average for search, but set my network placement maximum to a very low number. I also slash out Web sites from my managed placement that are generating clicks, but not producing conversion.

As you do the above, you will notice within a relatively short period of time that some buckets/groups show significant impressions and some don’t. This may be the result of a bid that is too low or the keywords simply do not create much traffic and this is part of the game.

If would increase your PPC for search, remember to change in small increments.

In the same manner, if you change your PPC for a specific keyword, do not be tempted to double or triple how much you are willing to pay. Do it in increments and do it often.

Within a couple of weeks of this (I usually do this for three weeks and spend one to two hours per day reviewing and adjusting), you will see an emerging “picture” of what is going on in your space including “hot” keywords based on searches, ads that perform well, keywords and messages that combine to convert well, etc. Your spending for these two or three weeks may be $200-$300, but the intelligence that you will gather is worth 10 to 20 times that amount.

Why? Because you now have a great “picture” of what works for your campaign as far as keywords and ads. Equipped with this information you will be able to create campaigns on Yahoo!, MSN, Miva, AOL, Ask and all the other search engines, while minimizing your time tweaking your campaigns. Sure, there may be some different results for the same keyword on Google and AOL, but is it worth spending an entire day figuring this out? I’ve always believed and continue to believe that when it’s all said and done, Internet marketing is a numbers game and that once you find what works on Google, it probably will work 90 percent of the time on Yahoo! or MSN. This approach will allow you to minimize the time spent managing campaigns, while expanding very rapidly.

With this information, you also will be able to better target directories if you want to advertise on them. You will be able to better target your email campaign thanks to a better understanding of what works in your message and the key terms to which people are more receptive. And this applies to both the subject line and your email message.

While all this is time consuming, it is by far one of the most critical parts of your plan to succeed, so stay focused and do it right.

Coming up on Friday is the complement to this post with more details on Adwords

You can review the complete manuscript, “Plan Your Internet Success” on my web site at www.jtouboul.com